1. What is NY-Sun?
NY-Sun is part of the Governor Andrew M Cuomo’s commitment to protect the environment and lower energy costs for all New Yorkers by improving the efficiency and reliability of the electric grid. Governor Cuomo launched NY-Sun in 2012 to increase solar electric installations in the state. Following two successful years, in April 2014 the Governor made an historic commitment of nearly $1 billion to NY-Sun, which will significantly expand deployment of solar capacity throughout the state and transform New York’s solar industry to a sustainable, subsidy-free sector.
2. Where is the $1 billion for NY-Sun coming from?
The primary funding source is New York’s Renewable Portfolio Standard, which calls for an increase in the use of renewable energy in the state. For customers served by PSEG Long Island, the System Operator for the Long Island Power Authority (LIPA), and New York Power Authority (NYPA), funding will come from the Regional Greenhouse Gas Initiative.
3. How much solar capacity does New York State have because of NY-Sun and how much more will it have in 2023?
In the first two years of NY-Sun, a total of 316 megawatts (MW) of solar electric has been installed or is under contract, more than was installed in the entire prior decade. Approximately 116,000 tons of greenhouse gas emissions will be avoided with the installation of the NY-Sun projects, which is the equivalent of removing 23,000 cars from the road. The expansion of NY-Sun announced in April 2014 is expected to result in 3 gigawatts of installed capacity by 2023, a scale-up that is projected to make the solar industry self-sufficient in New York State, no longer requiring government subsidies as the cost of solar becomes comparable to the cost of electricity from the grid.
4. How is New York State going to accomplish the NY-Sun goals?
The state has redesigned its solar programs using a Megawatt (MW) block system that provides certainty and transparency regarding incentive levels to the industry, accounts for regional market differences, provides a clear signal to industry that New York intends to eliminate cash incentives in a reasonable timeframe and allows for the elimination of those incentives sooner in regions where market conditions can support it. The state also continues to invest in ways to decrease the cost of PV systems by reducing “balance-of-system costs,” which includes streamlining the inspection and permitting process and reducing upfront costs of installation and PV components other than the solar module.
5. How does the MW Block system work?
NYSERDA will transition to the statewide NY-Sun Incentive Program, using a MW Block system, starting in August 2014 for PV systems up to 200kW in capacity; and in early 2015 for systems larger than 200Kw in capacity. The MW Block system allocates MW targets to three regions – Long Island, Con Edison territory (New York City and south Westchester) and Upstate (the rest of New York State), with each regional block being divided into three sectors, specifically:
- Residential systems up to 25 kilowatts (kW)
- Non-residential systems up to 200 kW
- Non-residential systems larger than 200 kW (available in 2015)
Each region and sector is assigned a series of MW targets at certain incentive levels, referred to as “blocks.” As applications are submitted, incentives are assigned and the kW associated with the applications are added together. When the MW target for that block is reached, the block is closed and a new block, with a new MW target and a lower incentive level, is started. Once all of the blocks for a particular region and sector are filled, an incentive for that region and sector will no longer be offered.
Here’s an example of how the MW Block structure works: If the first Upstate Residential block was for 40 MW and the incentive was $1/Watt, once contracts are in place for those 40 MW, the second Upstate Residential block will be made available at a slightly lower incentive rate – 90 cents/Watt. This decrease in incentives will continue with each new block.
6. What are the MW block goals in the different regions?
The regions and sectors have the following targets:
- Con Edison Territory: 302 MW for residential projects and 303 MW for small non-residential projects.
- Upstate: 444 MW for residential projects and 451 MW for small non-residential projects.
- Long Island: 119 MW for residential projects and 60 MW for small non-residential projects
MW goals for large non-residential projects will be determined for Con Edison and Upstate regions when these block are launched in 2015. Note that the NY-Sun Incentive Program does not include a block for systems larger than 200kW for customers served by PSEG Long Island.
7. Why are the MW block goals different for different parts of the state?
The goals are based on the maturity of the markets in each region.
8. Will there still be a separate Solar Electric Incentive program for smaller PV projects and a Competitive PV program for larger projects going forward?
No, these NYSERDA programs are being transitioned into the MW block system. Residential solar projects of up to 25 kilowatts (kW) and non-residential solar projects of up to 200 kW (formerly administered by the Solar Electric Incentive program) are now receiving support through the NY-Sun Incentive Program, which uses the MW block system. Projects larger than 200 kW (formerly administered through the Competitive PV program) will receive support from the NY-Sun Incentive Program starting in 2015.
9. What happens to projects that are still in the Solar Electric Incentive or Competitive PV queue when the NY-Sun Incentive Program begins?
Applications for residential and small non-residential systems submitted after January 1, 2014 but prior to the launch of the NY-Sun Incentive Program will be counted toward Block 1 for the appropriate region and sector. Block 1 in each region and sector are sized to accommodate those applications. Projects that were awarded contracts through the Competitive PV Program will continue to be served and receive their incentives through that program. In the future, projects for systems larger than 200 kW will be able to apply for incentives through the NY-Sun Incentive Program starting in early 2015.
10. How can I participate in the NY-Sun Incentive Program?
Learn about how to participate.
11. Is financing available to help pay for solar projects?
NYSERDA will facilitate access to financing as cash incentives are reduced and – ultimately – eliminated. Residential and small non-residential customers may be able to qualify for financing for PV through Green Jobs - Green New York, and installers can help their PV customers apply. Installers are also encouraged to explore options for financing through the New York Green Bank.
12. What is a Power Purchase Agreement (PPA)?
With a Power Purchase Agreement (PPA), an installer/contractor owns and pays for installation of a PV system at a home, business, not-for-profit facility, school or municipal building and enters into a contract with that utility customer to sell the electricity generated by the system to the homeowner or business at a price that is lower than the utility price for electricity. Contracts are for a specified period – usually 20 years. The third-party owner is eligible for certain tax credits and depreciation allowances and can use the NYSERDA PV incentive to lower the cost of the contract.
13. What are the benefits/drawbacks of a Power Purchase Agreement vs. purchasing a PV system outright?
An advantage of a Power Purchase Agreement (PPA) for homeowners or businesses is that they do not need to invest capital up front for the PV system, and they still benefit from lower electricity costs as well as from knowing that they have reduced their carbon footprint and supported the growth of the clean energy industry. Maintenance of the system is the responsibility of the third-party owner, and contracts may include a production guarantee. However, PPAs usually involve long-term contracts, typically 20 years, and may or may not include special terms regarding the sale of the home. The price that the homeowner or business pays for the power produced by the PV system is set by the third-party owner and may increase over time as stated in the contract. While the NYSERDA incentive is required to be passed through to the customer through lower contract pricing, the homeowner or business cannot take the full tax credits, as the system owner receives tax benefits.
An advantage to purchasing the PV system outright is that the homeowner or business may be able to take full advantage of the tax credits, depending on their tax situation, and the NYSERDA incentive would be deducted from the total to help defer some of the cost of the system. After the system is paid off, they will continue to benefit from the electricity it produces. In addition, the homeowner or business has full control over the disposition of the PV system if the building is sold. However, the system owner is also then responsible for the cost of any maintenance that might be needed, if it is not covered under warranty.
A homeowner or business owner should consider the costs and benefits over the life of the system or contract, including their own finances and tax liability; review the terms of sales or PPAs closely, and choose the method (PPA or direct purchase) that is right for them. Before signing any contract, individuals and businesses may want to consult with a tax professional.
14. What is meant by balance-of-system costs?
Balance-of-system costs refer to costs of all aspects of installing the PV system with the exception of the PV modules themselves. This includes time and administrative costs associated with selling and signing a contract, system design and permitting, installation labor and component costs, inspections, travel to and from the installation site and other costs of doing business. NYSERDA, NYPA, LIPA and PSEG Long Island are working with the PV industry, utilities, municipal leaders, training organizations, community-based organizations, financing organizations, and others to help permanently lower these costs. For example, the Community Solar and K-Solar programs introduced by Governor Cuomo in January 2014 are expected to make PV systems more accessible and affordable through community networks, aggregated purchasing, shared ownership/investment and other strategies. K-Solar applies these models to schools.
In addition, NYSERDA has been working with the City University of New York and others to streamline and standardize municipal permits for PV installations, which can then be adopted by municipalities for their own use. NYSERDA also supports research and development projects that will reduce the cost of installing PV, as well as projects to reduce costs to finance PV, increase the competitiveness of the PV marketplace, and allow consumers to make more informed PV purchasing decisions.
15. How much funding is there for balance-of-system (BOS) projects and what is the time frame for completion?
Between NYSERDA and New York Power Authority more than $50 million has been allocated for balance-of-system activities through 2016. In addition, the federal government has been investing in BOS cost reduction through its Solar Rooftops initiative for more than seven years.
16. How is NYPA involved in NY-Sun?
NYPA and NYSERDA are working together to advance technology and reduce the balance-of-system PV costs (BOS) in New York, including installation and all non-module solar costs. This is part of NYPA’s Solar Market Acceleration Program (Solar MAP). NY-Sun and Solar MAP provide funding for the NYPA-NYSERDA collaborative (NY-Sun BOS) and for additional solar research and demonstration projects aimed at reducing solar costs and for improving solar integration with the electricity grid. In addition, NYPA is administering the NY-Sun K-Solar program, which is part of the NYSERDA-administered Community Solar program. Community Solar makes solar more accessible and affordable through community networks, aggregated purchasing, shared ownership/investment and other strategies. K-Solar applies these models to schools.
17. Can New York Power Authority (NYPA) customers participate in the NY-Sun Incentive Program?
Yes, incentives are available for NYPA customers, which are mostly government buildings, municipalities and schools across the state. Since the NY-Sun Incentive Program is primarily funded by Renewable Portfolio Standard funds, and NYPA customers do not pay into the RPS, funds from New York State’s share of Regional Greenhouse Gas Initiative (RGGI) proceeds will be used to fund incentives for PV systems installed for NYPA customers. In addition to the NY-Sun incentives, NYPA also offers low-cost financing for solar projects at customer facilities and other public facilities statewide.
18. How is LIPA/PSEG Long Island involved in NY-Sun?
NYSERDA is the statewide administrator of the NY-Sun Incentive Program, and PSEG Long Island is the local administrator on Long Island. PSEG Long Island was involved in the MW block system design process, it reviews and approves applications received by NYSERDA for LIPA customers and it works with installers on Long Island to approve projects, verify installations and inform NYSERDA when the projects are ready for payment. NYSERDA will perform these tasks for the other two regions of the state.
19. How much funding is available by region for the NY-Sun Incentive program?
Breakdown of funding available for the MW Block program:
- Upstate residential and small non-residential incentives: $425.5 million
- Con Edison residential and small non-residential incentives: $197 million
- Long Island residential and small non-residential incentives: $60 million
- NYPA projects: $20 million
20. How many solar companies are in New York State?
There are more than 400 solar companies in New York State. See PV Installer list.
21. Is Solar Hot Water included under NY-Sun?
No. NY-Sun includes solar electric, but it does not included Solar Thermal. NYSERDA does, however, have a program that provides financial support for Solar Hot Water projects.