By Michael Francis
General Manager of BlueRock Solar
Two bills were recently introduced in the State assembly and senate that seek to amend the public service law to restore net energy metering for Community Distributed Generation, most commonly utilized for community solar. On March 9th, 2017 New York State enacted laws to transition away from net energy metering to a new value mechanism, the VDER (Value of Distributed Energy Resources). The new law required New York State utility companies to publish tariff rates for the calculation of the VDER under Phase One of the program. The published rates by the utility companies are not at levels that fairly compensate the value of generation. As a result, community solar projects are increasingly difficult to finance under the first phase of the VDER, especially so in the Upstate New York region.
With Governor Cuomo’s proposed plan to make New York State 50 percent reliant on renewable energy sources by 2030, a fairer and less complicated compensation mechanism is needed to move the ball closer to the goal line. Community solar offers many customers that have been previously unable to participate, the opportunity to take advantage of renewable energy. New York State started to see some community solar development under previous rules for net metering as investors and developers of community solar projects felt more confident in moving projects forward. The previous momentum seen in community solar has come to a halt in many areas as a result of the published values and complexity for the VDER’s Phase One compensation mechanism.
The Phase One compensation mechanism was meant to be a short-term valuation method while the Public Service Commission began a study to calculate a more granular valuation under Phase Two. The Public Service Commission has already begun those deliberations for Phase Two. The VDER Order called for an end to Phase One at the end of 2018. We already know those amounts do not support a fair compensation level which has stunted the growth of community solar.
Since the lifespan of VDER Phase One was meant to be short-lived and has impacted solar development dramatically, passing the VDER Moratorium Bill gets New York State back on track to reaching its renewable energy goals. We know that net energy metering works and projects can continue to be developed, built and interconnected. In the meantime, the Public Service Commission can learn from the mistakes of Phase One and work towards a fairer and less complicated valuation mechanism under Phase Two.
In the meantime, if you’re in favor of restoring the net metering rates for renewable energy so that they are more equitable for you, the consumer, v. the utility company, contact your congressman or senator to make your opinion known.