The New York State legislature recently introduced Bill S7093 (the “Bill”), its response to the growing appetite for solar energy in America. The Bill contains draft legislation to effectively grow solar photovoltaic capacity to at least 5,000 megawatts (MW) by 2025, with interim targets of at least 500 MW by 2015 and 1,500 MW by 2020. This is an ambitious target when viewed in comparison to existing capacity of approximately 34 MW at the end of 2009. In addition, New York is positioning itself as a major player in the solar industry with higher solar PV targets (by capacity) than its neighboring states, with the exception of solar heavyweight New Jersey. Aside from the obvious environmental benefits, the draft legislation, if enacted, is estimated to create 22,200 new jobs as well as boost GDP by $20 billion.
In terms of specifics, at least twenty percent of each energy supplier’s annual SREC obligation shall be met through the purchase of SRECs from retail distributors of solar energy generation (i.e. less than 50 kW systems), and at least an additional thirty percent of the obligation shall be met through retail distributed energy generation of any size. As a result, this promotes a more distributed use of solar energy due to the combined 50% SREC purchase requirement from retail distributors. Furthermore, the Bill requires energy suppliers to purchase at least 75% of their SREC compliance obligation from systems owned by an independent third party. This effectively provides for a robust secondary SREC market.
While this may seem like a win for solar enthusiasts, certain ambiguities contained in the Bill makes it toothless. Specifically, the alternative compliance payment (ACP) is not mandatory. According to the Bill, the New York Public Service Commission is charged “… to establish an alternative compliance payment that electric distribution companies may pay in the event they cannot meet their annual SREC obligation [Emphasis added].” Without tougher language for enforcement, Bill S7093 may be ineffective. We look forward to tracking the development of this Bill, and will be sure to keep you posted.