Over the last year, the New York market has emerged as a solar hot spot. Several state and local incentive programs have been adopted or expanded, and the state now ranks 12th in terms of solar installed capacity, according to the most recent U.S. Solar Market Insight Report. Positive momentum continues in the state, and 2013 will be an even more promising year for solar projects in New York, as solar becomes an increasingly vital component of the state’s energy portfolio.
On January 9, 2013, New York’s Governor Andrew Cuomo announced the expansion of the NY-Sun Initiative for solar energy in his State of the State Address. The expansion will begin with an additional $150 million annually over 10 years committed to increasing solar project development through the NY-Sun Initiative. Governor Cuomo also discussed plans to create a $1 billion green bank and announced his appointment of Richard Kauffman as New York’s chairman for energy policy and finance. Richard Kauffman currently serves as the Senior Advisor to the U.S. Secretary of Energy, Steven Chu.
The additional $150 million per year commitment over 10 years to the NY-Sun Initiative will have a potentially significant impact on solar project development in New York. The NY-Sun Initiative aimed to “in 2012, install twice the customer-sited PV capacity added in 2011” and will, with the help of the announcement from Governor Cuomo, “quadruple that amount in 2013.” Two programs of particular note, deployed by the NY-Sun Initiative, include the Long Island Power Authority (LIPA) feed-in tariff program and the PON2589 NY-Sun Competitive PV Program through New York State Energy Research and Development Authority (NYSERDA).
Long Island Power Authority (LIPA) Feed-in Tariff Program
The LIPA feed-in tariff program, opened on July 16, 2012, allows for projects to enter into a Power Purchase Agreement (PPA) for 20 years for $0.22/kWh produced. The program will enroll 50 MW of solar energy by 2014 and has stipulated the following categories to reach that capacity:
- Category 1: 5 MW set aside for systems between 50 and 150 kW
- Category 2: 10 MW set aside for systems between 151 and 500 kW
- Category 3: 35 MW set aside for systems between 501 kW and 20 MW, or smaller if the above two categories are fully subscribed
The above listed categories will prevent smaller generators from being crowded out by larger generators, and will create adequate supply of smaller distributed generators, while also maintaining market stability for the local solar industry. LIPA will enroll systems on a rolling basis and will accept applications through June 30, 2014.
Furthermore, in October 2012, the LIPA Board of Trustees voted on a decision that plans to allow for an extension of the current feed-in tariff program and issue a new competitive solicitation for an additional 100 MW of renewable energy capacity, no later than July 31, 2013 under the Clean Solar Initiative Feed-in Tariff.
NY-Sun Competitive PV Program – PON 2589
The NY-Sun Competitive PV Program (NYSERDA PON2589) extends the Renewable Portfolio Standard (RPS) Customer-Sited Tier Regional Program to include upstate New York. This incentive is structured differently from a standard FIT contract.
Through this program, a winning bidder will receive a total incentive amount equal to their bid price in dollars per kilo-watt hour ($/kWh) multiplied by the project’s estimated site energy production and the 3- year incentive term. This incentive will be distributed in two upfront payments, totaling 30% of the total incentive amount. The remaining 70% will be distributed as a production based incentive (PBI) over the first three years of the project’s life.
The first round of bid submissions were due on December 5, 2012, but two additional solicitations have been announced for 2013 with due dates of March 14 and August 29.
Finance your New York Projects
Sol Systems is currently working on behalf of investors that are interested in both LIPA FIT projects and projects that have been awarded PON 2589 awards. If you have a project that has been awarded a LIPA FIT contract or has been bid into the PON 2589 program, and is looking for financing, please contact our team at firstname.lastname@example.org or (888) 23501538 ext.2. Our team would be happy to discuss your project with you and assess financing opportunities.
About Sol Systems
Sol Systems is a boutique financial services firm that offers investor clients direct access to the renewable energy asset class and provides developers with sophisticated project financing solutions. Founded in 2008, Sol Systems focuses on meeting the most critical needs of the industry, including SREC monetization, capital placement, tax equity, and New Market Tax Credits. To date, the company has arranged financing for thousands of projects and facilitated hundreds of millions in investment on behalf of Fortune 100 companies, private equity, family offices and individuals.