New York’s warming up to solar in a big way, setting a huge goal of getting 3,000 megawatts of solar energy in the state by 2023 – more than tripling the current yield, where solar is just a drop in the state’s total energy production. The man behind the effort is David Sandbank, director of NY-Sun, the state office that promotes solar energy. He talked to City & State on April 13 about welcoming community solar to the state, why New York lost solar jobs and how Long Island’s cooking with sun.
C&S: How important is solar energy in the overall Clean Energy Standard? Does it have inherent value in getting New Yorkers involved in clean power on a local level?
DS: As far as total capacity, it’s not close to hydro, and it’s less than wind. But what solar has that really helps in our REV (Reforming the Energy Vision) model is putting the distributed energy resource where the power is used. That on-site, behind the meter application is quite important to REV and important to alleviating pressure on the grid and making it more efficient. So that’s one.
Two, it’s important to the Clean Energy Standard. It involves a lot of people into the process. It creates solar customers and when you have solar customers, you have people that are energy-aware. Whether it’s residential or commercial or if it’s a community solar project, it’s always good to have all the partakers in the state that can have the option to participate in solar and then it’s gets them thinking about other areas in which they can contribute or benefit from on an energy level. They have a heightened awareness of their energy use and their generation.
C&S: How would you describe NY-Sun?
DS: NY-Sun has one goal: to lower the cost of solar, partner with the private market and get us to a self-sustaining solar industry by 2023. Really what we try to do and what we’re doing – I think quite well – is not only incentivizing projects to lower the cost, we’re also lowering the cost by helping to reduce barriers in the market. And that’s really important. Some of the barriers that come up when you’re permitting and zoning come on the local government side. So we’ve developed a New York Solar Guidebook for local communities so that if they have questions about anything to do with solar for their community, they can look at this guidebook and have total guidance so that they can make decisions on their own. And what that does, is it helps the solar community and it helps the local governments so they don’t make poor decisions and their decisions are well-educated. We also provide consultations and technical assistance and we’re going to be ramping that up a lot because community solar is creating a lot of activity.
C&S: And you’re in charge of incentives?
DS: Yes, in partnership with the Department of Public Service. We do the strategic planning around it, and then it gets approved.
C&S: A lot of community solar providers we talked to for our story said the state is hindering community solar with this long and arduous regulatory process. What’s your response to that?
DS: We have probably the best and most aggressive community solar program in the country because of its flexibility. And what I mean by flexibility, there’s a lot of different options a developer can choose. One example is you can swap out a subscriber on a month-by-month basis, which gives flexibility to the owner of the project to take greater risks in maybe who they might have as subscribers - maybe lower their credit score to lower customer-acquisition costs. So that’s one.
Two, we’re not just creating an order around community solar. We’re talking about doing something bigger than that. What we’re doing, community solar is a big part of, but what we’re doing is moving away from Net Metering (NEM) and towards a platform where solar is going to be valued on where and when, more than just a blunt valuation that NEM gets. That’s really important because we want to make sure there’s signals out there from the utility and just from the compensation that those price signals are going to give solar developers the knowledge on how to design solar projects where and when that electricity is most important. So that those projects, when they get on the grid, are a benefit to the grid and not a detriment to the grid.
So what we’re doing here in New York is bigger than just community solar. It’s moving away from NEM and moving towards, ‘how do you incorporate distributed energy resources into the grid so it makes the grid more efficient?’ And then it benefits not only off-takers of that solar project, but it also benefits rate-payers as a whole. So that’s why it’s taking longer.
We have probably the best and most aggressive community solar program in the country because of its flexibility.
C&S: I’m sure you saw The Solar Foundation’s February 2017 report that showed New York is one of the only states that saw a small loss in solar jobs in 2016, which they said was probably due to regulatory delays. Is that your interpretation as well?
DS: I think that’s part of it. It’s never one thing or another. Right now, we have a very big pipeline of community solar projects in the NY-Sun megawatt block program. To generate that pipeline – and the pipeline is much bigger than what we have already installed in the entire state right now. In order to develop that pipeline, it takes jobs, obviously to do the land acquisition and pre-development side to developing a solar project. But building those solar projects creates a lot more jobs, and they just haven’t been built yet. Because we have to make sure that we’re going figure out a way to compensate these projects where it’s fair for everybody in the state. That order came out already and now these projects are moving forward. My guess is we’re going to see an increase in jobs once these projects start getting built. And there’s a lot of them that are going to start getting built this year and then even more so the following year. That’s the community solar part.
The second part might be, you’re seeing a lot of consolidation in the large residential companies, some of which have abandoned residential solar and some have merged. What you’re seeing is a convergence of the large, national players. And it’s interesting because a lot of our local, homegrown solar companies are gaining in market share on the residential side. So that might account for some of the jobs as well, the consolidation of some of these larger, national players on the residential side.
C&S: How many solar projects are in the pipeline now?
DS: As of last month we had 814 megawatts of completed projects. On the pipeline right now, we have about 1.2 gigawatts (1200 megawatts).
C&S: Are all those projects in the pipeline going to happen?
DS: No, definitely not. Not all the projects will happen. At NY-Sun, we have to strike a balance between giving the solar developers enough information upfront so they know what their incentive is so that they can sign contracts with customers and move forward. We don’t want to give them too low of a barrier so that they come in, get the incentive and attrite out because there’s no skin in the game. So we have enough skin in the game where most of these projects will move forward. But a historical perspective, about 20 percent of that will attrite out.
C&S: Are there community solar projects that are currently operating in the state?
DS: Yes, there are. We have six that are currently interconnected and working. That makes up a part of the 814 megawatts in the state. It’s interesting because community solar is not just a few developers, there’s all different shapes and sizes to this. And community solar is also a good opportunity to really increase the amount of low-income demographic into the solar community as well. So we have a lot of plusses with it, but again, it’s something new. Anytime you have a new product, there’s a transition phase. We’re getting into the end of that transition phase from pre-development into building. I could see a pretty decent amount of projects that are going to get built by the end of this year. Not the majority of the pipeline, but a decent part.
C&S: New York has set a goal of 3,000 megawatts of solar energy in the state by 2023. That’s a big goal, you’re going to need to more than triple the current capacity. Is the state on track to get there? Are you confident it’ll be reached?
DS: I’m fairly confident because, number one, not everybody’s going to get there at the same time. Long Island residential is there now – when I say there, I mean incentive-free and still moving forward. Long Island is moving forward on the residential side without incentives, so we’ve achieved our goals there and so far it’s working and that’s great. On the residential market in the rest of the state and Con Ed, it’s cooking! It’s slightly ahead of schedule and there’s no slowing down. And that’s great.
Where it’s slow right now is commercial in Con Ed (service territory). And there’s reasons for that. Real Estate roof space is hard to come by for larger projects. We at NY Sun are looking at ways that we can help out. We talk with stake-holders and because the VDER order came out, it’s going to cause us, rightfully so, to talk about how to adapt our program around that order and there might be some changes we make to make it catch up in New York City. But with the look of our pipeline and the way the residential market is moving, we’re looking pretty solid here.
C&S: When it comes to valuing distributed resources, is there a balance between crafting good policy and not taking too long so developers don’t lose interest?
DS: I would say that there’s more to balance than that and that’s why it takes a little while. You have so many different perspectives. What we did here in New York state is we included throughout this – I think it was like a 12-month or 14-month process – a series of stakeholder meetings with the joint utilities, with the rate-payers with low-income advocates, the solar community, it’s non-profits, NYSERDA, DPS. All the input was given over a period of time because really what they wanted to do was design a program that’s not overly favorable for one or another. So that’s why they came up with, ‘let’s look at rate-payer impact, let’s look at how it’s going to help the grid, let’s hold the utilities accountable for telling us how to get price signals that helps the grid. So there’s all these different aspects to it, so when someone comes that’s new to it, it’s surprising how intricate it can get can, but it’s really important that you do all that work ahead of time so that when you come out with Phase One, there’s a transition but Phase Two can go smoother. And now when we’re putting solar and distributed energy resources onto the grid, there’s a holistic process behind it. It’s not just, let’s figure out how to do this without understanding repercussions of this. So that’s how I would explain it.