Sunday, March 11, 2012
LIPA prepares to heat up solar incentives
Long Island Business News
Published: March 6, 2012
Just days after the reducing existing incentives for companies installing solar power, the Long Island Power Authority is gearing up to launch a new, far-reaching incentive program in which it will pay customers based on the solar power they produce.
LIPA Chief Operating Officer Michael Hervey described the program, which could be in place as early as this summer, during his speech at the Hauppauge Industrial Association’s annual energy update on Tuesday.
The authority hopes to formally announce a feed-in solar tariff rate in April, paying customers based on solar energy they generate, although the program wouldn’t launch immediately. Feed-in tariffs have been used in states such as California and Florida, where solar energy has caught on rapidly.
Although the tariff would apply to both residential and commercial customers, Hervey said it could make bigger installations, in particular, more economical.
“It’s more of an incentive for medium-to-larger solar installations,” Hervey said. “It allows medium-to-larger solar installations to feed directly into the grid and get paid a fixed price for selling into the electric grid.”
Hervey announced the broad outlines of the program, but not the rates or details, days after the authority cut its commercial solar rebate from $1.75 per kilowatt to $1.50, matching the rest of the state.
“It was so successful that just last week we had to drop the rebate amount,” he said. “We had a very high subscription rate for the commercial program in December and January. We’re well on our way to using our whole year quota for commercial solar.”
LIPA hopes the feed-in tariff could generate a new burst of interest in larger projects, further fueling solar power on Long Island. Hervey said the tariff would supplement existing programs, such as solar installation rebates that are driving a shift to solar.
“It’s all about policy,” said Neal Lewis, executive director of the Sustainability Institute at Molloy Collegeand a LIPA board member. “You can train people to install solar panels. But if you don’t have the right policy, they won’t get a job. We’re expanding.”
Solar contractors said small solar installations already caught on in this region, but a feed-in tariff could prompt a new generation of projects.
“The market is very driven by regional policies, such as LIPA’s program,” said Gentry Rouse, director of business development for Clermont, NY-based Premier Power. “In New York, we’ve seen a market for smaller systems. This feed-in tariff opens up the opportunity for larger systems.”
Supporters of feed-in tariffs point out that systems are reimbursed based not on cost, but generation, so efficient systems are rewarded at a higher rate.
“When you look at large commercial systems, you can get the price per installed solar down,” Rouse said. “The paybacks are there really for larger systems.”
A National Renewable Energy Laboratory study of feed-in tariffs described various types, including some that are constant, while others vary based on energy cost.
Utilities in Florida, Hawaii and Vermont have adopted feed-in tariff policies based on the cost of generation, while Maine adopted a cost-based tariff with a cap. California, on the other hand, adopted a feed-in tariff based on “avoided cost” related to market prices.
LIPA also is developing a remote net metering tariff in which companies that install solar power away from their facilities will be able to reap benefits of solar programs.
“That opens up some real possibilities, being able to use property in less dense areas to net meter usage against a building in a higher density area,” Hervey said.
Hervey said the authority hopes the feed-in tariff as well as streamlined and standardized permitting will lead to a new crop of solar projects as more medium-sized businesses get on board. “It certainly opens up another market,” Hervey added of the tariff. “We’ll have to see what it brings. It’s meant to be a whole new market.”
The feed-in tariff is part of several changes in the works for solar programs, for which LIPA has about $25 million set aside for incentive programs. There are currently about 70 megawatts of solar power on Long Island.
LIPA, meanwhile, has led a push for towns to sign on for a uniform solar code, in which standard regulations and costs govern installation.