New York Calls for Renewed Investment, Policies to Grow State’s Solar Industry

New York should support continued investment in the deployment of solar photovoltaic (PV) power within its borders, despite ongoing uncertainties about the future costs to ratepayers, says a new report from the New York State Energy Research and Development Authority (NYSERDA).

A law enacted last year directed NYSERDA to conduct the study, which assesses the costs and benefits of installing 5,000 megawatts (MW) of PV in the state by 2025, compared with its current capacity of 19 MW.

That goal could cost anywhere from $1.4 million to $4.3 million per installed MW, depending on a range of factors, including the availability of federal tax credits and the cost of photovoltaic panels, which have slid by 40 percent in the last year alone, according to industry sources.

Costs are falling so fast, due to a variety of global forces and increased efficiencies, that solar could conceivably compete with regular grid power without any need for subsidies within the next five years, several industry sources said during a hearing in Harrisburg, Pennsylvania last month on a bill to bolster that state’s solar market.

If achieved, New York’s 5,000 MW goal would lead to a four percent drop in fossil fuel consumption production in the state and a three percent decline in carbon dioxide emissions, and create 2,300 jobs directly related to solar installation. But the overall impact to the economy would be negative, largely because of the cost to ratepayers – which would range anywhere from $300 million to $9 billion, depending on different modeling scenarios, the study says.

“Nevertheless, even with this range of cost uncertainty, given the many potential benefits that PV has to offer and the long-term potential for lower-cost PV technology, New York State should support continued investment in the steady and measured growth and deployment of PV as part of a sound and balanced renewable energy policy,” the report says.

New York’s current installed solar PV capacity of 19 MW places it well behind other states in the region, according to the National Renewable Energy Laboratory’s online ranking of state PV installations. New Jersey, for example, is home to 186 MW, the second-highest capacity after California, followed by Pennsylvania with 58 MW, Massachusetts with 35 MW, and Delaware and Connecticut each with roughly 26 MW.

The NYSERDA study reviewed a range of policy options being employed in the U.S. and abroad to spur investment in solar power. The magnitude of the cost uncertainties associated with implementing the 5,000 MW goal “suggests the need for a policy response and investment strategy that is both flexible and responsive,” the report says.

Recommendations include continued development of policies such as net metering, sales tax exemptions and interconnection standards that could reduce the cost of PV installation. The study also calls for more streamlined permitting processes, and continued financial support for targeted research and development, workforce training and business development, which could help lower installation costs.

Solar proponents also note that once solar is installed, it can actually lower overall electricity prices for customers and reduce costs for utilities by relieving grid congestion. For example, a solar PV installation near Allentown, Pennsylvania will save a school district there $3.8 million in electricity costs over 20 years, said an industry source testifying at the hearing in Harrisburg last month. In addition, the solar panels will send any excess electricity back into the grid, relieving demand bottlenecks and enabling the utility to avoid making costly upgrades on currently stressed distribution lines, he said.

In New Jersey, several county governments have implemented financing models for solar that are reducing costs by up to two thirds over 15 years.

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