The New York Public Service Commission has issued new interconnection rules for distributed energy resource developers and utilities aimed at capturing as many expiring Inflation Reduction Act tax credits as possible for wind, solar and storage projects (24-E-0621).
Issued Jan. 22, the rules require utilities to develop schedules and plans for completing the utility-side work to interconnect DERs seeking tax credits.
The One Big Beautiful Bill Act, signed into law on July 4, 2025, terminated the IRA’s tax credits for wind and solar facilities going into service after Dec. 31, 2027. Under orders from President Donald Trump, the IRS established a deadline of July 5, 2026, for projects to have begun construction to qualify for the credits.
The IRS defined having “commenced construction” as developers having begun the physical work (whether on- or off-site) and having a continuous construction schedule. For small solar projects (1.5 MW and below), spending 5% of the cost of the project by the deadline satisfies the requirement. The IRS allowed for a four-year “safe harbor” allowance for construction delays outside the developer’s control, like natural disasters or work stoppages.
The PSC divided DER projects into two groups based on whether the project requires utility-side system upgrades. For those that do, the commission gave utilities some discretion in how they choose to schedule the interconnection work, so long as they meet the IRS deadline. Utilities must offer first-scheduling opportunities for developers who opt in to an accelerated procedure and must supply preliminary work plans for the upgrades by May 1. Developers must pay for their share of the upgrades by June 1. Final work plans must be published no later than July 15.
The PSC also implemented some comments from the utilities, adding deadlines for developer system upgrade payments to utilities. If a project is at risk of not making the deadline, the PSC authorized utilities to consider alternatives.
Taken together, “this approach improves the utilities’ ability to plan and deploy their engineering and construction resources to support tax-credit eligible projects, ahead of others that are not eligible,” the PSC said in a press release. “Today’s action also provides developers flexibility to manage the development of their projects as needed, while providing greater certainty that IRS in-service dates will be met.”
