New York ranks No. 2 in the country in the completion of community distributed generation (CDG) solar projects, which comprise 60% of the statutory goal to deploy 6 GW of solar by mid-decade, state officials said Thursday.

“Today we are at 87% of our [total] 6 GW solar goal… and have established New York as one of the fastest-growing solar markets in the country,” New York State Energy Research and Development Authority (NYSERDA) CEO Doreen Harris said while co-hosting a technical conference on the value of distributed energy resources (VDER).

The conference, which also addressed potential ways to continue advancing commercial, industrial and community solar development (15-E-0751), was co-hosted by the state’s Department of Public Service. It will conclude with a second virtual session on May 7, to look at commercial, industrial and CDG policy options for pricing externalities, i.e., via monetary cost of damages or the marginal abatement cost. Following the second session, DPS staff will issue a white paper that incorporates comments submitted by stakeholders.

A damages-based approach would have the state set an externality value equal to the social cost of carbon (SCC), while the marginal abatement cost represents a price that society would need to pay to achieve a specific distributed solar goal.

New York’s Climate Leadership and Community Protection Act requires the state to consume 70% renewable electricity by 2030, switch to 100% zero-emission power by 2040 and reduce greenhouse gas emissions to 85% below 1990 levels by midcentury. The act also calls for the procurement of 6 GW of solar by 2025, 3 GW of storage by 2030, and 9 GW of offshore wind by 2035.

Value of E

“We’ve certainly made great progress…since our early days of experimenting with net metering,” Public Service Commission Interim Chair John B. Howard said. “As always, it is critical that the costs to abate carbon emissions continue to be driven down and that proposals continue to recognize the balance that must be struck by funding critical programs and consumer rate relief.”

The PSC’s VDER Phase One Order of March 2017 directed that the Environmental Value (E) be fixed for the life of the project, and set at the higher of either:

• the Clean Energy Standard Tier 1 renewable energy credit price, based on the latest Tier 1 procurement price published by NYSERDA, or
• the SCC net of the expected Regional Greenhouse Gas Initiative (RGGI) allowance values, as calculated by DPS staff (15-E-0751).

The DPS on April 21 issued an updated value of E at $31.03/MWh, up from the previous $27.41/MWh because of a higher SCC over time and based on the 20-year period from 2022 to 2041. DPS staff recalculated the SCC, net of RGGI allowance values, using the same method that was used in 2018.

Regarding the white paper to be issued following the conclusion of the technical conference in May, “we’re always balancing the appropriate compensation against the benefits to be paid for by New York state ratepayers,” DPS Director of Regulatory Economics Warren Myers said. “That’s why we have to go through this process of providing well-thought-out options to the commission rather than rushing to one solution.”

A December 2018 white paper said the commission must balance the desire to provide precision in compensation with the risk that a more sophisticated tariff may result in price signals that do not fully encourage and motivate developers and customers to make decisions based on the goal of maximizing grid value. (See NYPSC Refines Value Stack, Boosts Community DG.)

One unidentified stakeholder asked if the state could keep VDER stable to give certainty to investors.

“We hear you, and we discuss this all the time internally,” Myers said. “We take very seriously when we change VDER, but it was a brand-new program, and we did learn as we went along.”

While improvements to VDER in April 2019 might have been unstable in respect to tariff rules, they produced stabler revenues in some instances, he said.

“We tried to make the [demand reduction value] element more bankable by making it more reliable,” Myers said. “Now that has a downside in making it less dynamic in reflecting the changing system conditions, so we’re always trying to strike a balance between what economists might think is the best possible price signal, and what practical markets need to be able to invest.”