May 20, 2019
LIPA response to: Order Regarding Value Stack Compensation
Dear LISEIA Board:
Thank you for your April 25, 2019, letter to the Long Island Power Authority Board of Trustees regarding the New York Public Service Commission’s Order Regarding Value Stack Compensation (the “Order”), issued on April 18, 2019. We share your interest in implementing New York State policy· on Long Island and supporting the cost-effective deployment of renewables.
New York State launched the Reforming the Energy Vision initiative in 2014 with the goal of enabling the transition to a cleaner, more affordable, more resilient electric grid capable of integrating diverse resources and animating markets for distributed energy products and services. In 2017, with this goal in mind, the Public Service Commission took a step toward reforming compensation of distributed energy resources with the Order on Net Energy Metering Transition, Phase One of Value of Distributed Energy Resources Order (the “VDER Phase One Order”). The VDER Phase One Order transitioned a subset of distributed energy resources from net energy metering to a new value-based compensation system. LIPA implemented the VDER Phase One Order in December 2017, with some project types grandfathered until May 2018.
Over the last two years, the Department of Public Service has hosted a series of stakeholder working groups, solicited public comments, engaged expert consultants, and issued staff white papers for further discussion and comment with the aim of refining and improving the value-based .compensation of DERs. 1 LIPA, PSEG Long Island, and Long Island stakeholders have engaged with these statewide policymaking activities. These statewide proceedings and working groups are the venue for stakeholders to influence the policymaking process.
The April 2019 Order is one of the fruits of this collaborative effort. The Order takes steps to increase the certainty and predictability of value stack compensation. The provision of the Order addressed by your letter is the extension of eligibility for net energy metering to systems under 750 kilowatts in size and located onsite at a demand-metered commercial customer. Per the Order, this proposal would apply, at a minimum, to all such projects that qualify before January 1, 2020, for a 20-year term from each project’s in-service date.
The Authority intends to implement the Order, including the 750 kilowatt provision, at the July 2019 meeting of the Board of Trustees. Your letter requests that the Authority guarantee that similar projects qualifying after January 1, 2020, will continue to be eligible for net metering. Creating such a guarantee would foreclose the Authority implementing statewide policy in the event the statewide proceedings reach an alternative conclusion. Accordingly, the Authority cannot offer such a guarantee. We note, however, that other changes to VDER set forth in the April Order-such as the new community credit and the extended lock-in of the distribution values- both enrich the level of compensation and increase the predictability for project owners.
Your letter refers to a decrease in applications for new commercial solar projects, which you attribute to VDER. We have been monitoring the number of applications for solar projects that meet the criteria for VDER eligibility. In the year since VDER Phase One became effective on Long Island, the utility has received 47 applications for new VDER-eligible projects, with a combined nameplate generating capacity of over 12 megawatts. In the first four months of 2019, we have received 14 such applications. This is slightly below 2017 (the most recent year unaffected by VDER), when we received 17 applications for similar projects over the same period. We expect that the changes made in the PSC’s April Order, which will be brought to the Authority’s Board in July, will further improve these numbers going forward.
Finally, your letter also requests additional conversations to be held among Long Island stakeholders regarding rate design and renewable energy deployment. While the Authority and its staff are always willing to engage stakeholders in conversations on these topics, we note that these issues are driven by statewide policy, and thus the statewide proceedings and working groups are the venue for stakeholders to influence these policies.
Secretary to the Board
LISEIA response to: VDER / NYS DPS Staff Whitepaper
LIPA Board of Trustees,LIPA Board of Trustees,
As you may know, the long-awaited State order on VDER came out on 4/18/2019. Many items in the final order were consistent with the Staff’s Draft Whitepaper. We urge the LIPA Board to adopt it immediately and as-is with the below few suggestions.
1. Extend the exemption past the end of this year. The state’s order allowed systems under 750kW AC in size to continue with net metering. Due to the long timeline for commercial project development, this is simply not enough time to get jobs completed. To wait an entire year to receive a 5-month reprieve before going right back into an unknown structure is simply not the “predictability and certainty” necessary to operate a business.
To ensure predictability and stability in the market over the next few years, especially in light of federal tax credits phasing out at the same time, we recommend a long-term exemption of 750kW and under. We believe that a 5-year runway would provide a healthier pathway for growth and deployment of all systems 750kW and under including CDG (Community Distributed Generation), RNM, and residential.
2. Active participation in rate design conversations by LI Stakeholders for future changes. We acknowledge that exempting systems 750kW and under is a band aid, not a fix. We are ready to work together to find a suitable solution to catalyze solar growth and meet stakeholder needs.
We believe that a predecessor step to solar dynamic pricing should be dynamic pricing on all consumption so as to use market forces to impact behavior of all electricity consumption and generation. Taking action on the storage and demand side of the equation will allow us to more organically shape a smarter, more resilient energy plan by using market forces.
As the State continues with conversations in Albany and NYC around storage and rate design, we ask that the Long Island stakeholders reconvene to discuss how this would affect rate payers and renewable energy deployment in our region.
The above suggestions were included in our 2/1 letter to the LIPA Board. LISEIA and stakeholders received no formal response from LIPA Board or Staff on this letter except for a question from Trustee Gollon about the figures used in our letter. For the record, we stand by the statistics mentioned in our letter. Without eliminating or filtering out any data, the applications for commercial projects on LI dropped over 75% between the 8 months before VDER and the 8 months after VDER went into effect, showing a serious impact on solar development in the region.The above suggestions were included in our 2/1 letter to the LIPA Board. LISEIA and stakeholders received no formal response from LIPA Board or Staff on this letter except for a question from Trustee Gollon about the figures used in our letter. For the record, we stand by the statistics mentioned in our letter. Without eliminating or filtering out any data, the applications for commercial projects on LI dropped over 75% between the 8 months before VDER and the 8 months after VDER went into effect, showing a serious impact on solar development in the region.
As we all know, the commercial side of the solar industry has sat mostly idle for almost a year as we await the untangling of regulatory processes at Public Service Commission and the LIPA board. Given the impending step down of the Federal Tax Credit, this is a very timely issue we’re facing. We ask that you take all means necessary to get this into action for the May LIPA Board meeting so we can get back to work.
LISEIA BoardArthur Perri – Tara Bono – Bill Feldman – Concetta Forgione – Stephen Foley
NYSEIAShyam Mehta, Executive Director
CC: Senator Todd Kaminsky, Senator Kevin Parker, Assemblywoman Amy Paulin, Assemblyman Steve Englebright, County Executive Steve Bellone, County Executive Laura Curran, John Rhodes, Chair, PSCRichard Kauffman, NY Chairman of Energy and Finance Tom Falcone, CEO, LIPADaniel Eichorn, President and CEO, PSEGLI David Sandbank, Director Distributed Energy Resources, NYSERDA Michael Deering, LIPA Bob Boerner, PSEGLI
February 1, 2019
LISEIA response to: VDER / NYS DPS Staff Whitepaper
In the matter of the NYS DPS Staff Whitepaper on Future Community Distributed Generation, please see below comments submitted to the state by the CEP (Clean Energy Parties) to which we are a part of through the New York Solar Energy Industry Association (NYSEIA) LISEIA’s parent.
In addition to the points below made by CEP, we strongly support the Staff recommendation of exempting systems 750kW and under from being under the VDER (Value of Distributed Energy Resources) tariff. The white paper reads: “Specifically, Staff proposes that Phase One NEM be available for projects that (a) have a rated capacity of 750 kW AC or lower; (b) are at the same location and behind the same meter as the electric customer whose usage they are designed to off-set; and (c) have an estimated annual output less than or equal to that customer’s historic annual usage in kWh.”
As you may know, switching from net metering to VDER on Long Island on May 1, 2018 severely hurt the Long Island solar industry and set us back in our goals to deploy renewable energy in the region. As of this fall, commercial applications had dropped by over 70%. Our member companies are reporting an even larger decline.
Immediate Action. We urge LIPA to act and vote on this matter as soon as possible and not wait for the state to begin proceedings. This exemption would allow the Long Island Solar Commercial solar industry to get back to work and continue helping small and large businesses on Long Island make the switch to clean energy. As we all know, the commercial side of the solar industry has sat mostly idle for almost a year as we await the untangling of regulatory processes at Public Service Commission and the LIPA board. Given the impending step down of the Federal Tax Credit, this is a very timely issue we’re facing.
CESIR (Coordinated Electrical System Interconnection Review) Relief. We ask for a logistical fix to this delay. The LI Solar Industry should be permitted to begin applying for interconnection, going through the extended CESIR and relay review process (which takes several months), in advance of the final acceptance of the PSC order by LIPA. We need to be able to confidently propose and sell projects and take on I/C application costs with the understanding that they will be considered for NEM if under 750kW AC.
RNM (Remote Net Metering) Continuation. Also and of major importance to clarify. Under NEM (Net Energy Metering) rules we were able to design and develop projects that overproduce energy during the Period 2 rate period (summer peak) and use RNM to send monetary credit to another associated commercial PSEG account. This also applied to over producing during other rate periods. It’s critical that when NEM is re-established we have that same ability. Many of our projects provide grid relief during peak summer days and that energy would be stranded and lost to a wholesale rate during the annual reconciliation. We urge LIPA to confirm that the same rules of RNM will be in play when NEM is reestablished.
Long Term Planning. The state white paper suggested exempting 750kW through 2020. Unfortunately, that only gives us 6 months at most to sell jobs under NEM. To ensure predictability and stability in the market over the next few years, especially in light of federal tax credits phasing out at the same time, we recommend a long-term exemption of 750kW and under. We believe that a 3-5 year runway would provide a healthier pathway for growth and deployment of all systems 750kW and under including CDG (Community Distributed Generation), RNM, and residential.
We urge the LIPA Board to move expeditiously in whatever processes are necessary to adopt the state’s final recommendation and ultimate order. We ask that you plan and act now to set public hearing dates and comment periods so that once the order is out, the board can simply vote at the March meeting instead of starting from scratch in March for SAPA and waiting until best case May or worst case, July to vote on this matter.
Not a permanent Fix. We also ask you to realize that this 750kW and under exemption is a band aid, not a fix. We are ready to work together to find a suitable solution to catalyze solar growth and meet stakeholder needs. We believe that a predecessor step to solar dynamic pricing should be dynamic pricing on all consumption so as to use market forces to impact behavior of all electricity consumption and generation. Taking action on the storage and demand side of the equation will allow us to more organically shape a smarter, more resilient energy plan by using market forces.
Last year, state legislation was introduced to do just this; pause VDER while we focus on getting this policy right for the long term. We are actively working with elected officials on this again. Phase II proceedings are currently on-going, and the results of those efforts should be the predecessor step to implementing any further changes. Last year, there was no crisis that necessitated the overnight change – we acted hastily, and everyone was hurt by it, including the state’s goal to get to 50% renewable energy by 2030. As of January, that is now 100% by 2040, so we have put ourselves very behind over this past year.
As per above, we see it essential that mass market VDER roll-out is postponed 3-5 years to give a chance to determine the best rate design methodology for all energy consumers.
The focus of this letter is that we request rapid adoption of the whitepaper recommendations on VDER. We do have other priorities that we hope to work on together, including launching
a battery incentive program, a focus on synergies with the state interconnection policy and technical working group, and overall incentives to help drive dramatic growth of solar energy on Long Island.a battery incentive program, a focus on synergies with the state interconnection policy and technical working group, and overall incentives to help drive dramatic growth of solar energy on Long Island. In closing, we ask that we take this time to work together and meaningfully towards a mutually beneficial solution to plan a sustainable energy future. Given the volatility at the state level, and the lengthy timeline for commercial solar, and impending Federal Tax Credit step down, we respectfully request that the LIPA Board acts now to implement the DPS Staff suggested changes and the Solar Industry suggested changes.
Kyle Strober, Executive Director
Association for a Better Long Island
Kevin Law, President and CEO
Long Island Association
George Povall, Executive Director
All Our Energy
Lisa Tyson, Director
Long Island Progressive Coalition
Jessica Azulay, Executive Director
Alliance for a Green Economy
Neal Lewis, Executive Director
Sustainability Institute at Molloy College
Adrienne Esposito, Executive Director
Citizens Campaign for the Environment
Eric Alexander, Executive Director
Vision Long Island
Barbara Warren, Executive Director
Citizens’ Environmental Coalition
Sammy Chu, Chairman
Energy Democracy Alliance
Terri Alessi-Miceli, President & CEO
Gordian Raacke, Executive Director
Renewable Energy Long Island
CC: Senator Todd Kaminsky
Senator Kevin Parker
Assemblywoman Amy Paulin
Assemblyman Steve Englebright
County Executive Steve Bellone
County Executive Laura Curran
John Rhodes, Chair, PSC
Richard Kauffman, NY Chairman of Energy and Finance
Tom Falcone, CEO, LIPA
Daniel Eichorn, President and CEO, PSEGLI
David Sandbank, Director Distributed Energy Resources, NYSERDA
Michael Deering, LIPA
Bob Boerner, PSEGLI
August 31, 2018
LISEIA response to “Sunburned“ – the Newsday/News 12 joint investigation.
In every industry, there are good and bad actors. The Newsday/News 12 joint investigation “Sunburned” highlights the bad apples that permeated the solar energy industry on Long Island. The Long Island Solar Energy Industry Association (LISEIA) commends Newsday and News12 for its comprehensive investigation of unscrupulous solar companies using aggressive and predatory sales tactics.
As Long Island’s only solar industry organization, LISEIA’s 30+ members adhere to a stringent code of ethics. Aggressive and misleading sales tactics are not welcome on Long Island, and those companies are not welcome as members of LISEIA.
With more than 35% of New York State’s solar energy activity, Long Island is the state’s largest market. One in 25 Long Island homes has gone solar. The environmental benefit of these installations is equivalent to taking 63,744 cars off Nassau and Suffolk’s roads. Solar energy is an important component of Governor Cuomo’s aggressive carbon reduction initiative and goal towards 50% renewable energy powering the state by 2030. Long Island’s role in solar energy can pave the way for New York to be a national model for renewable energy.
Over the past decade, residential solar projects have put millions of dollars back in the pockets of Long Islanders, creating a ripple effect that in turn helps boost the regional economy. Many new solar customers tend to be middle- and lower-income families who not only want to save money but leave their children and grandchildren with a better environment. Among the most popular communities for solar installations include Brentwood, Lindenhurst, Bay Shore, Levittown, and Massapequa.
It’s unfortunate that some, not all, solar sales companies, blatantly mislead homeowners on system costs, project over-optimistic and exaggerated savings, and knowingly sell systems that will not perform to expectations. Many of these companies knowingly approached the elderly, uneducated, and low-income residents, who never had a chance to do their research, but were strong-armed into signing a 20-year solar contract at the promise of “free” solar.
However, most solar companies are doing the right thing; delivering real savings and providing significant environmental benefits to our region.
Going solar is a major investment that requires extensive homework. In effect, you’re buying your next 25+ years of electricity that can easily translate into more than $90,000 in savings. It is critical that homeowners do their solar research and explore several options before choosing a financing plan, selecting the product, and hiring a reliable company to perform the work. Consumers should ask about product warranty; the experience, and qualifications of the installer; the various financing options available; available rebates and tax credits; compatibility with the local utility; the local permits required; and other important questions. Potential customers should also ask for local references.
We encourage homeowners to be cautious of salespeople misrepresenting themselves as part of the utility company, a state program, or a local university. The New York State Energy Research and Development Authority (NYSERDA) has begun to crack down on this dubious practice and requires that all solar companies file a report acknowledging compliance with the order establishing the Uniform Business Practices for Distributed Energy Resource Suppliers.
Solar is never “free”. Anyone making such a claim is dishonest. While the electricity produced from solar panels is indeed cheaper than buying energy from the utility company, it is important to discover how exactly you will pay for it. Some options include purchasing a system upfront and essentially pre-paying the next 25 years or so of energy while reaping significant long-term savings. Financing, often with a monthly payment that is less than what the electric bill was before until the loan is paid off, leaves the consumer with essentially no electric bill. Others may choose to lease or rent panels, saving a little bit each month for a term of typically 20 years.
As more homes switch to solar, it is important for the real estate industry to prepare for home sales and make sure the solar system is properly valued. Hundreds of homes on Long Island have already sold successfully with solar. With a leased or a financed system, there is often a lien on the equipment itself and not on the home. Unfortunately, many banks are not as experienced with this and see this as a hurdle they do not have a process for. Financial institutions are quickly catching up on how to deal with such transfers seamlessly.
LISEIA members have been educating the real estate industry to make sure they are familiar with the terms and conditions of solar agreements. If appraisers use the right resources, an owned solar system could add $20,000 or more to the value of a home according to third-party studies.
Like any industry, there are bad apples, but we will not let them ruin the whole bunch. Many of the companies mentioned in the investigative report are no longer in business or have left New York, thus leaving behind a solar industry better than ever before. There are many trusted and reliable solar companies doing business in Nassau and Suffolk counties. Reputable companies will explain the options available to help homeowners go solar and save thousands of dollars in electric costs.
The future of solar in our region is bright, and we anticipate that out of the roughly 500,000 homes still eligible for solar, 85% of them will install a system in the next 12 years. Solar tax credits remain strong, and Long Islanders should not give up on solar energy, knowing that it is a viable means of reducing energy costs and helping the environment.