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Solar in New York: Its Strategy to Make Solar Shine

New York is home to Wall Street, Broadway, and arguably the best pizza in America. It can do so much so well. Why not large-scale solar?

'Relative to New Jersey, California, even Massachusetts to some extent, and Colorado and Arizona, New York has not stepped up to the plate,' said Carrie Cullen Hitt, vice president of state affairs for the Solar Energy Industries Association (SEIA).

The numbers support Hitt's argument. Of the roughly 30,000 MW of utility-scale solar operating, being built or developed in the US, a mere 57 MW can be found in New York, according to SEIA. Neighbouring New Jersey beats it by more than four times. And California's 18,231 MW makes New York look like an ant next to a mountain.

Solar advocates find New York's lack of large-scale solar frustrating because the state has the right elements to build a strong market. Electricity rates are high, consumers are green leaning, and transmission is constrained, at least in the densely populated southern tier of the state.

'As the solar industry looks at potential new markets, New York is probably among the top three,' said Fred Zalcman, northeast managing director of regulatory affairs for SunEdison. 'The market is very attractive for a number of reasons, not the least of which is that retail prices, certainly in parts of New York state, are among the highest in the country. The trajectory to grid parity is much better in New York than most of the rest of the country.'

This is not to say that New York lacks renewables. Governor Andrew Cuomo's office pegs the state's renewable energy portfolio at about 2000 MW, much of it from wind power. In fact, New York held the 12th position for wind power generation nationwide last year, according to the American Wind Energy Association. This is impressive considering that New York lacks the large swathes of open land characteristic of many high ranking states. New York is 30th in geographic size among the states.

The good news is that New York's era of solar neglect may soon be coming to an end. Policymakers, as well as the electric industry, are pressing forward with new ways to build a market and attract large photovoltaic projects.

Solar Times Four

The change begins at the top. In Cuomo's 2012 annual state-of-the-state address in January, he launched the NY-Sun Initiative. Its goal? To quadruple solar by 2013, with much of the growth from large-scale solar.

'Over the decades, we have aggressively developed our hydroelectric resources and are making great progress in tapping our land-based wind resources. Now it is time to focus more attention on exploiting our solar potential,' he told lawmakers in the speech.

To that end, Cuomo proposed competitive bidding to attract large-scale solar projects. The New York State Energy and Research Development Authority, a quasi-government agency known more commonly as NYSERDA, has set out a plan to realise Cuomo's goal, which the authority says could bring 269 MW of solar to the state from 2012-2015, and 110 MW some time after. NYSERDA calls the plan 'aggressive but achievable'.

To meet the new goal, NYSERDA has asked the state Public Service Commission for US$54 million per year over four years, a doubling of its solar budget. About 75% of the money, or $39 million a year, would go towards large-scale solar.

The solar industry is praising Cuomo's effort, but also acknowledges its shortcomings. While Cuomo's programme speeds up solar development for the short term, it does little beyond four years. To attract industry investment, the state must provide a more consistent policy for long-term growth, say solar advocates. To that end, they have been pushing for a solar feed-in tariff (FiT), solar renewable energy credits (SRECs), or other methods to move the industry beyond developing hundreds of megawatts of solar into thousands of megawatts.

But that means winning support within New York's tumultuous and often distracted legislature. Last year, advocates carefully nurtured a solar bill that would have fostered development of 2500-5000 MW of solar. But it never became law; legislators turned to other issues, including the state budget, and the solar plan was put on the backburner for further study by NYSERDA.

In January, NYSERDA responded with a report that looked at the impact of developing 5000 MW of solar by 2025. The results were somewhat inconclusive because of the difficulty predicting how quickly solar costs will drop and what the future holds for federal tax incentives. Assuming solar costs could be anywhere from $1.4 million to $4.3 million per installed MW by 2025, ratepayers would pay a low of $300 million to a high of $9 billion.

The low-cost scenario produced a net benefit for ratepayers; the high case a net cost. For example, New York would create 700 jobs if solar prices fall to the low end, but lose 2500 jobs at the high end. At the same time, 5000 MW of solar would lead to environmental benefits: a 4% reduction in fossil fuel use, a 3% drop in carbon dioxide emissions, a 4% drop in nitrogen oxides, a 10% drop in sulphur dioxide and 3% drop in mercury. To reach such an ambitious goal, the state needs to pursue solar with a policy that is 'both flexible and responsive', said NYERSDA. Such a policy would include the kind of metering, sales tax exemptions and interconnection standards that drive down solar costs.

'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,' said NYSERDA.

Cuomo also is opening up new opportunity for big solar projects through his new 'Energy Highway' initiative to upgrade the state's ageing infrastructure. As part of the initiative, his office issued a formal solicitation in April 2012 seeking ideas from developers, utilities and others about how to fix various energy problems. One of the problems is how to attract more utility-scale renewable energy to New York, so that it reaches its target of getting 30% of its electricity from renewable energy by 2015 and more beyond that. A special task force plans to review the submissions and propose an Energy Highway strategy this summer. The state hopes to draw $2 billion in private investment.

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Long Island as Leader

NYSERDA isn't the only public entity working to bring more solar to New York. Two other authorities manage and deliver large amounts of electricity in the state: The Long Island Power Authority (LIPA) and the New York Power Authority (NYPA).

Both are focusing strongly on solar. In fact, LIPA is New York's star when it comes to large-scale development. With 1.1 million customers, LIPA is a large municipal utility, and has the second-highest revenue among US municipal electric utilities. LIPA also has fostered more large-scale solar - 50 MW - than any other New York utility (see sidebar opposite). And it has plans for even more.

Why has LIPA developed so much more large-scale solar than any other utility in the state? First, its electricity rates are among the highest, creating a smaller gap between grid and solar prices than is found in other parts of the state. Second, as a municipal utility it operates with a nimbleness not possible for investor-owned utilities that are subject to greater state regulation and oversight.

'Politically, it is easier for LIPA. They govern themselves, like any municipal utility. They have a more streamlined process,' said Hitt. LIPA is able to avoid a problem that has held up solar development in New York: co-ordination among many players. 'It isn't easy getting all of the players around the table,' she said.

Moreover, Long Island has weather fit for PV. 'It is an obvious resource - we have sunny days most days of the year here,' said Michael Hervey, LIPA's CEO.

Now, LIPA plans to continue advancing solar by introducing the state's first feed-in tariff (FiT). 'Governor Cuomo's announcement of quadrupling of solar in New York State fits well with our plan,' said Hervey. 'Our energy plan calls for the next 50 MW block of solar. What we've decided to do is not go out for a request for proposals, but introduce a feed-in tariff.'

Details of the FiT were being worked out this spring, with LIPA scheduling a vote of its board on the plan in May, as REW goes to press. The FiT marks a diversion from the utility's initial approach to securing large-scale solar. In the past, LIPA issued a solicitation, chose winning developers and projects, and then signed long-term power purchase agreements with them. The long-term commitments from a credit-worthy utility helped the projects secure financing.

LIPA expects the FiT to lead to even more large-scale solar on the island. 'The FiT and fast-track interconnection standards will open up quite a bit of opportunity for commercial rooftop, commercial parking lots, landfills - places that are several acres in size. We're making it simpler for developers to provide us with solar in that size tranche,' said Hervey.

Solar Map

Meanwhile, the New York Power Authority, the largest state-owned power organisation in the US and operator of several hydroelectric facilities, has launched a programme to drive down solar costs. Called the NY-Sun Solar Market Acceleration Programme, or Solar MAP, the $30 million, five-year programme will focus on PV research, training and demonstration projects.

'The NY-Sun Solar Market Acceleration Programme is designed to target and reduce solar development costs to spur New York's technology leadership in this important renewable energy market,' said Gil C. Quiniones, NYPA's president and chief executive officer.

NYPA will seek studies on reducing costs for solar equipment, including racks, inverters, monitoring devices and modules. The aim is to demonstrate new technology, system-integration strategies, cost reductions and safety. NYPA will also explore soft-cost reduction strategies to standardise permitting and streamline grid integration.

Separately, the authority has used its low-cost hydropower to help solar manufacturing in the state. NYPA granted hydropower allocations to Globe Specialty Metals when the company reopened and expanded by $60 million in western New York in order to manufacture silicon for solar power systems. NYPA also allocated hydropower to Precision Electro Minerals, in western New York, which manufactures fused silica for solar-panel grade silicon and other industrial products.

On a less optimistic note, NYPA closed a solicitation in spring 2012 without making an award for 100 MW of PV. Issued in 2010, the solicitation sought private developers who would own and operate solar systems at public facilities. The solicitation failed for several reasons, according to NYPA, including public facilities' reluctance to sign long-term leases and a realisation that the programme would do little to increase local manufacturing since most of the equipment purchased would come from outside the state.

Meanwhile, legislation to set a state goal of developing between 2.5 GW and 5 GW of solar was again pending at the time of writing. And again its fate was uncertain as lawmakers instead focused on other issues, trying to finish up their work before the session's culmination in late June.

Industry observers are carefully watching New York because the stakes, they say, go beyond the state and could have repercussions for the larger Northeast, a region that is a prize for solar developers because of its large electricity demand and high prices. 'In the aggregate when you look at the Northeast, it is shaping up to be a very sizeable, very robust market,' said Zalcman. 'New York has 35,000 MW peak. So it is a very big and diverse energy market and tends to be a regional leader. As goes New York, so goes much of the rest of the region.'


A Solar Island Apart

While much of New York has been slow to develop large-scale solar, Long Island is an exception. At the state's southern border off of New York City, the island is home to the East Coast's largest solar array, the 32 MW Long Island Solar Farm.

The project emerged from a solicitation issued by the Long Island Power Authority (LIPA), which resulted in two separate awards, one to BP Solar and the other to enXco, an affiliate of EDF Energies Nouvelles. BP pursued the solar farm, while enXco built a 17 MW carport solar project. In both cases, LIPA bought the capacity, energy and associated renewable energy credits.

BP built the solar farm at the Brookhaven National Laboratory solar farm in conjunction with the US Department of Energy (DOE), installing 164,312 crystalline solar photovoltaic modules within the smallest footprint of an array of its size in the nation. Owned in part by Met Life, the project began delivering power in November 2011, and won Renewable Energy World's Readers Choice Award in 2012.

The solar farm is also being used by Brookhaven to study the hour-by-hour or even minute-by-minute microclimate effects of solar in the Northeast, an effort expected to further our understanding of grid reliability and integration of intermittent resources. The DOE facility employees more than 3000 scientists, engineers and staff, and hosts about 4000 guest researchers annually.

LIPA estimates it will pay $298 million for power from the solar farm (including interconnection costs) under its 20-year power purchase agreement, amounting to about 60 cents/month for the typical residential customer. LIPA officials envision the solar power providing price stability over the years to offset fossil fuel volatility.

Meanwhile, the enXco carport project, known as the Eastern Long Island Solar Project, remained under construction in the spring 2012 on 18 ha. enXco, which diversified from wind to add solar to its business in 2008, is installing 60,000 Suntech grid-connected modules largely in car parking lots on government-owned property. Seven sites will host the panels, and collect lease revenue.

'It is a great use of what is otherwise a parking lot to produce power,' said Hervey. Both the enXco Solar Carport and BP Solar Farm show the advantages of public-private partnerships to develop solar, said Hervey.

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