In a 274 page document that covers everything from Community Distributed Generation (CDG also known as community solar) to energy storage (batteries) to Net Energy Metering (NEM), the long awaited PSC ruling arrived on March 9th. The big news for Commercial Solar: New York will be gradually transitioning away from Net Energy Metering (NEM), especially for CDG. No need to panic, though, as the off ramp from NEM is fairly smooth and well marked. Projects that will first make the transition appear to be CDG in Orange & Rockland and Central Hudson territories, as these utilities will allocate less than 100MW to fully net metered CDG. What does this mean, and why is it so important for CDG? As discussed previously (see FAQ: What is Net Metering) CDG projects produce electricity that is valued at the same rate as the customers who sign up for it are paying. Under the new ruling, once the allocated MW are used up in each utility, new CDG projects will produce electricity at the Value of Distributed Energy (VoDER) instead. So what is the VoDER, and will it be higher or lower than the NEM rates? The answer, to use another acronym, is TBD (to be determined), but at least now we know what the components of that calculation will be. And this is where real progress has been made by the PSC, progress that will define the future path of renewable energy in New York. The PSC deserves credit for the difficult policy making work that they have done. By shifting the path for solar toward VoDER, the PSC has essentially reminded us that the future value of solar energy will not be permanently staked to existing rate payer tariffs, and will instead be based on where solar does the most good as measured by the needs of both the utility grid as a whole and the individual customers in that grid. This is a tricky balancing act to pull off, part of the reason why a lot of the details still remain to be worked out, but this much has been made clear–going forward the value of solar will take into account not only the needs of the utility to reduce congestion on the grid, but also the actual hourly Day Ahead prices for electricity produced otherwise as well as the environmental value represented by Tier 1 RECs. Is this a good thing or a bad thing? Of course the answer depends on whose perspective you adopt. But to the extent that:
–Utilities will no longer be able to claim that solar installations cost them gobs of money
–Rate Payers (who either can’t participate directly by installing their own solar, or choose not to buy solar power provided by a CDG project) will be shielded by a limit on future rate increases caused by the spread of solar
–Municipalities will be able to more cost effectively increase electric grid resiliency now that energy storage systems will be included in the VoDER calculations
–Commercial Solar developers will be able to calculate the value of their future assets
it appears as though New York can truthfully claim to be pioneering an equitable path toward a future energy system that addresses the needs of all of the stake holders (everyone who uses electricity in the State) as well as those of us who are trying to increase the amount of that power made by using the rays of the sun. So maybe, despite the eventual decoupling from NEM, there’s a silver lining in there for all of us.