Governor Cuomo Announces Nearly $1 Billion Commitment to Long-Term Funding of Solar Energy in New York

New York Governor Andrew Cuomo announced on April 24, 2014, a nearly $1 billion commitment to further expand the state’s solar energy industry by providing long-term funding certainty with the goal of boosting existing businesses and attracting new investments to New York. The $1 billion will be committed to the NY-Sun Initiative, the public-private partnership launched in 2012 to expand the renewable energy market in New York State while working to bring down the costs of the technology and build capability in the State of New York.

“This $1 billion investment underscores New York’s commitment to growing the clean energy economy. By providing long-term funding certainty, the state is attracting private sector investment, creating new economic opportunities and supporting sustainable development,” Gov. Cuomo said in a statement.  

“The NY-Sun Initiate coupled with our determination to modernize the utility industry moves New York to a market-based, decentralized approach in advancing energy policy,” said Richard Kauffman, Chairman of Energy and Finance for New York.

In conjunction with Gov. Cuomo’s announcement, the Public Service Commission (the “PSC”) approved an order to dramatically change the state’s current incentive-based solar programs implemented by the New York State Energy Research and Development Authority. The PSC’s order is intended to create a long-term roadmap to transition from government-sponsored energy programs to market-based sustainable solutions for the solar industry by providing stable funding over a 10-year period.

This will be achieved by transitioning to a “Megawatt Block incentive structure” that allocates MWs to specific regions of the state, breaks those regional MW targets into blocks to which incentives are assigned, and awards incentives based upon the block in effect at the time.

This new structure will provide allocations on a regional basis in three categories: 1) residential photovoltaic projects up to 25 kW; 2) non-residential photovoltaic projects up to 200 kW; and 3) systems in excess of 200 kW. According to the Governor’s statement, each allocation will be based on historic demand, market potential, installed cost per watt and equity. As the blocks are fulfilled, incentives will decline at the rate the market will bear, with the hope to enable the market to grow at its own pace.

According to the Governor’s statement, “[t]he MW Block approach provides certainty and transparency regarding incentive levels to the industry, accounts for regional market differences, provides a clear signal to industry that New York intends to eliminate cash incentives in a reasonable timeframe and allows for the elimination of those incentives sooner in regions where market conditions can support it, based on market penetration, demand and payback.”

To find out more about the NY-Sun Initiative, click on the link here.