New York Considers Net Metering Changes to Lower Cost Shift to Non-Solar Customers
The New York State Department of Public Service issued a report that recommends improvements to residential net metering to support continued growth of the state’s solar industry while ensuring fairness for all ratepayers by enhancing the accuracy of price signals and lowering the subsidies that are not directly tied to environmental values, according to a Dec. 9 news release. The proposal would move the market towards cost-reflective rates while preserving net metering, with a modest charge to collect public benefit funds that are otherwise avoided by using the program. As solar becomes a mainstream element of the power generation sector, traditional net metering, applied at the current default rates, will become unsustainable, the report said. This would fail to send the proper signals for optimal solar deployment and may raise the rates for non-participating customers.
Net metering has helped incentivize solar adoption, along with other programs such as NY-Sun, a $1 billion initiative to expand solar capacity through the strategic use of public funds to build a self-sustaining market. The compensation program was initially designed to support the industry that had little market share. The report said that analysis performed in the Value of Distributed Energy Resources working group identified cost shifts from onsite solar adopters using net metering to non-adopters of $3.00/kW to $7.00/kW per month depending on utility and customer class.
As mass-market solar customers grow, the cost of maintaining the grid, such as cyber-security and safety initiatives, would rise, resulting in higher utility rates and impacting other customers. Customers under traditional net metering with current default rates shift the cost burden to non-solar customers. These customers also contribute less than non-solar customers to public benefit programs, such as utility energy efficiency initiatives, the Clean Energy Standard, and utility-low income programs despite receiving benefits from these programs.
New York installed 884 megawatts of solar generating capacity through June 30, with an additional 970 megawatts in the pipeline under the NY Sun program. Democratic Governor Andrew Cuomo’s Green New Deal advanced the next phase of the program, expanding the NY-Sun goal of 3 gigawatts of distributed solar by 2023, to 6 gigawatts by 2025.
The changes will apply to mass market rooftop solar installed after Jan. 1, 2021. The report also requested an extension of the effective date of any net metering changes to Jan. 1, 2021 to provide certainty for customers and developers, while the Public Service Commission considers the options in the report.