LIPA to vote on tweaks to its solar programs, but installers still unhappy

LIPA trustees on Wednesday will vote on a package of solar energy and related changes to the utility’s rules that will, among other things, exempt certain commercial solar projects from a pricing plan devised by the state that many said has hurt their businesses.

The so-called Value of Distributed Energy Resources pricing system for big solar projects added a level of complexity and unpredictability that solar installers say affected sales of solar systems to big corporate users on Long Island. The state Public Service Commission, which approved and mandated VDER for the rest of the state, has since rescinded the mandate for somewhat smaller commercial systems of up to 750 kilowatts.

LIPA trustees are expected, at the urging of solar companies, to approve the same rollback next week. That means commercial systems under 750  kilowatts would be eligible for the popular net-metering pricing program, which gives producers full credit for the power they produce and bank for times the sun isn’t producing. For companies, savings in energy can pay for the systems in a matter of years.

LIPA trustees also plan to expand the VDER pricing to a program known as community distributed generation, or more commonly "community solar," which allows LIPA customers to buy cheaper solar energy from big solar-system owners even though the customers don’t have solar on their own roofs. That implementation, scheduled to take effect in January, had been telegraphed two years ago, LIPA said, noting that other utilities already across the state have implemented VDER for community solar.

Still, big solar developers such as SUNation Solar Systems and CED GreenTech, both of Ronkonkoma, aren’t happy. "To me, it's counter to the governor's agenda," said Arthur Perri, president of the Long Island Solar Energy Industry Association and principal of installer CED GreenTech, referring to Gov. Andrew M. Cuomo's aggressive agenda for pushing renewable energy.

Top local installers have been selling community solar projects to companies with large rooftops as a way to generate revenue for the hosts and offer discounted power to a ready list of subscribers for the energy, which can cost from 10 percent to 20 percent lower than LIPA power.

But under VDER, LIPA will likely pay the system owners 3 or 4 cents less for the power than it currently pays, making the systems less viable for businesses to operate them, solar installers say.

“We’re just starting to get traction on community solar, and this will kill it,” said Scott Maskin, chief executive of SUNation, who said the difference between the LIPA-paid cost and the VDER cost will mean a much longer payback for solar system hosts. “They just don’t pencil out,” he said of the return on investment for businesses.

Tom Falcone, chief executive of LIPA, said solar companies have had two years to prepare for the coming change to VDER for community solar, and he noted that LIPA has delayed other aspects of the program to give them a longer lead time to adjust.

He also said that if projects such as those under the new VDER program for community solar aren’t feasible, perhaps they shouldn’t be built.

“At the end of the day there are lots and lots of options for us to get clean power,” Falcone said, noting Cuomo’s recent offshore wind procurement and other solar programs. “Our customers care about procuring clean energy, and we’ll procure it to meet our goals. It doesn’t mean every project’s a winner. We do have an obligation to pick projects that are the least cost to customers.”

Perri said that higher overall costs on Long Island ought to lead LIPA to be finding more ways to make programs such as community solar successful, not to limit them.

Maskin acknowledged that Long Island has had advance notice of the changes to community solar, but he said the likelihood of the market declining when it’s implemented doesn’t jibe with the state’s aggressive stance on green energy and the need to be all renewable by 2040 and beyond. “I’m fit to be tied over VDER moving into community solar,” he said.

Falcone argued that the change to VDER for community solar elsewhere in the state has not resulted in a decline in the number of installations. “If you have a good project, you should be able to make it work,” he said, noting that similar dire projections were made when VDER was introduced for commercial systems overall.

“We didn’t see much of a decline in actual volumes on Long Island,” he said. “I’ve heard people say it [would decline], but in the actual data, there wasn’t a big difference.”

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.