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State grants SolarCity an expanded role in K-Solar program

SolarCity employees install a solar panel on a

SolarCity employees install a solar panel on a home in south Denver. New York State has allowed the company to bring solar energy to as many as 65 Long Island school districts. Credit: AP / Ed Andrieski

New York State has granted SolarCity Inc. the right to bring solar energy to as many as 65 Long Island school districts, and as elsewhere in the state, following the bankruptcy last month of another state-designated developer, Sun Edison.

Last year, the New York State Power Authority designated both Sun Edison and SolarCity as preferred vendors for the state program, known as K-Solar, which provides state subsidies to put solar panels on public-school rooftops and grounds.

The new program offers schools free advisory services, solar assessments and technical support subsidized by the state, while allowing districts to skip a state Education Department mandate to use competitive bidding for such work — so long as schools use preferred K-Solar vendors.

Schools enter into contracts to get discounted energy for the systems, but don’t pay any of the upfront costs. About 315 of the state’s roughtly 700 school districts have registered, including about half of Long Island’s 124 districts, NYPA spokesman Steve Gosset said.

The schools don’t own the panels, but enter into power purchase agreements to get electricity that is guaranteed to be cheaper than from a utility. When the contract is up, schools can renew their contract, buy the systems or have SolarCity remove them.

When NYPA awarded the contracts to SolarCity and SunEdison, it essentially divided the state in half, with Sun Edison getting western and central New York, and Long Island, while SolarCity got the rest of the state, including New York City.

But with Sun Edison’s bankruptcy filing last month, NYPA made a decision to shift its territories to SolarCity. At the same time, NYPA, which is administering the program with the New York State Energy Research and Development Authority, is contemplating issuing a new bid request for the program that could result in a second solar developer for K-Solar. SolarCity will still continue to offer systems throughout the state, NYPA said.

A state-subsidized $750 million solar panel manufacturing plant for SolarCity is the central project in Gov. Andrew M. Cuomo’s Buffalo Billion development initiative. U.S. Attorney Preet Bharara is investigating possible improper lobbying and conflicts of interest in state contracts involving the Buffalo Billion. SolarCity, NYPA, NYSERDA and the state Education Department are among two dozen entities and individuals subpoenaed in the probe. The state is also investigating.

SolarCity has said it is not a target of the probe but declined to say what information it’s been asked to provide. NYPA said the agency does not comment on “ongoing investigations.”

For SolarCity, the status of designated vendor for the K-Solar contract throughout the state could be potentially lucrative and put crews to work. That would help the company’s goal of employing thousands of workers as part of its agreement with the state for the solar factory, which is scheduled to begin production next year.

One local developer who has put systems on more than a dozen Long Island schools estimated the program could produce revenue in the hundreds of millions of dollars. Developers can profit through tax credits and rebates, high volume sales and a small premium on energy charges.

Mike Bailis, co-founder of SUNation Solar Systems in Ronkonkoma, said schools should work with developers to find grants and rebates to allow them to own their own solar systems. When the system is paid for, the schools get the energy free, he said.

“It’s a little unfair,” Bailis said, “that my tax dollars are going to help a competitor build a factory in Buffalo, much less help them” install systems at schools.

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