Long Island’s solar industry got a boost from LIPA Wednesday and expects another from Washington, as the utility lifted a local cap on specially metered solar installations, and Congress prepared to extend a key solar federal tax credit.
The LIPA board of trustees voted to temporarily remove the limit on net-metered energy it purchases from homes, businesses, municipalities and schools while the state examines a new “mechanism to compensate” customers for the energy.
LIPA and PSEG Long Island had been approaching a previous cap of three percent of the energy produced by net-metered green-power installations. The board previously had discussed doubling the cap to six percent, in line with the rest of the state.
But the PSC, noting that another state utility was nearing the six percent cap, earlier this year decided to lift the limit entirely until deliberations on the compensation mechanism for net metering end sometime next year.
Customers with net meters can “bank” excess energy when they produce more power from their solar or wind systems than their homes or businesses can use.
Banking net-metered energy by selling it to the grid allows customers to draw from the LIPA grid against their banked excess energy at night or when their systems aren’t producing.
Solar installers applauded LIPA’s move, but noted system capacity still could limit the number of new solar installations.
The LIPA system limits distributed energy at substations on Long Island to 10 megawatts. But in some areas, particularly around Riverhead, large new solar arrays have been gobbling up that capacity.
“The fact that they lifted the cap is good. However, you still have this infrastructure problem, particularly out east, where they don’t have the capacity to handle some of these big solar installations,” said Kevin MacLeod, owner of KPS Solar in Bay Shore.
The three percent cap limited LIPA to purchasing 153 megawatts of power from net meters, based on a formula that used the utility’s 2005 peak load of 5,116 megawatts. Going to six percent would allow LIPA to purchase 307 megawatts. A megawatt of solar energy powers about 155 homes.
Also this week, Congress reached a budget agreement that would extend the current 30 percent federal tax credit for solar installations for five years. The credit was set to expire at the end of 2016, and local installers and homeowners have been scrambling to get their systems in place before the end of next year to qualify.
Under the agreement, which is expected to be voted on as part of the omnibus budget bill Friday, the credit would remain at 30 percent for three years starting in 2017, then phase down for the next two.
Jennifer DiSiena, a spokeswoman for Rep. Lee Zeldin (R-Shirley), said the Congressman expects the bill with the credits to pass.
“The PATH Act permits solar power companies to claim federal tax credits at 30 percent of the price of a solar array,” said DiSiena, adding that the legislation “is expected to pass the U.S. Senate and be signed by the President.”
MacLeod said the industry has been anxiously awaiting the extension.
“It takes the pressure off the business,” he said. “Now I don’t have to worry about the cliff coming next year.”