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New York lawmakers, industry group seek to halt "solar tax" on rooftop systems

Solar panels are installed on the roof of

Solar panels are installed on the roof of a home in Nassau County in 2017. Credit: Chris Ware

Local lawmakers and solar companies are turning up the heat on LIPA and the state to reject or at least delay a monthly charge to be levied on homeowners who install rooftop solar systems after Jan. 1.

LIPA has signaled its intent to adopt its own version of the state policy approved this summer that institutes a "customer benefit contribution" for new solar customers aimed at getting them to pay for a menu of utility programs they otherwise might avoid because solar can eliminate most or all of their electric bills.

The new charge would add from $5 to $10 or more a month for average residential solar customers’ bills.

LIPA is not required to adopt the charge, but is holding public hearings starting this month as its board prepares to adopt the charge in December.

LIPA says the amount is small, and argues it’s needed to help fund programs for low-income customers and green-energy technologies such as heat pumps.

The charge also would apply to other forms of home energy alternatives, such as small wind turbines and fuel cells.

Solar companies on Long Island and across the state have blasted the charge as an unnecessary "solar tax" that will produce relatively little new revenue but hurt solar sales just as the state is adopting aggressive new green-energy goals.

At a briefing Wednesday, three state senators said they’d introduce legislation to halt the new charge.

A solar industry association also said it had filed a petition with the state Public Service Commission seeking a delay in rollout of the charge and reconsideration of the charge itself.

Earlier this week, state Sen. Steve Englebright (D-Setauket) sent a letter to LIPA trustees urging them to withdraw LIPA’s proposed version of the tax, which he criticized as "myopic."

Englebright noted that LIPA isn't subject to the state order to adopt the charge.

He also said LIPA’s proposal did not appear to have checks in place for the fund that develops from charge revenues, to ensure it "doesn’t become an unlimited slush fund," subject to unlimited increases over time.

On Wednesday, state senators Jim Gaughran (D-Northport), John Brooks (D-Seaford) and Kevin Thomas (D-Levittown), said they’d draft legislation to overturn the statewide rule.

"Now more than ever, we should be encouraging homeowners to adopt sustainable energy solutions like solar, not penalizing them with an additional monthly charge." Thomas said.

He urged LIPA to reconsider the proposal, "especially as our community recovers from the harsh economic impacts of the COVID-19 pandemic."

David Schieren, President of the New York State Solar Energy Industries Assoc., an industry group, said the group planned to file a legal petition with the PSC seeking delay of the Jan. 1 start of the new charge while the association asks the PSC to reconsider the statewide policy.

Schieren, chief executive of Island-Park based installer EmPower Solar, said the number of people employed in the solar industry across the state — currently more than 10,000 — "would plummet if homeowners are financially penalized by their electric utility simply for making the switch to solar."

Solar customers pay tens of thousands of dollars for their systems, which the group said provide numerous benefits to the local grid, including reduced demand during peak summer seasons.

Solar backers also said adoption of the charge just as solar equipment prices are spiking and federal tax credits are declining, could hurt the state’s goals for green-energy adoption.

"It would appear counterintuitive for regulatory authorities to implement policies that discourage residential solar installation rather than encourage it," said Kyle Strober, executive director of the Association for a Better Long Island, a developer’s group.

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