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State eyes new charge for home solar systems starting in 2021

Homeowners who install solar panels would face a

Homeowners who install solar panels would face a new fee of $3 to $10 per month to help pay for grid upgrades and green-energy programs, under a state-proposed plan. Credit: Chris Ware

Homeowners who install solar panels starting in 2021 would face a new monthly charge to help pay for grid upgrades and green-energy programs, under a plan proposed by the state Department of Public Service.

The charge, which could range from $3 to $10 or more a month, would not apply to existing solar customers whose systems are installed before Jan. 1, 2021.

The state Public Service Commission will take public input on the proposal, contained in a report issued Monday, in coming months and vote on it before year’s end. The Long Island Power Authority, which is not directly subject to PSC jurisdiction, nevertheless is "expected" to "implement changes" in "alignment" with its policy, the department said in a statement.

Under the new so-called customer benefit contribution charge, homes and small businesses that install the panels would pay the monthly fee determined by the size of their systems — the larger the system, the bigger the fee. The PSC said the fee could be anywhere from 69 cents to $1.09 per kilowatt — meaning that a 8 kilowatt system would pay around $8.72 a month.

The plan would leave in place a popular scheme called net metering, which compensates solar-system owners for the energy they sell back to the grid at the same price they buy their energy. On Long Island, it's around 20 cents a kilowatt hour. Net metering allows users to "bank" excess energy and record the excess in special net meters, allowing them to take back the power when needed at night or on cloudy days when solar systems aren't producing.

Assemb. Steve Englebright (D-Setauket), chairman of the environmental conservation committee and sponsor of the original net-metering bill, called the addition of any charges on solar customers "inconsistent" with the state's goal of deriving 100% of its energy from renewable resources by 2040. 

"This is very backward and very destructive," Englebright said Tuesday of the state's plan. "We should be encouraging solar, not adding disincentives. I'm not sure why they are doing it. It is certainly inconsistent with state policy objectives and the need to move aggressively toward solar and wind and other renewables."

The Department of Public Service, in a statement released with the report, said the new benefit charge and any future schemes that would improve the way solar customers contribute to grid costs and programs are needed to more fairly balance the interests of ratepayers, including those who can't access solar. Around 44,000 of LIPA's 1.1 million customers have solar panels, far more than any region of the state.

“As large numbers of mass-market customers deploy solar and receive the benefits of net metering, the price impact on other customers increases as the cost of maintaining the electric grid … must be covered by utility rates,” the Department of Public Service said. Under the current net metering scheme, solar customers “reduce contributions to these costs, shifting the burden to nonsolar customers.”

Further, the agency said, current solar customers pay in “significantly less” to efficiency programs, the clean energy fund and the state’s Clean Energy Standard. Many solar customers pay only a $12 monthly service fee, and can bank excess credits to even offset some of those fees over the course of a year.

David Schieren, chief executive of Empower Solar, an Island Park installer of solar and battery systems, took issue with the new “benefit” charge.

“I do not think any tax should be placed on solar customers unless the utilities do the hard work of modernizing rate structures for all customers that reflect market prices and can therefore leverage market forces to accelerated deployments of solar, batteries and smart home and building technologies,” he said. “This is the smart and strategic approach.” 

Arthur Perri, chairman of the Long Island Solar Energy Industry Association, a group of local installers, marketers and suppliers, applauded the state’s decision not to implement a widely criticized pricing scheme called the value of distributed energy resources, or VDER, for the mass market, at least for now. That complex scheme, he said, would have confounded customers in the mass market.

The state order “is not in its final stage by any measure,” Perri said, “but we think it’s tilting in the right direction.”

LIPA and PSEG Long Island were parties to the review that devised the new pricing models for solar, a spokesman said, and plan to review the latest state report. Any changes LIPA proposes would be subject to public hearings and review by the LIPA board of trustees.

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