Solar-rebate program to get more state funds

Refound money will help extend by several months a wildly popular solar-rebate program that is fast running short of funds, a state official said.

On Friday, NY-Sun, Gov. Andrew M. Cuomo's state solar program, announced it would replenish the Long Island solar residential rebate program with $3.8 million in money previously earmarked for the program.

The program, which is administered by PSEG Long Island, is quickly running out of money as the number of home solar installations on Long Island skyrockets to more than 11,600 this year (most of those systems didn't receive a rebate) -- more than the past eight years combined. The rebate program was initially funded with $40 million in state money. As of October, it was down to the final $1.3 million.

The $3.8 million reprieve comes from home solar projects that had been earmarked in the Long Island residential block program, but were canceled by customers or otherwise withdrawn.

The move returns about 18 megawatts of solar projects to the fund, to be rebated at 20 cents a watt, the state said. That could add another three to four months to the Long Island rebate program, which could end by the first quarter of 2016.

David Sandbank, director of NY-Sun, dismissed the notion that an ultimate end to the rebate program would dampen the bustling Long Island solar market. Rather, he said, long-term subsidies can lead to instability in the market, particularly on Long Island, where the market is mature, but where rebate dollars have previously run out.

"If any New York solar market is ready to sustain itself, it's Long Island," Sandbank said.

Going forward, rather than directly subsidize the Long Island market through rebates, he said, "New York State is reducing overall costs of solar by, among other things, eliminating red tape."

As reported last week, the state is also raising interest rates for higher-income earners for state-backed loans for solar and energy efficiency work. Starting next February, all but low- to moderate-income residents will see rates jump for new projects to 4.99 percent and 5.99 percent from a current low of 3.49 percent, depending on income level. In April, they will rise again, to 7.99 and 9.99 percent.

Changes in the state programs come as the federal government's 30 percent investment tax credit on home solar installations is also scheduled to expire at the end of 2016. That credit can cut the cost of a system by more than $10,000 for systems that cost more than $35,000.

Kevin MacLeod, a solar installer at KPS Solar in Bay Shore, said the state's moves are ill-timed.

The refound $3.8 million is "good news short-term, but it is a temporary fix to a more serious problem," he said. "The industry could be in for a serious blow if the federal [credit] is allowed to expire, coupled with no state rebates and no or severe limitations to the loan program."

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

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