Yesterday New York Governor Cuomo outlined his priorities for the year ahead in his State of the State address. Among his top initiatives for a building a better New York? More solar!
Touting the state’s successful development of other renewable resources, Cuomo remarked that,
“Now it is time to focus more attention on exploiting our solar potential.”
With rising electricity needs, plenty of sunshine, and a local workforce primed for solar jobs, that potential is tremendous indeed. To harness it, the Governor suggests increasing large, commercial solar projects while also supporting small and medium residential and commercial systems. With an emphasis on much needed job growth, Cuomo has set his sights on quadrupling NY solar capacity by 2013 and beyond. And along with those leaders from the business community, environmental advocates and organized labor, Vote Solar stood up and applauded the Governor’s solar vision.
The Governor’s proposal directly in line with the early years of the solar growth path included as part of last year’s New York Power Act. Passed by the legislature and signed by Cuomo himself, that legislation included a cost-benefit study for a more aggressive 5,000 megawatts of solar. (The results of that study are due out later this month, so stay tuned).
The New York Solar Jobs Act would make good on that promise, providing the necessary blueprint for 5,000 MW of solar development of all sized by 2026. In doing so it would stimulate immediate investment in solar jobs and infrastructure and lay the foundation for long-term solar leadership. Building a solar market that is comprehensive, robust and stable will mean quality jobs, clean air, reliable electricity and a bright economic future for generations of New Yorkers.
First the 5,000 MW study. Now the State of the State. It’s clear that New York plans to make a solar move in 2012. Let’s make that move worthy of the Empire State.
[...] Vote Solar Initiative reports, “Yesterday New York Governor Cuomo outlined his priorities for the year ahead in [...]
In the State of the State, Gov. Cuomo mentioned increasing rebates for small commercial and residential PV installations. A disadvantage of a solar rebate as compared to a system based on SREC’s or a feed-in tariff is that a rebate system lowers the federal tax dollars that are returned to the solar customer and therefore, the local and state economy.The rebate must be subtracted from the total cost of the system before calculating the 30% federal tax credit.
Money returned via a FIT or SREC is not subtracted from the total cost when calculating the federal tax credit, hence producing a “bigger bang for the buck.”
EX: If a system costs $50,000. and an FIT or SREC is used to assist the solar customer, $15,000 of Federal Tax Credits are returned to the customer and the local economy. On the other hand, if a $20,000 rebate is used, the Federal Tax Credit is reduced by $6000 and only $9000 is returned to the customer and the NY economy.
New Yorkers pay lots of federal taxes, so why not maximize the amount of federal money returned to the NYS economy by using an incentive system based on SREC’s or a FIT?
I would like to add that yesterday NYSERDA released its NY Solar Study. As part of the study they compare the strengths and limitations of the various incentives. In Table ES-9 they list the strengths and limitations of Standard Offer Upfront Payments. Much to my surprise they ignore the fact that any upfront payment or rebate is effectively reduced by 30% due to the resulting loss of federal tax credits. Upfront payments must be subtracted from the total cost of the PV system before calculating the federal tax credit. SREC’s and feed in tariffs do not have this disadvantage. Money for incentives typically come from the consumers of electricity, does it not make sense to use that money in the most efficient manner by maximizing the federal tax credits ?
If an upfront incentive has a value of $20,000 it reduces the federal tax credit by $6000, effectively reducing the incentive to $14,000. Why would we waste this money ? If the same $20,000 is distributed via a FIT or SRECs its value is not dimished by a loss of the federal tax credit and both the NY State economy and the system owner benefits.
Assemblyman Englebright has sponsored a new Solar Development and Jobs Act-2012. The bill is numbered A9149-2011 and currently has a total of 54 co-sponsors. Hopefully Senator Maziarz and the NY Senate will soon bring forth a matching bill. The bill uses SRECs but effectively has a feed in tariffs for residential systems. The FIT system is simple for a homeowner to use and does not diminish the federal tax credit like a rebate. Will this be the year solar shines in New York ?