New York Contemplating Feed-In Tariff For Solar Power

The state of New York has been named a national leader of legislation to promote the use of solar energy systems in residential buildings. Homeowners can be rewarded with tax credits, rebates and other benefits. A new homeowner will find these deals especially attractive because the use of solar power pays off wonderfully over the course of decades.

Many New York consumers do not understand all the incentive programs available to them. Choosing the best one and determining eligibility is a time-consuming challenge and they all seem to come with caveats or certain qualification standards. There is a movement afoot in New York to adopt a feed-in tariff which would circumvent all such decision-making and help show a clearer picture of how the customer will save money over the years with a solar power system.

In New York, the Solar Energy Industries Association (SEIA) specified how a statewide feed-in tariff would operate. They propose to the New York State Public Service Commission (PSC) that it should instigate the transformation of current incentives to the performance-based system. They cite the success of the system adopted in Germany. Under a feed-in tariff, eligible renewable energy generators are paid a cost-based price for the renewable electricity they produce.

If New York adopted a solar energy feed-in tariff, imitating the one used in Germany, each owner of a photovoltaic grid would be guaranteed a specific amount of money for the solar power sold back to the existing electric power company. The government would guarantee the amount to be paid for each kW.

In just a few years, Germany has been the beneficiary of 3,000 megawatts of PV power installed. Solar PV system owners see a clear benefit to themselves from the start. They receive a lucrative payout for all the power produced by their system. Consumers in New York should see the value immediately as did the consumers in Germany.

Unlike programs in which the amount of the payoff is uncertain, the feed-in tariff with a price guarantee is very attractive. New York may do well by deciding to replace rebates, such as the Long Island Power Authority (LIPA) PV Rebate Program, with a feed-in tariff program that assures a specific amount of reimbursement on a per-watt basis.

That type of program may be separate from a grant-awarding program such as the one offered by New York State Energy Research and Development Authority (NYSERDA). NYSERDA provides a cash incentive of $1.75 per watt to eligible installers for the installation of approved, grid-connected solar PV systems. The maximum capacity supported by the program is 7 kilowatts (kW) for residential systems; 50 kW for non-residential systems; and 25 kW for non-profits, schools and municipalities.

New York also offers tax credits to state residents for buying a home PV system 10kW size or smaller. The installations can be photovoltaic panel systems, a solar water heater or solar space heating. The amount of the credits can be any amount up to $5,000.