In September 2017, the New York State Public Service Commission announced plans to fairly compensate solar power and energy storage and reduce community solar development costs.


John Rhodes, chairman, New York State Public Service Commission: “The new compensation mechanism will spur the development of solar power, energy storage.”

Expanding access to cost-effective, clean energy is a main aim of New York’s Clean Energy Standard, which will create enough renewable energy to meet half of the state’s electricity needs by 2030, according to commission chair John Rhodes.

“The new compensation mechanism will spur the development of solar power, energy storage and other localized forms of electric generation,” he said.

The new Value of Distributed Energy Resources (VDER) compensation system moves beyond net energy metering, which has facilitated the growth in distributed solar PV across much of the US.

The VDER mechanism will be more accurate in determining the values that these systems bring to the grid and society. The mechanism will include locational and environmental benefits.

Rhodes said distributed energy resources (DER) offer value to the electric grid, but until now developers have not been paid an accurate price for the electricity generated by solar projects and other forms of DER, such as solar-plus-storage.

To ensure a smooth transition to the new value-based compensation model, solar PV and other distributed energy systems installed before March 9 2017 will continue to remain on net energy metering compensations.

Homeowners and small commercial customers that install solar or other small, distributed systems between March 9 2017 and January 1, 2020, will be compensated through net energy metering for a period of 20 years.

All other systems installed after March 9 2017 will be placed onto the new VDER compensation system after the utilities file final calculations and tariffs, which will take effect November 1 2017.

The commission also took the next steps towards expanding the size of solar projects, from a maximum of 2MW to 5MW to help lower development costs and increase the competitiveness of the emerging community solar market.

The implementation plan also establishes the first compensation values for energy storage systems when those systems are combined with eligible forms of DER.

The order also requires utilities to work with the state to integrate storage into the electric grid.