Net metering and VDER on Long Island – an Overview and Concise Timeline

WHAT IS BEING PROPOSED AND HOW WILL NET METERING CHANGE FOR SOLAR PANEL CUSTOMERS ON LONG ISLAND?

The proposed changes to net metering on Long Island through a tariff structure called VDER (Value of Distributed Energy Resources) have become a highly debated topic. Over the last few weeks and months, EmPower Solar’s CEO, staff, and many other solar stakeholder groups have become active on proposed changes to net energy metering (NEM) and have been working with solar stakeholders, utilities, and public officials to ensure that any changes to net metering protect solar energy customers, and help not hurt future deployment of renewable energy in our region.

Here is a brief and concise timeline of the VDER history to date.

April 2016

PSEG-LI submitted a response to the NYS Public Service Commission’s (PSC) request for feedback on the future of Long Island net-metering.

March 9 2017

The New York State Public Service Commission adopted the first phase of its transition from NEM to VDER. The main component of this is switching for a net credit for credit system to a “Value Stack” system – which assesses the value of net energy exports to the grid based on 6 different factors including energy, capacity, environmental benefits, avoided demand reduction, locational system relief value, and for certain customers a CDG transition credit.

LIPA was not subject to NYS order.

Read the full NYS order here.

September 8 2017

LIPA opens comment period for Utility 2.0 plan which includes VDER and other changes.

October 2017

LIPA formally introduced their own proposed changes to the current net metering program, following mostly in the footsteps of NYS with the same 6-component value stack. It proposed that Customers currently receiving NEM would not be affected by changes, and grandfathered in. In addition, residential and small commercial customers who add solar (or other DERs) by January 1, 2020 will continue to receive NEM, with minor modifications, for 20 years. Commercial 281 and 285 accounts would change starting January 2 2018.

Read the original proposal here.

Read EmPower Solar’s response to this proposal here.

EmPower felt that the bottom line is that this hurts solar customers by reducing the rate of solar compensation and making the specific rate nearly impossible to predict.

Watch our reaction to that announcement here. An online petition was launched that garnered over 240 signatures.

Specific key concerns included;

• It hurts businesses and puts jobs at risk
• It increases complexity and confusion
• It makes projects hard to finance
• There is insufficient information to model
• It’s new to NYS – we should assess that impact first
• Pricing energy production is inherently disconnected from consumption where there is no dynamic pricing

November 2017

• Public hearings were held on 11/27/17 in Suffolk and Nassau on proposed changes
• Over two dozen stakeholders show up to hearings to unanimously oppose proposed changes
• Stakeholder groups submit a letter of opposition to the proposed changes.Read the original letter here.

December 2017

After much public testimony, conversations, and coordination between the utility and the solar energy industry, LIPA modified the original proposal to address recommendations proposed by stakeholders. Read the updated position letter here.

LISEIA and stakeholder partners submitted an amendment to original letter outlining appreciation for accepting feedback and offered support for several changes to the originally proposed tariff.

Key changes from the first to the second include:

• Establishment of a technical advisory committee consisting of stakeholders to be involved during roll out and phase in process.
• Delaying implementation for residential projects from Jan 1 2018 to Jan 1 2020.
• Delaying implementation for 281 and 285 (commercial) accounts from anything interconnected by Jan 1 2018 to anything with a completed application by May 1 2018 and completed by Jan 1 2020.
• Provide solar contractors access to client’s hourly energy data to allow for modeling and forecasting future energy load profiles.
• Providing access to the formulas and calculator tool by February 15 2018 to provide adequate time for training and acclimation to the new system before May 1 start date.
• Schedule trainings for solar developers and customers in using the calculator
• Agreeing to have smart meters in place for all 281 and 285 accounts in next two years so that hourly data can be analyzed and used to forecast future energy needs.

December 19, 2017

LISEIA board, stakeholders, and other advocates testify at the LIPA board meeting held in Uniondale. Stakeholders extend appreciation for LIPA’s collaboration, offer recommendations, and provide constructive feedback on concerns. All stakeholders unanimously agree that all parties need to work together and ensure that any changes made to net metering on Long Island does not put renewable energy deployment or solar jobs at risk but rather moves us towards our continued trajectory towards 50% renewables by 2030 using a smarter, dynamic, higher-technology driven valuation method. In the spirit of collaboration towards a common goal, consensus is that this is possible.

LIPA board passes the modified tariff.

While most changes in the tariff affect commercial businesses, the one change to residential projects is as follows;

• Any residential projects installed before 12/31/2017 grandfathered into traditional net metering
• Any residential projects installed between 1/1/2018 and 12/31/2020 get net metering for 20 years with no annual true-up of credits. Credits will be permitted to rollover each month and each year until the 20th anniversary of installation at which time the credit bank will be forfeited and the customer will enter into the Value Stack program.

 

*** Below updates written August 2019

May 2018 – LIPA Adopted their version of the state’s policy and VDER was rolled out on Long Island. In the 8 months following this change, commercial solar applications dropped by 75%

July 2018 – NYS proposed changes to VDER Phase 1 through a draft staff white paper. It included several updates including exempting systems 750kW and under and allowing them to continue under net metering.

December 2018 – The final white paper came out and public comment periods opened. LISEIA proposed to extend the exemption past the end of 2019 and provide a longer runway than 9 months. They also requested that community solar projects under 750kW also be exempted. Comments and letters to the state and to the LIPA Board can be found here, along with LIPA’s response.

Spring 2019 – The state approved most of the suggestions in the white paper and systems under 750kW in size were exempted from being valued under a value stack compensation mechanism. Improvements were also made to other parts of the value stack for systems over 750kW. These systems are not very common on Long Island, so focus was placed on the exemption. Unfortunately, community solar was not included in the exemption, and the exemption stayed through 2019.

July 2019 – LIPA Board voted to accept the same changes / exemptions that the rest of NYS did. Until at least 1/1/2020, systems 750 kW and under will be valued under net metering. According to NYSEIA, while there is still no official update regarding the successor tariff to NEM for the mass market segments (residential and on-site below 750 kW-AC), NYSEIA understands that the earliest such a successor tariff would now be implemented is September 2020, meaning that NEM would almost certainly continue to be in place for this segment on January 1, 2020. NYSEIA is working with DPS and PSC to get official confirmation.

Each region assigns a value for community solar, and Long Island was given a value of 2.25 cents for community solar. After 1/1/2020, community solar projects, no matter the size, will no longer be valued under NEM (as it is today) but will be valued under VDER. Anticipated value is approximately 10 to 11 cents per kWh, but at the time of this writing, the calculator is still not available so final value is unclear. At this anticipated rate, no further community solar projects are expected to be developed.

LISEIA and Long Island Stakeholders continue to engage with LIPA and elected officials to properly value community solar on Long Island to continue deploying solar and providing all Long Islander’s access to clean energy.

Future and Next Steps

To stay involved and subscribe for updates to net metering changes on Long Island and VDER, please email tmcdermott@empower-solar.com