Expanding Distributed Solar Beyond 10 Gigawatts: Understanding New York’s Inflation Reduction Act Surplus | Foley Hoag LLP – Energy & Climate Counsel



The New York Public Service Commission (PSC) is examining proposals by the New York State Energy Research and Development Authority (NYSERDA) to expand the NY-Sun Program beyond its current 10 gigawatt goal using existing funding. NYSERDA’s report suggests that the surplus of $421 million, expected due to the Inflation Reduction Act of 2022, could be used to fill the projected $75 million shortfall in the NY-Sun budget. The surplus could also fund additional solar capacity beyond the current goal, with scenarios ranging from 557 to 1,254 megawatts, and help target community solar projects that serve disadvantaged communities.

New York Public Service Commission Reviews NYSERDA’s Solar Energy Proposals

The New York Public Service Commission (“PSC”) is reviewing recommendations from the New York State Energy Research and Development Authority (“NYSERDA”) about using existing NY-Sun Program funds to extend distributed solar generation beyond the state’s current 10-gigawatt (“GW”) target.

In a January 5, 2024 report, NYSERDA reported an anticipated $421 million surplus for the NY-Sun Program due to federal efforts implementing the Inflation Reduction Act of 2022 (“IRA”). However, NYSERDA expressed concerns about the potential volatility of the solar market and the broader economic landscape.

From this surplus, NYSERDA suggested approximately $75 million be used to address a predicted NY-Sun budget shortfall. The remaining estimated $346 million would be allocated towards extra solar capacity beyond the 10-GW target.

Various scenarios were evaluated for deploying these additional funds, including expanding community solar projects and increasing procurement under opt-out statewide Solar for All programs. The expected additional solar capacity could range between 557 megawatts (“MW”) to 1,254 MW.

NYSERDA has sought PSC approval to use the NY-Sun budget for extended solar deployment and to cover the $75 million shortfall. It also proposed to include extra funds within the Solar Energy Equity Framework (“SEEF”) to target community solar projects in disadvantaged areas, and to count certain residential customers within the SEEF’s 40% minimum capacity requirement.

Notice of these proposals was published in the New York State Register, with comments due by April 29, 2024. Stakeholders are expected to comment on the most cost-effective use of the surplus and any contingency plans for the NY-Sun Program should the surplus not materialize.

A PSC ruling on this issue is expected around July or August, with any NY-Sun program updates anticipated before the end of 2024.

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