Expanding NY’s Distributed Solar Beyond 10GW: The Inflation Reduction Act Surplus

March 1, 2024

Article Summary –

The New York Public Service Commission is considering recommendations by the New York State Energy Research and Development Authority (NYSERDA) to use existing NY-Sun Program funding to exceed the state’s current 10-gigawatt solar generation goal. NYSERDA’s report suggests using $75 million of a projected $421 million budget surplus (caused by federal efforts to implement the Inflation Reduction Act of 2022) to cover a NY-Sun budget shortfall and allocate the remaining $346 million towards additional solar capacity. NYSERDA has asked for approval to use the existing budget for expanded solar projects, cover the budget shortfall, include extra funds for projects serving disadvantaged communities, and count certain residential customers towards the capacity requirement for these communities.

The New York Public Service Commission (PSC) is contemplating recommendations to use NY-Sun Program funds for enhancing distributed solar generation beyond its current 10-gigawatt (GW) target. These suggestions were put forth by the New York State Energy Research and Development Authority (NYSERDA).

According to a report released on January 5, 2024, NYSERDA stated that the Inflation Reduction Act of 2022 (IRA) would contribute to a projected $421 million surplus for the NY-Sun Program. Despite this optimism, NYSERDA expressed concerns about market uncertainty due to variable national policies and global economic conditions.

To manage the anticipated budget surplus, NYSERDA proposes allocating $75 million to cover the NY-Sun program’s projected shortfall, assigning an estimated $346 million for additional solar capacity beyond the 10-GW goal.

Several scenarios for this incremental funding were laid out, including boosting the Inclusive Community Solar Adder and enhancing procurement under the Statewide Solar for All schemes. These proposals could increase solar capacity by 557 megawatts (MW) to 1,254 MW.

NYSERDA’s request to the PSC includes authorization for expanding solar deployment beyond the 10-GW target, covering the $75 million shortfall, incorporating surplus funds into the Solar Energy Equity Framework (SEEF), and counting certain residential users towards SEEF’s 40% minimum capacity for disadvantaged communities.

A notice regarding these requests was published in the New York State Register, with comments due by April 29, 2024. Stakeholders are expected to provide feedback on the best use of surplus funds and contingency plans for NY-Sun.