On May 31, 2022, the New York State Energy Research and Development Authority (NYSERDA) submitted to the New York State Public Service Commission (PSC) its proposed NY-Sun Operating Plan (Operating Plan) in PSC Docket 21-E-0629. The Operating Plan provides funding and incentive details on the recently announced NY-Sun expansion (Expansion Program), which aims to deploy 10 gigawatts (GW) of distributed solar capacity statewide by 2030.
The Expansion Program’s main tool for deploying additional solar capacity is the megawatt (MW) block incentive program. The Expansion Program will maintain the structure of the existing MW block incentive program and will continue to segment the utility service market into three separate regions: the Con Edison Region, the Upstate Region, and the Long Island Region. The program further segments the market into three sectors based on system size, measured in direct current (DC): residential, nonresidential, and commercial/industrial.
Taken together, the Expansion Program seeks to incentivize 3,393 MW of new solar capacity across the state. The vast majority of new incentives are available for commercial/industrial projects in the Upstate Region. The total allocation by region is as follows:
- Upstate commercial/industrial projects – 2,943 MW
- Con Edison residential – 150 MW
- Con Edison non-residential – 300 MW
The Operating Plan also clarifies prevailing wage requirements for new NY-Sun projects. For solar projects 1 MW alternating current (AC) and greater in capacity, NY-Sun eligibility is now conditioned on developers paying prevailing wage or entering into labor agreements for construction activities. This requirement only applies to projects that submit their initial utility interconnection application after April 14, 2022. A prevailing wage adder is available for these eligible projects, with varying rates by region and project:
- Upstate commercial/industrial – $0.125 per watt DC
- Con Edison non-residential – $0.20 per watt DC
The expanded MW block program will be deployed in segmented blocks on a first come, first served basis. However, if more than 800 MW of Upstate commercial/industrial applications are submitted in the first 14 calendar days of the Expansion Program’s launch (June 7–20), projects will be prioritized by date of 100 percent utility upgrade payment, and then by date of 25 percent utility upgrade payment. The first 800 MW will be placed into Block 18, and the remainder will be placed in Block 19 or later blocks.
The Expansion Program will go live on Tuesday, June 7, 2022. In guidance documents, NYSERDA has indicated that new project applications should not be submitted before that date, but that NY-Sun applicants can create a new application and hold it in “unsubmitted” status until then.
Barclay Damon’s Regulatory Practice Area attorneys are ready to assist developers with navigating the application process and will continue to monitor the NY-Sun Expansion Program and other regulatory updates that affect the renewable energy industry.
If you have any questions regarding the content of this alert, please contact Brenda Colella, Regulatory Practice Group Leader and Regulatory Practice Area co-chair, at bcolella@barclaydamon.com; Dan Krzykowski, associate, at dkrzykowski@barclaydamon.com; or another member of the firm’s Regulatory Practice Area.