Despite the growing popularity of solar power, the one thing that still casts a long shadow over the technology, and keeps everyone from installing a new photovoltaic (PV) system on their rooftop, is the high upfront cost. Recognizing this barrier, incentives are the norm.
New York has adopted a generous package of incentives designed to power more homes and businesses by the sun. Earlier this year, Gov. Andrew Cuomo launched the NY-Sun Initiative to double the amount of customer-sited solar power installed annually in the state and quadruple that amount by 2013.
One package in particular is destined to generate some buzz. The New York State Energy Research and Development Authority (NYSERDA) is making $30 million available for each of two related program opportunity notices that will provide performance-based incentives for solar installations in New York City, the Hudson Valley and Westchester County. Under these two programs, owners are paid a predetermined price for every kilowatt-hour produced and can be used to recoup up to 50 percent of the total system cost in three years.
The programs offer several benefits. For ratepayers and utilities, they offer a cost-effective way to use public funds to drive solar installations. For business owners, these incentives could potentially generate more than a 20 percent return on the investment in a new PV system in just three years, if combined with the energy savings and the 30 percent federal tax credit. Finally, for installers, the incentives make power purchase agreements (PPAs) more attractive. PPAs involve a third-party company that actually pays for the installation and sells the power back to the customer at a reduced rate.
According to the NYSERDA, the governor’s goal of doubling the capacity of installed customer-sited solar capacity from 2011 to 2012 and quadrupling that amount in 2013 represents a 300 percent growth in annual installed customer-sited capacity in New York state over the course of two years.