New York Community Solar Policy Guide for Asset Owners & Developers

If you're a New York resident or business owner looking to save money with community solar, visit our "Community solar in New York" page.

New York’s Community Solar Program

New York is the single largest market for community solar with two gigawatts (GW) of installed capacity across nearly 1000 projects as of the first quarter of 2024. It was the first and currently only state in the country to achieve 1 GW of deployed community solar capacity. The success of community solar in in New York is owed to a mature and well-structured program design with a successful Utility Consolidated Billing (UCB) option, mostly predictable incentives, and widespread support and involvement from the program administrator and regulators—though like any program, not without its hiccups.

On the heels of the 1 GW achievement came an order from the New York Public Service Commission (PSC) in April 2022 expanding the NY-Sun program. The order authorized nearly $1.5 billion in additional funds to administer and incentivize a total of 10 GW of solar of all types in support of the state’s 70% renewable electricity by 2030 goal, an increase from its previous 6 GW goal.

Since virtual net metering was enabled in 2011, the New York market evolved rapidly with a formal community solar program—called the Community Distributed Generation (CDG) Program—coming online in 2015 by issue of the NY PSC. The New York State Energy Research and Development Authority (NYSERDA) manages the CDG and the Megawatt (MW) Block Incentive program through NY-Sun. The MW Block Incentive program provides a dollar-per-watt incentive for installed capacity as a rebate. The first program, a net metering compensation method, was replaced by the Value of Distributed Energy Resources (VDER) tariff in 2019 which determines the rate at which projects are compensated based on when and where those projects provide energy to the grid. This approach has been lauded for its innovation by the community solar industry and has high visibility in other states as they shift towards community solar.

New York has also prioritized the participation of low-to moderate-income (LMI) subscribers in its community solar program both through specific adders for majority LMI-serving projects and the Solar For All program. After a pause, the Inclusive Community Solar Adder (ICSA) reopened in May 2024 as the primary low-income community solar incentive for developers.

The MW Block Incentive program and its suite of adders, the VDER compensation rate, and now the tax incentives made available via the Inflation Reduction Act, have all made the Empire State the kingpin of community solar.

Program & Project Specifications

Project Requirements

• 5 MW AC maximum project size
• 25-year program length
• 10 subscriber minimum
• At least 60% of the project generation must be made up of mass-market “small” subscribers (non-demand metered subscribers or subscribers with less than 25 kW of annual average demand)
• No single subscriber can take up more than 40% of project capacity
• Minimum subscription size of 1,000 kWh
• Subscriptions cannot exceed 100% of a subscriber’s annual kWh electricity usage
• Subscriptions are not transferable and cannot be ported from one utility territory to another
• Subscribers can only subscribe to one solar farm

Program Details

Incentives are assigned to three regions – New York City, Upstate, and Long Island – and then further divided into blocks with a certain number of MW assigned. Projects are awarded incentives on a dollar-per-watt basis, meaning as the size of the system increases, so does the rebate. Additionally, the incentive per watt is scaled so that smaller projects have a higher per-watt rebate than larger projects, but there is typically a greater overall capacity allocated per block to larger projects in the program.

As each block is filled, the base incentive declines. Incentives are available on a first-come, first-serve basis and are dependent on DC nameplate capacity. Incentives are not awarded until projects achieve an approved status.

As of October 2022, the MW Block Program has run out of funds for the Long Island region, but the program is active in the New York City and Upstate regions. Refer to the ConEd Dashboard and the Upstate Dashboard for the most recent data on block capacity and incentives for those respective regions.

Low-to-Moderate Income Rules

The NY-Sun program has two ways of serving LMI-subscribers: the use of adders, primarily through the Inclusive Community Solar Adder (ICSA) to incentivize LMI-serving projects, and Solar For All. ICSA is intended to provide bill savings to LMI subscribers, affordable housing, and other facilities serving disadvantaged communities like non-profits. Solar For All serves the same subscriber segment except those subscribers enroll with NYSERDA directly. Projects receiving ICSA must ensure LMI subscribers receive a minimum discount of 10% on community solar credits.

• Projects must allocate between 40% and 100% of its project capacity to eligible residential and affordable housing LMI subscribers
• At least 50% of the project’s ICSA capacity must be comprised of residential electric customers

LMI Eligibility Rules

Residential ICSA Eligibility

• Categorical Eligibility: Subscriber eligibility is demonstrated by documented participation in one of the assistance programs listed in the Program Manual.
  • EmPower New York Award Letter
  • HEAP Award Letter
  • HEAP or Energy Utility Assistance listed on the utility bill
  • SNAP Award Letter
  • TANF Award Letter
  • Supplemental Social Security Income Award Letter
• Geo Eligibility: Subscriber eligibility is demonstrated by residence in an Interim Disadvantaged Community (DAC). Use this interactive map to identify areas that meet these interim criteria.
• Affordable Housing Residential Eligibility: All residents of a regulated affordable housing property can be deemed eligible if the property:
  • meets the eligibility requirements of the NY-Sun Multifamily Affordable Housing Adder,
  • residence is limited to LMI households (80% AMI or below),
  • and participation in CDG will not result in any increased cost (e.g., rent or common charge increase) for the residential subscriber due to the utility allowance mechanism or other policies or practices.
• Individual Household Eligibility: Any residential subscriber is considered eligible if they have a documented household income under 80% of Area Median Income (AMI) or 80% of State Median Income (SMI), whichever is higher.

Non-residential ICSA eligibility

• Affordable Housing: Nonresidential demand and non-demand accounts serving an eligible affordable housing property (i.e., building/common area meter).
• Nonprofit/public facilities serving DACs: Accounts serving nonprofit organizations or public facilities that:
  • meet the criteria of small subscribers,
  • and are located within and serve a designated DAC

Compensation Rate, Incentives, & Credit Mechanism

The Value Stack, or VDER, compensates projects based on when and where they provide electricity to the grid and compensation is in the form of bill credits. This is determined by:

The Long Island region also uses the Value Stack but has a few differences. Refer to the NY Sun program page for details.

Each utility files a monthly statement that includes actual monthly ICAP rates, DRV rates, and the current LSRV capacity remaining per substation. Refer to the Value Stack Statements, Data, and Rates section of NYSERDA’s webpage for up to date and historical values for ICAP, DRV, and LSRV Value Stack fields. Use the Solar Value Stack Calculator to estimate project value or see historical values.

Adder Incentives

Prevailing Wage Adder: Developers are required to pay prevailing wages or enter into project labor agreements for construction activities associated with project development and installation. All solar projects that had their initial utility interconnection application submitted after April 14, 2022, and that are greater than 1 MW AC are subject to this requirement and are eligible for this adder.

• Con Edison Nonresidential projects will receive $0.20/W DC
  • Will be paid out in the same manner as the base incentive: 100% payment at project completion.
• Upstate Commercial/Industrial will receive $0.125/W DC
  • Will be paid out in the same manner as the base incentive: 50% at project completion, 25% at first anniversary of completion, and 25% at second anniversary of completion

Community Adder: This adder is available to projects that did not qualify for the Community Credit (CC) or the Market Transition Credit (MTC), the Community Adder’s predecessors. It is available in areas that have fully exhausted their CC tranches. The Community Adder has been fully allocated for the Upstate region and has been paused for the NYC/ConEd region. Refer to the Community Adder Dashboard for updates or new block availability. This incentive is $0.20/Watt.

• Available to nonresidential and commercial/industrial in the ConEdison and Upstate utility territories, respectively
• Projects in the PSEG-Long Island service territory are not eligible for the NY-Sun Community Adder
• An initial block of 800 MW, later expanded to 1,150 MW

Con Edison Rooftop Canopy and Parking Canopy Adder: This adder is available to projects in the Con Edison territory installed on either rooftop (capped at 25 kW per project) or parking canopies to increase siting opportunities in the highly urbanized NYC region. The adder is $0.20/Watt.

Landfill/Brownfield Adder: This incentive is intended to encourage solar development on otherwise undesirable land versus agricultural or other greenfield uses. This adder is available for sites identified as landfill or brownfield by a site registry number from the NYSDEC, EPA, or with attestation from the Authority Having Jurisdiction if unlisted in the site registry.

Projects eligible for this adder may also receive the Community Adder and ICSA. This adder is mutually exclusive to the Multifamily Affordable Housing Incentive. The incentive is $0.15/Watt.

Inclusive Community Solar Adder: This adder is available to projects serving eligible LMI, affordable housing, residents of DACs, and certain nonprofits and public facilities located in and serving DACs.

The update to the ICSA tier where a project did not receive the Community Adder has two components:

• "Fixed incentive" that applies to the full project capacity, set at $0.07/watt
• "Performance incentive" which applies to the capacity dedicated to ICSA-eligible subscribers, set at $0.10 per watt

The fixed incentive is paid in full as part of the first ICSA payment, but the project must meet the minimum ICSA requirements to receive it. Failing to meet the minimum LMI and residential capacity requirements would mean both the performance and fixed parts of the incentive would not be paid out.

The first payment occurs at a project’s PTO and is 50% of the total rebate. The second and third payments occur one and two years after PTO with each payment being 25%, respectively. Payment of the ICSA is based on a project’s actual performance in serving LMI subscribers, with higher payments for projects that successfully allocate a higher percentage of project capacity to eligible subscribers.

During this time, NYSERDA will conduct random audits of projects to ensure subscriber requirements are being met and will allow leeway for projects to return to compliance. NYSERDA may undertake a prorated recapture of the rebate should projects fail to meet the standards of the ICSA.

The adder rates and initial capacity blocks detailed in the table below apply only to the capacity allocated to eligible subscribers.

ICSA Incentive Levels

Community Benefit Projects

This category offers a more enticing, though more elusive, incentive for meeting a higher standard in project design and implementation due to the social value this project would have locally. The incentive’s purpose is intended to meaningfully increase community solar access for DACs and their residents, while also providing a higher savings rate for eligible subscribers. The incentive is $0.30/watt for ConEd projects and between $0.15 and $0.20/watt for Upstate projects depending on the other adders the project has received.

Refer to NYSERDA’s ICSA webpage for more information about incentive levels for Community Benefit Projects or the Program Manual under the Resources for Contractors page.

There are a total five criteria a project may need to meet to qualify as a Community Benefit Project:

1. Demonstrated close partnerships with community organizations and stakeholders from DACs local to the project throughout its development process.
   • This may be demonstrated by a memorandum of understanding, letter, or email from community organizations that can verify and detail their participation in the development process over time. Customer outreach with a community organization alone is insufficient to meet this criterion.
2. Offer workforce training and hiring commitments of Priority Populations or members of the surrounding DACs.
   • Projects can demonstrate this through participation in NYSERDA’s On the Job Training (OJT) Program.
3. Community based or participant ownership models.
4. Dedicated strategy to target individuals in DACs with Limited English Proficiency.
5. Sited within a DAC and serving eligible subscribers in the surrounding community, defined as:
   • For ConEd Projects: within a 1-mile radius of the project site address
   • For Upstate Projects: the same or adjacent census tracts of the project site address

In order to receive this incentive, projects can offer a minimum savings rate of 20% and meet three of the five criteria, or a project can offer a minimum savings rate of 15% and meet all five criteria. Because of the stringent requirements, such as the geographic restrictions on customers, this incentive may only be realistically available to projects with relatively little capacity.

Credit Details

Under the VDER crediting methodology, credits are provided to customers as a monetary credit on their bill. These credits can be used to offset all electricity charges, including fixed costs and taxes, on a customer’s bill. Customers can utilize credits up to the total electricity charges on their monthly bill. Any unused credits rollover indefinitely on the customer’s account until the customer terminates service with the utility or a customer leaves a community solar project. If a customer leaves a project and has a remaining unused credit balance, the credits are returned to the host.

Hosts of community solar projects can bank unallocated credits at their full value for up to two years after which they are lost. During that period, hosts can re-allocate banked credits to new or existing offtakers. Hosts must file an annual report to the PSC detailing the total value of credits reallocated and whether these credits were sent to residential or large-demand customers.

Utility Consolidated Billing Option & Multiple Savings Rates

In 2019, the state mandated the Joint Utilities to provide a consolidated billing option for all CDG projects using a net crediting methodology. Since 2020 the joint utilities have offered UCB for VDER projects. This has made it easier for customers to enroll by simplifying the billing process so customers can receive their community solar savings directly on their utility bill without the need to receive and pay a separate bill.

The utilities facilitate the transfer of the proportional credit value between subscribers and project owners and receive an administrative fee of 1% of the credit value. UCB makes it significantly easier to demonstrate and deliver the value of community solar to participants, cementing it as a key design feature for LMI customer accessibility. Other states have looked to New York to emulate its consolidated billing system. Crucial though it is to a successful program, UCB in New York has needed improvements over time.

NYSERDA requires standard VDER subscribers to receive a minimum discount of 5%. For ICSA 2.0 projects, NYERSDA established a higher minimum discount of 10% for LMI subscribers.

At present, all customers on the project must receive the same credit discount with the exception of one customer account effectively meant for large offtakers, or anchor customers. Only a single utility account can be excluded from UCB per project. Anchor customers may have multiple utility accounts or other contract terms that do not conform to this structure, making the UCB option sometimes untenable.

This is further complicated somewhat by recent advents like the Inflation Reduction Act’s (IRA) Investment Tax Credit (ITC) adders that require a higher 20% savings for LMI customers. In the present program structure, any project seeking to enroll LMI customers in pursuit of ITC adders must offer the same, higher discount to all but one utility account—an option may not be financially feasible.

However, as of June 2024, the PSC has approved multiple savings rates for projects, a significant improvement to the state’s community solar program. Utilities in New York have until June 2025 to incorporate changes to allow for up to three different savings rates on a single project and allow projects to exclude more than one anchor customer from net crediting.

Until the multiple savings rate update is implemented, projects must select a consistent discount across UCB projects and customers with exceptions to the project’s established discount rate cannot be billed through the UCB option.

Market Analysis

ConEd is one of the largest utilities by customers served in the country, much less the largest in the state. Because solar farms may only serve customers in their respective utility territories, this has made community solar development in the NYC region a more difficult challenge since space to build is limited, though not insurmountable. This challenge is aided by regionally specific incentives like a parking canopy adder. On the other hand, the Upstate region has the most deployed capacity in the state as of the first quarter of 2023, though plenty of capacity remains available.

Electric utilities and their territories

National Grid NY

• 1.6 million customers
• Territory includes 450 cities in most of upstate New York including Albany, and western New York in the Erie-Niagara region

Consolidated Edison (ConEd)

• 3.5 million customers
• Territory includes all of New York City and most of Westchester County

Orange & Rockland (ORU)

• 232,593 customers in NY
• Territory includes the northwestern suburbs of New York City

New York State Electric & Gas (NYSEG)

• 907,000 customers
• Territory includes various parts of upstate NY: the Southern Tier and Finger Lakes, parts of the Adirondacks, Catskills, and eastern border of the state
• An Avangrid company

Rochester Gas & Electric (RGE)

• 385,925 electricity customers
• Territory includes the nine-county region centered on the City of Rochester with an exclave in western NY
• An Avangrid company

Central Hudson Gas & Electric (CHGE)

• 309,000 electricity customers
• Territory includes the mid-Hudson River Valley, south of Albany

PSEG Long Island

• 1.1 million electricity customers
• Territory includes Nassau and Suffolk counties

Appendix

Utility Territory Map

Resources

• NYSERDA NY Sun Program Mid-Point Review
• Standardized Interconnection Requirements and Application Process

Other state community solar policy guides from Perch

• Colorado Community Solar Policy
• Minnesota Community Solar Policy
• Midwest Community Solar Policy (Michigan, Ohio, Wisconsin)
• New Mexico Community Solar Policy
• New Jersey Community Solar Policy
• Maine Community Solar Policy
• Maryland Community Solar Policy
• Washington DC Community Solar Policy
• Illinois Community Solar Policy
• Delaware Community Solar Policy
• Massachusetts Community Solar Policy
• California Community Solar Policy
• Michigan Community Solar Policy
• Pennsylvania Community Solar Policy