Long Island Feed-in Tariff to Support an Additional 100 MW of Solar

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A new feed-in tariff announced this week is expected to bring an additional 100 MW of solar energy to Long Island. Solar PV systems of various sizes will be built across Long Island under the program, generating enough solar energy to power about 13,000 homes.

This week, electric company PSEG Long Island announced the results for Long Island’s second Clean Solar Initiative. The feed-in-tariff program builds upon Long Island Power Authority’s first feed-in tariff for solar energy and is designed to bring an additional 100 MW of solar energy to Long Island.

After a four-month application period that ended on January 31, 2014, PSEG Long Island received 178 proposals from 55 separate entities, which reflected a variety of proposed bids.

 

Feed-in tariffs have been hailed as one of the best ways to encourage solar and other renewables around the world. To work the way they’re intended, though, they need to be priced right. Price a feed-in tariff too low, and no one will come to the party. Price it too high, and it may be hard to pay for the program.

 

Following a comprehensive analysis, the Long Island program set the final bid price for this program at $0.1688 per kWh. That will be paid to developers for solar PV systems of various sizes and types that will be built across Long Island.

 

“These auction results have yielded a price for solar energy almost 25 percent below the price being paid for the first feed-in-tariff on Long Island, for a savings of $8.1 million per year,” said Michael Voltz, director of Energy Efficiency and Renewables for PSEG Long Island. “We are pleased to be working with the solar industry to continue driving down costs of solar energy on Long Island.”

 

The decline in price reflects a number of factors:

 

  • Increased consumer awareness, understanding, availability, and demand for solar energy

  • Competition among a growing solar industry on Long Island

  • Ongoing decline in costs of manufacturing and installing solar

  • Federal, state, and local tax incentives

 

The 100 MW of solar energy in this program is expected to be generated from 76 separate projects, which will be enough to power about 13,000 homes. These solar PV systems will provide clean, renewable energy for at least the next 20 years, and will create hundreds of construction jobs.

In an effort to reduce load on constrained areas and help defer, reduce, or eliminate the need for new generation and infrastructure, a solar price premium of 7 cents per kWh was offered for projects built in designated areas east of the Canal Substation in Southampton. However, less than the required 40 MW were accepted from that area. Therefore, the locational premium on South Fork projects will not be paid at this time.

The success of this feed-in-tariff program ensures continued growth and diversification of Long Island’s renewable energy portfolio, providing safe and adequate long-term energy supply for Long Island. It is also significant that all 100 MW will be generated on Long Island, further advancing the development of solar energy and the growth of clean energy jobs.

PSEG Long Island LLC was selected by the Long Island Power Authority (LIPA) in Dec. 2011 to manage LIPA’s electric system. The 12-year contract includes commitments to improve customer satisfaction and provide safe, reliable service for LIPA customers. PSEG Long Island is a subsidiary of Public Service Enterprise Group Incorporated (NYSE: PEG), a publicly traded diversified energy company with annual revenues of more than $10 billion.