New York Could Change Solar’s Relationship with Utilities

Much like California, New York has set some seriously ambitious goals towards cutting emissions — 80 percent below 1990 levels by 2050. And also like the Golden State, New York is one of the country’s leader in solar power. Currently, it ranks ninth overall for installed solar. But how is New York changing the way utility companies and solar would work together?

New York and Distributing Solar Power Systems

Thanks to record-breaking growth in the solar industry, particularly in rooftop solar, the demand for electricity has lessened, and New York utilities are required to buy extra power from buildings that produce more solar than needed (also known as net metering).

But New York’s Public Service Commission will be barring utility companies from owning “distributed” power systems, according to Grist. In other words, utilities will not be able to own rooftop solar, small wind turbines, or anything else that’s not a large-scale power plant of some kind.

“New York’s approach to limit utility ownership balances the desire for more solar with the desire to have competitive markets that we expect to continue to bring down the costs of solar,” said Anne Reynolds, director of the Alliance for Clean Energy New York. This change could help serve as a model for other states. In fact, Hawaii regulators are considering a similar policy, said Reynolds.

Pros and Cons of New York’s Solar Policy

Restricting utilities from owning power generation and energy resources means a competitive market that benefits consumers. Revenue will be based on how well a utility company can distribute power, not generate it. Given how well residential solar power systems can produce electricity, it makes sense to develop a system where utilities earn based on efficiency and effectiveness versus the actual product of energy. Utilities will have to partner with other companies and service providers, bringing solar power to more people.

If utilities could buy their own solar systems, they could leverage themselves to strong arm smaller solar companies out of business. So instead of a system where the market is competitive and the consumer wins, prices would go up and consumer options could become limited. However, if small companies are allowed in, though, consumer choices would drive technological innovations and push down the cost of energy.

Ultimately, the Commission’s move means that utilities would have to base decisions on clean energy goals, since it works to their advantage to become the best at distributing energy. Either way, the current policy being put into place will set New York on track towards creating and distributing energy in a whole new way.

What do you think of New York’s new policy? Tell us in the comments!


Image Credit: Lucas Braun at Wikimedia under a Creative Commons license

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