Dive Brief:

• Staff of the New York Department of Public Service released a report on how to best integrate distributed resources into the state's grid, recommending careful study to ensure the resources get "full value" for their services.
• The report, part of New York's Reforming the Energy Vision, also recommends existing solar installations should receive full net metering rates for 20 years from the date of their installation.Since 2012, solar power systems in New York State have grown 750%, according to DPS, from a little over 78 MW to 669 MW.
• The report also calls for a process to break down and examine all the factors which go into determining the value of distributed resources, though it sets no schedule set for this investigation.

Dive Insight:

New recommendations out this week from New York regulators are a potential boon for distributed resource providers, highlighting the emphasis regulators may put on those energy sources and the benefits they bring. New York intends to lean heavily on distributed resources in its bid to meet half of the state’s electricity needs with renewable power by 2030. While the state has been at the forefront of integrating DERs through its REV proceeding, the new report affirms the state's commitment to a more distributed design. 

PSC Chairman Audrey Zibelman described the proposal in a statement as a “cutting-edge framework" that would help ensure consumers, utilities and energy developers will be "rewarded for investment decisions based on the full value that clean energy and other Distributed Energy Resources provide to our electric system.”

States have been debating net energy metering (NEM), with some choosing to reduce remuneration rates below retail value. New York's report indicates the state is committed to determining the value of distributes resources holistically, though not necessarily keeping the full retail NEM rate in place forever.

From the report: "Especially when combined with traditional volumetric rate structures, NEM provides an imprecise and incomplete signal of the full value and costs of DERs. ... The purpose of this ongoing proceeding is to develop accurate pricing for DERs that reflects the actual value DERs create."

In addition "the NEM construct does not enable accurate compensation for all the value streams DERs offer, including those that today may not be quantifiable or even identified." For pricing to be successful, the staff report recommends a more "precise and granular" pricing, which only may come with more DER penetration. 

This is in line with a historic compromise signed by New York's utilities and leading solar developers, including National Grid and SolarCity.

Under the compromise, behind-the-meter solar customers would be credited at the full retail rate until 2020, when the credits would gradually decline until they align with the value of distributed solar determined under the DER docket. 

The report establishes a grandfathering clause, recommending existing rooftop solar systems continue to receive compensation under their current net energy metering contracts for a period of 20 years from the date of initial operation. After that, homeowners and commercial owners of solar systems will have the option to take advantage of these new compensation plans.The report also recommends beginning a transition to a new methodology for pricing renewable power and other DERs, hoping to spur development of larger, community and shared renewables projects.