More Solar Power to Heat Up New York's Economy?

New York residents could be using more sun-generated electricity if state politicians pass legislation requiring utilities to install and buy enough solar power capacity to account for 2.5% of its overall electricity sales by 2025.

The mandate could create about 22,200 jobs and $20 billion in economic output, which would include wages and revenues, according to a report by nonprofit Vote Solar. Residential ratepayers are likely to see a 39 cent average increase on their monthly bill over a 14 year period, says the report.

Two bills with the solar energy mandate are making its way through the State Assembly (A.11004) and Senate (S.7093a), and renewable energy advocates are stepping up their campaigns to get them passed. San Francisco-based Vote Solar's report touts the legislation's job-creation and money-saving benefits. The nonprofit has also lined up the Natural Resources Defense Council and the Alliance for Clean Energy New York to promote the legislation.

Concessions for Private Utilities

The bills would require private and public utilities such as the Long Island Power Authority (LIPA) and New York Power Authority (NYPA) to boost their solar power sales or else face penalties.

To gain utilities' support, the bills also would allow them to own solar power plants for producing up to 25% of the required amount. Currently, private utilities can't own power plants. NYPA, run by the state, owns hydroelectric and fossil-fuel power plants and sells power to municipal and investor-owned utilities, as well as large factories, businesses and government agencies.

In some states, such as California and North Carolina, utilities have tussled with independent power producers over who gets to own solar power plants and how much utilities should pay for solar-generated electricity. LIPA and NYPA didn't return calls and emails for comment on the solar legislation.

Both the Assembly and Senate bills could reach a full-floor vote by the end of this month, says Rosalind Jackson, a Vote Solar spokeswoman.

A National Trend

The promise of jobs and other improvements to the economy have been big drivers for elected officials -- from President Barack Obama to small-town mayors -- to embrace solar and other forms of renewable electricity, such as wind and geothermal.

Across the country, more than 30 states are requiring utilities to increase their sales of renewable electricity. Many don't have specific requirements for solar energy, however, which can be more expensive than wind power. Some states also don't count power from hydroelectric plants, which generate even cheaper electricity.

New York already has a renewable energy mandate in place -- it's commonly called the renewable portfolio standard (RPS). Last year, the state expanded the mandate to 30% by 2015, from 25%, and aims to reach the goal through a central process of buying renewable electricity from power-plant developers and owners.

More Solar in the Mix

The mandate applies to investor-owned utilities only, and these utilities are close to meeting the goal. In April this year, the state agency overseeing the RPS program reported that it had funded 39 renewable energy projects, including 14 wind farms, 19 hydroelectric plant upgrades, one landfill-gas project, two biomass and three coal-fired plants that would partially replace coal with biomass. Of these projects, 26 are in operations.

The new bills aren't meant to expand the RPS program, Jackson says. The bills' proponents want to see more solar in a state that allows hydropower, which it has in spades, to meet its renewable energy goals.

The pending legislation, which would apply not only to investor-owned utilities but also government-run LIPA and NYPA, would push New York's solar energy capacity from less than 25 megawatts now to about 5,000 megawatts by 2025. It would set interim goals of 500 megawatts by 2015, increasing to 1,500 megawatts by 2020.

Divvying Up the Market

In some states, deciding who gets to own and sell power has been contentious. For example, California utility Southern California Edison ran into opposition when it proposed to own and operate 250 megawatts of rooftop projects.

Critics argued that Edison would gobble up too much commercial rooftop space for its own program and make it difficult for companies that want to be in the solar power generation business to compete. The state ultimately approved Edison's proposal but also required the utility to buy 250 megawatts of power from independent producers.

Duke Energy (DUK) of North Carolina also ran into similar problems after proposing to own and operate solar power plants. The utility eventually halved the scope of its plan to get approval from the state.

The bills in New York would mandate that 50% of the required solar-generated electricity come from power plants that are owned by the utilities or by independent power generators (utility-owned plants alone are allowed to produce up to 25% of the mandated amount).

The other 50% would be from solar electricity systems installed on residential or business properties. Home and business owners could get credit on their bills or cash payments for generating solar energy, but details over incentives and pricing have yet to be worked out.