Some Solar Energy Is More Equal Than Others

The New York Public Service Commission (PSC) has issued a new order designed to put a fairer and more accurate value on surplus solar energy. The cost of installing rooftop solar arrays has been coming down; now comes the challenge of figuring out how much the energy is worth.

“This PSC ruling is great news for commercial rate-payers looking to go solar and monetize their rooftop real estate,” says Doug Hertz, president of Westchester-based Sunrise Solar Solutions. “Con Edison customers will now receive higher credits for the energy they send back to the grid – we estimate anywhere from 30 to 50 percent. And that’s good news for co-ops and condos.”

Would that it were so simple. The mechanism to achieve this accurate value is called the Value of Distributed Energy Resource (VDER). This is typically recorded as negative use and is commonly referred to as the “meter spinning backwards.” According to Hertz, the new ruling will make no difference to direct-metered buildings without a master meter, in which every unit has its own electric meter, which is read by Con Ed. “Those buildings got 21 cents per kilowatt, and that will not change,” Hertz says. “But it will make a difference for multi-family buildings with a master meter, with or without sub-meters. They used to get an average of about 10 cents per kilowatt-hour and could now get up to 15 cents.”

While Hertz welcomes the new PSC ruling, Michael Weiss, a solar consultant, sees it differently. For him, the glass is half-empty. “All solar should be treated the same,” he says.  “Yes, the VDER is an improvement for master-metered buildings. But it masks the inequitable valuation for residents of master-metered buildings compared to direct-metered multi-family housing.”

The crux of the problem is that multi-family residential buildings with a master meter – with or without sub-meters – are often classified as “large commercial” Con Ed customers. A 10-unit residential building that draws a prescribed amount of energy will fall into this category, while an identical building with direct metering is classified as residential.

“Because of this misfortune of utility account classification,” says Weiss, “the average value of a solar credit will now be 13 cents rather than 21 cents for residential buildings with master metering.  These multi-family residential buildings pay an average of 19 cents buying, but get only 13 cents back for solar credit. There should be a 21-cent flat rate for solar energy going back to the grid, no matter what.”

Hertz stresses that the recent PSC ruling is a work in progress. “The idea is to modernize the concept and value solar correctly,” he says. “This will be a two-year period of transition, and who knows what it will be two years from now?”