1. Net cost after first year Annual Production kWh From installer
New York State’s Clean Energy Standard Policy:
Examining Challenges to Increasing Residential Solar Power
Chris Carey - MPA Project Laurie Buonanno, PhD - Project Advisor; Greg Rabb, MUP/JD - Second Reader
Introduction & Purpose
Literature Review
Findings & Recommendation
The power grid was originally designed around central points of power generation. Power grid operators and policy makers need to adjust the current system for power supply dispatch and delivery to gain full benefits of solar power (DNV GL 2014, P1). One theory of this change is described in Figure 1, “The Power Industry of Today.” This figure represents the current state, where energy is created at a centralized location, sent through the power system transmission system and then to the distribution system making it to the end consumer. In this current system, energy could travel large distances from generation to point of use. Figure 2, the “Power Industry of Tomorrow” looks to integrate generation at the source of the load. This journey is under way with solar PV systems having the ability to be a critical component. In the new model, the power one can generate from a solar PV system could be used by one’s neighbor. This means the power that historically traveled hundreds of miles will only need to travel hundreds of feet. New York’s Clean Energy Standard will require 50% of New York's electricity to come from renewable energy sources like wind and solar by This is a study on how to increase penetration of residential solar power in New York State.
Many researchers have examined adoption of residential solar power with respect to uncertainty. Uncertainty can be defined as conditions or events that are unpredictable and /or credible probabilities to possible outcomes that cannot be assigned (Business Dictionary 2017). Research suggests that despite generous financial incentives, the adoption rates of residential solar PV rates are low. Willingness to adapt is high, but willingness to pay is low (Korcaj, Hahnel, and Spada 2014 P407). Uncertainty can be a critical element that surrounds the consumer’s decision to invest in a residential solar PV system. Current research attempts to determine the optimal adaption times, values of benefits, and adoption rates over time. Many studies examine policy incentives, concluding that policies reducing uncertainty will have a positive effect on incentivizing adoption.
Table 1 represents the top ten states by installed capacity. In these states, over 1000 policies and incentives exist. With over 100 policy incentives in New York, it can be difficult for the residential power customer to understand incentives, with the main information source for potential PV system adapters being “Solar Installers.” A study by Crago and Chernyakhovskiy (2016) concluded that among financial incentives, only rebates have a large and statistically significant effect. They concluded that a $1 per watt rebate increased annual PV capacity additions by 47%. (See Table 2.) Solar PV System Cost Breakdown for a 5600 watt system (typical home size unit), is $3.40 per watt.
This study found that uncertainty and break-even point are the two main factors affecting a homeowner’s adoption of a residential solar PV system, with both factors closely related. The break-even point (economic side of installing a residential solar system) was the most important aspect for the experts. Although the respondents wanted to support renewable energy and going “green,” it was imperative to have a reasonable payback period. Uncertainties can be directly linked to the break-even point. As uncertainties exist, these directly affect or shift the breakeven point. To increase penetration of residential solar PV systems it is critical to reduce the uncertainties that exist and provide clarity to a very difficult to manage process.
Based on these findings, it is recommended that NYS consider designating a single organization (such as New York State Energy and Research Development Authority - NYSERDA) to establish an entity (office/bureau) which could serve as a single source for consumer information.
Table 2. Solar PV System Cost Breakdown
Quote Date
Feb-17
Quote Number 1
Total System Cost
$19,040.00
NYSERDA Credit
($2,160.00)
Out of pocket cost
$16,880.00
Federal tax credit
($5,064.00)
NY solar credit
($4,220.00)
Net cost after first year
$7,596.00
System size (kw)
5.6
Cost per Watt
$3.40
Annual Production kWh From installer
8400
From Pwatts.nrel.gov(1)
6134
Top 10 States by installed solar capacity
Rank
State
Installed MW
Households
Population
Watts per resident
Total incentives number of policy and by state 1
California
18,296.00
4,732,000.00
39,250,017
466.1
268 2
North Carolina
3,016.00
341,000.00
10,146,788
297.2
110 3
Arizona
2,982.00
446,000.00
6,931,071
430.2 80 4
Nevada
1,991.00
309,000.00
2,940,058
677.2 39 5
New Jersey
8,944,469
222.6 57 6
Utah
1,489.00
292,000.00
3,051,217
488.0 52 7
Massachusetts
1,487.00
244,000.00
6,811,779
218.3
113 8
Georgia
1,432.00
162,000.00
10,310,371
138.9 64 9
Texas
1,215.00
137,000.00
27,862,596
43.6
166 10
New York
927
152,000.00
19,745,289
46.9
120
Methods
Research was conducted to price out a residential solar system for my residence. Next, nonprobability expert sampling was used, with data collected through face-to-face semi-structured, open-ended interviews of experts in the energy industry. These experts have investigated rooftop solar PV systems, but did not install solar PV in their residences..
Source: Solar Quote for Chris Carey
References
Business Dictionary (2017). "Uncertainty" Retrieved 4/29/2017, 2017, from
Crago, C. L., & Chernyakhovskiy, I. (2017). Are policy incentives for solar power effective? Evidence from residential installations in the Northeast. Journal of Environmental Economics and Management, 81,
DNV, G. (2014). “Energy, A Review of Distributed Energy Resources.” Prepared by DNV GL Energy for the New York Independent System Operator.
Korcaj, L., et al. (2015). Intentions to adopt photovoltaic systems depend on homeowners' expected personal gains and behavior of peers. Renewable Energy, 75,
Rai, V., et al. (2016). Overcoming barriers and uncertainties in the adoption of residential solar PV. Renewable Energy, 89,
Sources: Solar-Energy-Industries-Association (2016), Database of State Incentives for Renewables & Efficiency (2017) (for policy and state incentives) & US Census (2017) .