Two Ways New York Businesses Can Benefit From State Energy Incentives Before They Run Out

New York:  A Leader in Clean Energy

New York State is quickly becoming a leader in solar and energy storage development in the United States. With its own “Green New Deal” and “Clean Energy Standard” (CES) programs in place, New York State has set the ambitious goal of achieving 100% carbon-free electricity by 2040. A series of bills and incentive programs were recently passed in the state legislature to help turn this target into a reality. One of these laws, Intro 1253, now requires many of New York City’s buildings to significantly slash their carbon emissions starting in 2024, which means efficiency upgrades and alternative energy procurement methods are becoming a high priority for facility managers and business owners.

Making large building upgrades can be costly and resource intensive with long payback periods. However, generous incentives for both solar and energy storage are now helping bridge the gap in New York, with a special emphasis on energy storage thanks to a state goal of reaching 3,000 megawatts by 2030. With roughly $3B in incentives set aside for energy storage projects and some $280M available for projects under 5 megawatts, the timing is ripe for businesses to take advantage of the incentives while they last.

How Do Incentives Work?

New York State Energy Research & Development’s (NYSERDA) energy storage incentive program has assigned three megawatt-hour blocks with specific incentive amounts set aside for projects in New York City and the rest of the state. Each incentive block is offered on a first-come first-served basis; once the funding for that block has been allocated, the next block will be open for applications at a lower incentive rate. The incentive is a fixed, one-time rebate, applied in total dollars per kilowatt-hour of installed capacity. As a result, the customer receives a lower rate for their energy services agreement, meaning more value from energy storage.

Why Energy Storage?

A business can benefit from energy storage in one of two ways:

1: Lower Your Demand Charges with Energy Storage

Energy storage helps organizations reduce operating costs and increase resiliency, especially when electricity prices are high or supply is scarce. By drawing power from the grid when prices are low and discharging power from its stores when prices are high, battery storage systems reduce usage spikes and demand charges by smoothing your usage along 15-minute intervals. As a business that is subjected to time of use rates and large demand requirements, “smoothing the curve” can help keep electricity bills at a lower cost.

When paired with solar, the benefits of energy storage are even greater. For more on how incentives apply to new and retrofitted solar + storage projects, you can refer to this article here. In summary, the federal Investment Tax Credit (ITC) along with MACRS depreciation apply to new battery storage projects paired with solar for a limited time.

2. Earn Revenue by Leasing Your Space for Solar and Energy Storage

In the past, business owners have had limited choices when it comes to solar + storage projects. The decision to put solar and storage on one’s property was based on solely the amount of electricity consumed onsite. The benefit of this method is that businesses can drastically reduce their electricity bills. But for those who are looking to capture additional revenue, leasing property to host community solar and storage projects is an ideal opportunity.

Today, businesses across New York are capturing astounding lease revenues from community solar and storage projects, while supporting their local communities. Community solar and storage is a cooperative model in which a property owner leases out rooftop or parking lot space for a developer to build a new solar and energy storage project; nearby residents can then subscribe to be offtakers of the power produced. Not only does community solar and storage provide the local community with cost-effective access to renewable energy, property owners also benefit from fixed annual lease payments with no upfront investment. As a New York business owner, you could make up to $100,000 a year by leasing your property for community solar and storage.

Community Solar and Storage Lease Agreement

In this model, your business leases rooftop and/or parking lot areas to a developer, such as ForeFront Power, for a 25-year term. In return, ForeFront Power will provide risk-free annual lease payments. ForeFront Power will construct, own and operate a community solar and storage system for the benefit of other local businesses and residents. This structure allows your business to capture increased revenue with no responsibility to purchase power or maintain the solar array.

Act Now: The Blocks are Filling Up

The energy storage incentive is available for standalone storage systems, existing solar projects adding new storage, and new solar and storage systems. New York is already more than halfway through the total incentive pool for the rest of the state incentive blocks, while more incentives are still available in New York City. If you’ve been considering energy storage for your facilities, the time to act is now. In order to maximize their savings opportunity, facilities should pair up with a NYSERDA approved contractor, such as ForeFront Power. A trusted energy partner in the commercial sector for over a decade, we’ve developed 27 megawatts of community solar in New York, the largest community solar portfolio in the state. With an additional 48 megawatts expected to be completed by the end of this year, we hold a strong commitment to helping New York reach its renewable energy goal.

For more information on New York’s Energy Storage incentive programs, visit NYSERDA.

Interested in what solar and energy storage can do for your business?  Click Here to Learn More.