Solar subsidy, charge a feel-good waste

Last year I investigated installing a solar-powered photovoltaic system at my primary residence. I discovered the unfavorable economics didn’t justify the expense. Even with federal and state subsidies the cost was more than $10,000 for a seven kw system and the payback exceeded 10 years.

I then looked into the System Benefits Charge/Renewable Portfolio Surcharge on my monthly bill; this charge ranges from about $3 to more than $5 depending on my energy usage, which ranges from about 450 kilowatt-hours to 800 kwh. Part of the SBC/RPS charge is funneled to New York State Energy?Research and Development?Authority, the state agency which subsidizes part of the SPV installation cost. Pursuant to the Freedom of Information Act, I requested a list of installed residential SPV systems and I was given a list of completed installations spanning an approximately three-year period ending on Dec. 6, 2013, from NYSERDA.

About $126 million, including $32 million of direct subsidies provided by NYSERDA, was used to pay for the installation of about 24,300 kw of nameplate residential SPV capacity. NYSERDA uses a standard utilization (capacity) factor of 0.134 multiplied by the nameplate capacity and the total number of hours in one year to estimate the kwh production. I determined the payback by dividing the total cost of all of the SPV systems by the product of the annual kwh production and the market price of a kwh (with all costs on a typical utility bill allocated to the kwh consumed) which works out to about $0.15/kwh. This resulted in a payback of 30 years. If utilities weren’t required to enter into net-metering agreements but instead only had to pay avoided cost, then the payback would be even longer.

The inescapable conclusion is SPV system subsidies are a waste of ratepayer money. Moreover the subsidy is an inequitable transfer of wealth from poorer ratepayers to more affluent ratepayers because affluent individuals have more savings and/or more disposable income to indulge themselves in feel-good renewable energy pursuits. For these reasons NYSERDA’s mandate to subsidize SPV installations and the part of the SBC/RPS charge that funds the NYSERDA SPV subsidy program should be eliminated, if not by the Public Service Commission then by the New York state Legislature and Gov. Andrew Cuomo.