United States: New York's Shared Renewables Initiative: A Bold Step To Expand Customer Access To Renewable Energy

Last Updated: September 10 2015
Article by Florence K.S. Davis, David T. Doot, Thomas C. Havens and Kate McGinnes

"No man is an island, entire of itself..." In his 17th-century poem, John Donne aptly summed up the uniquely human desire to be connected to one's neighbors. This theme is being revisited today, as communities and neighborhoods from Maine to Hawaii have joined together to reap the environmental and economic benefits of clean, renewable energy through "community" or "shared" solar programs. These programs have enabled members of a community to pool resources and share the costs and benefits of a single solar energy installation that may be located remotely from the participants. Community shared renewables initiatives have the potential to dramatically expand the deployment of solar and other forms of "distributed generation," or "DG." For example, in the case of solar DG projects, the National Renewable Energy Laboratory estimated in its April 2015 Technical Report that approximately 49 percent of households and 48 percent of businesses are unable to host a solar photovoltaic (PV) system. Expanding the market to those customers could result in cumulative growth in PV deployment of 5.5-11GW from 2015 to 2020.1 New York recently enacted its own version of community renewables, which represents the most aggressive effort thus far to expand customer access to solar and other clean energy resources.

In its Order Establishing a Community Distributed Generation Program (Order),2 the New York Public Service Commission (NY PSC) introduced a shared renewables program (Community DG Program) to expand opportunities to purchase solar and other forms of clean energy to customers who are unable to install their own facilities on-site, either due to the high upfront costs or because their properties are unfit for installing solar panels or other clean energy projects. Unlike many similar programs, New York's Community DG Program is structured broadly to allow all forms of "behind the meter" generation that are eligible for net metering under existing law3 to be used for a community renewables project. This includes not only solar PV systems but also biogas facilities, wind turbines, fuel cells, and micro combined heat and power facilities.

Community DG Project Eligibility and Organization

To be eligible for net metering4 and to serve as a community DG project, a renewable energy facility must be no more than 2MW in size.5 This size limit should be large enough to permit community DG projects to capture the economies of scale that are crucial to maximizing the economic benefits to customers who participate in such a project.6 The project must also be located "behind the meter," at a site that is owned or leased by the project's "host" customer, and may include both demand or nondemand metered customer accounts. This feature is particularly important for siting community DG projects at multifamily housing facilities, which often have "master" demand meters for common load and nondemand meters for residential units. Additionally, a community DG project must be geographically located in the same service territory and NYISO load zone as the project's interconnecting utility.7

Under the Community DG Program, groups of eligible customers (Members) contract or organize with a project administrator (Sponsor), which may include project developers, municipal entities or nonprofits. The Sponsor is responsible for building, owning, operating and financing the community DG project, including interconnecting the project to the grid. The Sponsor also is responsible for the overall coordination of the project, including soliciting Members, allocating and managing each Member's proportionate share of the project's output in excess of the host's usage, and interfacing with the local utility. The utilities are responsible for tracking and distributing net metering credits in accordance with the Sponsor's instructions. Importantly, utilities are required to implement the Community DG Program without imposing any additional charges or fees on Members, at least initially. 

Potential Sponsors will need to have a wide variety of core competencies in order to successfully execute a community DG project. Sponsors will need to have, either in-house or through arrangements with third parties, skills ranging from low-cost customer acquisition and management to those more typically used for energy project development, including the ability to finance, own, and operate commercial-scale energy projects and to monetize any related tax benefits. To the extent renewable project developers do not possess these capabilities, they will likely seek to forge joint ventures or similar business arrangements with other interested parties to pursue project sponsorship opportunities under New York's Community DG Program.

Community DG Project Membership

A community DG project must have no fewer than 10 Members, but there is no prescribed maximum number of Members. Members may own or contract for their proportionate share of project output in an amount not less than 1,000kWh annually, and Members may not take more than their annual historical usage. To help facilitate project financing, the Community DG Program also allows up to 40 percent of the project's total output to be allocated to "anchor tenant" Members with more than 40kW of load (not including Members who are owners of multi-unit, master-metered buildings). 

The value of a community DG project for its Members is in the expected energy cost savings derived from their allocable share of the net metering credits produced by the generating facility in excess of the project host's usage. The excess output from the project is converted into the facility's net metering credits. The Sponsor is responsible for providing the utility with all necessary details as to how these credits are to be proportionally distributed among the Members. The credits are then applied to individual Members' bills, reducing their monthly energy charges. Utilities are required to provide a simple, on-bill credit to participating customers, enabling customers to see these direct economic benefits of joining a shared renewables project. 

Another feature of the Community DG Program is that a Member's allocation of net metered credits can be transferred or relinquished back to the project Sponsor in the event a Member decides to move. The project Sponsor may also accumulate net metered credits in other ways, such as when the output from the project is undersubscribed, or if a Member defaults on an obligation to the Sponsor and forfeits its share of credits. Sponsors are required to distribute unused credits to Members at least annually to avoid periodic cash-out requirements and to help compensate Members for project outages or other circumstances that may prevent a facility from reaching its forecasted annual production. 

Program Implementation Timeline

In the Order, the NY PSC noted strong support among many stakeholders for moving forward quickly to implement the Community DG Program. Accordingly, the Order creates an accelerated, two-phase timeline to facilitate the program's rapid implementation, while at the same time ensuring that DPS staff carefully coordinates the disposition of certain issues, such as rate design and the appropriate valuation of distributed resources generally, that are currently under consideration in New York's Reforming the Energy Vision (REV) proceeding. In early September, each of New York's investor-owned electric utilities made filings showing Community DG Opportunity Zones, or target areas where strategically located community DG projects would provide the greatest benefits to the local electric distribution system. The utilities are required to file tariffs implementing the Community DG Program by September 15. The first phase of the Community DG Program commences shortly thereafter, on October 19, and runs through April 30, 2016. During this first phase, qualifying projects are limited to those that either (i) install DG in areas where it can provide the greatest locational benefits to the power grid, or (ii) support economically distressed communities, by ensuring that at least 20 percent of the Members are low- or moderate-income customers. Utilities will then be required to open their entire service territories to community DG projects in phase two, beginning May 1, 2016. However, Sponsors of projects otherwise eligible for phase two will be able to file preliminary applications to interconnect during the first phase of the program. 

The NY PSC's Community DG Program, together with the landmark REV proceeding, further underscores the state of New York's interest in adopting bold measures to support market expansion and promote customer choice in accessing clean energy in an affordable manner. Potential Sponsors and Members alike are encouraged to closely monitor the implementation of the Community DG Program against the developing policies and legal requirements under consideration in REV and the rapidly evolving energy landscape in New York. 


1 NREL, "Share Solar: Current Landscape, Market Potential, and the Impact of Federal Securities Regulation," Technical Report, April 2015 (available at http://www.nrel.gov/docs/fy15osti/63892.pdf ). 

See Case No. 15-E-0082 (July 17, 2015). 

See New York Public Service Law §66-j and §66-l.

4 Net metering is the process whereby DG customers get a credit for electricity they deliver to the grid in excess of the electricity they consume from their DG project. Customers are typically credited at the full retail electricity rate for the power they sell back to the electric companies. "Virtual" net metering enables customers to assign their surplus power from their DG systems to other metered accounts that are not physically connected to the host DG system. Essentially, the excess electricity can be virtually assigned to reduce the bill of another account. Laws pertaining to net metering and virtual net metering vary from state to state.

5 The 2MW size limit applies to solar PV and small wind power projects; anaerobic digester projects are limited to 1MW, and fuel cell projects must be no larger than 1.5MW.

6 Each project built under the Community DG Program will be counted against the net metering utility's aggregate net metering cap (currently, 6 percent of each utility's 2005 peak demand).

7 Neither the New York Power Authority (NYPA) nor the Long Island Power Authority (LIPA) is subject to the jurisdiction of the NY PSC or to the Order. NYPA customers in Con Ed's New York City and Westchester service territories, however, will be able to participate in the Community DG Program. Moreover, LIPA has been "encouraged" by the NY PSC to adopt a shared renewables program along the lines described in the Order.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Florence K.S. Davis
David T. Doot
Kate McGinnes
Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions