Sunday, February 15, 2009

Long Island to Spend $14.4 Million on Renewables

New York Times/John Rather/February 15, 2009

The Long Island Power Authority is moving ahead with an ambitious effort to generate more solar energy from commercial and industrial sites and increase spending by 80 percent to $14.4 million for residential rooftop solar power systems and other renewable energy programs, LIPA officials said.

The actions come amid anticipation that President Obama and Congress will increase federal support for solar and other renewable energy. Mr. Obama wants to double renewable energy production over the next three years. Gov. David A. Paterson has also backed solar energy expansion and recently set a goal that 40 percent of the state’s energy come from renewable sources and energy efficiency by 2015.

LIPA’s increased investment in renewable energy is being made as it raises electricity rates by 3.2 percent and cuts other programs that officials said are necessary to avoid a rate increase exceeding 4 percent. The cuts include eliminating postage-paid bill remittance envelopes for a savings of nearly $3 million.

LIPA officials said it sought the rate increase, in part to cover a $100 million gap between current oil prices and what it is now paying for oil under a hedge contract.

Over the past six years, officials said, the hedge contracts saved about $600 million because they had protected LIPA from spikes in oil prices. But now, with oil prices sharply lower than what they were much of last year, LIPA will spend about $100 million more for oil in 2009, the authority said. Fuel and power purchase costs are 55 percent of LIPA’s expenses.

LIPA’s commercial solar project, which would be the largest of its kind to date in the Northeast, would provide the LIPA grid with up to 50 megawatts of electricity. That is about a fifth of what a medium-size oil or gas-fueled power station would generate and a tenth of the 500 megawatts LIPA projects its energy efficiency programs will save by 2018.

The solar power would come from acres of photovoltaic panels laid out on commercial and industrial rooftops, school and government buildings, brownfield sites, landfills and even parking lots across Long Island.

The project would be nearly 50 times as productive as a $6.1 million pilot project in 2003 that placed more than 8,000 panels on three commercial roofs in Farmingdale and Melville, enough to generate 1.05 megawatts and cover two football fields — at that time the largest photovoltaic project in the world.

The amount LIPA would pay to buy the solar power is likely to be considerably higher than what it would pay for power from oil and gas, a differential referred to as a green premium.

While tight credit and the sharp drop in oil and gas prices since mid-2008 would appear to be working against large, capital-intensive solar power projects, Kevin Law, LIPA’s president and chief executive, sounded confident in a telephone interview that the LIPA project would progress.

“We can’t be making decisions today based on just where the economy is in 2009,” he said. “Energy planning needs to be looking longer term.”

Meantime, LIPA’s $3.8 billion budget for this year increases funding for renewable energy to $14.4 million, up from $8 million last year, the authority said. About $13.2 million will go to LIPA’s existing “solar pioneer” residential program and for a new “solar entrepreneur” program that provides rebates to businesses and municipalities for solar systems of up to 100 kilowatts. The remaining $1.2 million is for a just-announced program to promote small-scale, customer-installed wind turbines.

Most of the increase will go to the residential solar pioneer program. It offers a rebate of $3.50 a watt for rooftop systems, which cost an average of about $7 to $8 a watt to install, or $52,500 to $60,000 for a slightly larger than average 6.5-kilowatt system. Governments, schools and nonprofit groups are eligible for a rebate of $4.50 a watt.

About 1,700 rooftop systems built with LIPA rebates are scattered across Nassau and Suffolk Counties, the authority said. Another 500 residential customers have applied for rebates and are pre-approved.

Depending on house and system size, home systems can provide from about half to all of the 9,300 kilowatt-hours of electricity an average home uses annually. An average residential customer pays $1,882 a year for electricity.

To work efficiently, systems require direct sunlight and must be free or nearly free of shadows from trees or structures. In a process called net metering, electric meters turn backward and customers get credit for excess electricity that flows back to LIPA.

In addition to the LIPA rebate, homeowners and businesses that invest in solar systems can get a state tax credit of up to 25 percent and exemption from state and county sales taxes on the systems. For residential systems, there is a 30 percent federal tax credit.

Gordian Raacke, the executive director of Renewable Energy Long Island and the owner of a home solar system that has zeroed out his LIPA electric bill, said the solar incentives in LIPA’s 2009 budget “should result in a growing number of solar installations this year.”

See the original article here

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