LIPA approves solar feed-in tariff program

LIPA trustees this week gave formal approval to a new solar program that will encourage construction of commercial solar power plants around Long Island that will sell electricity back to the authority much the way local power plants do, but without the emissions.

Approval of the so-called solar feed-in tariff on Thursday starts the ball rolling for companies and investors to construct mid- to large-size solar farms on commercial and municipal rooftops and other open spaces beginning July 15, when LIPA begins accepting applications.

Several solar installers at a LIPA trustees meeting this week applauded the program, saying it would likely lead to the creation of hundreds of jobs and up to 50 megawatts of combustion-less power. The Long Island Solar Energy Industries Association called it a "substantial and positive" step to building a local renewable energy portfolio. A megawatt of solar energy produces enough electricity to power 125 homes.

The $11.5 million program, paid for by ratepayers at around 44 cents a month, allows companies to negotiate 20-year contracts to sell solar power to LIPA for 22 cents a kilowatt hour. The program is considered ideal for companies with large warehouse roofs, which can accommodate dozens of solar panels.

The program differs from LIPA's traditional rebate program -- which continues -- that gives ratepayers refunds of around a third of the cost of solar systems. With a feed-in tariff, there's no rebate; producers are paid only for the actual energy their systems produce.

While the new solar program has caught the interest of installers and commercial firms, Michael Deering, vice president of environmental affairs at LIPA, said much of the early interest in the program is coming from municipalities.

"I expect we'll have a significant number of applications come in right out of the box," he said.

Solar installations provide two benefits to LIPA: They produce peak power on the long, sunny days of summer when LIPA's system hits its peak. And they are also dispersed around the region, helping to lower stress on the system by cutting the need to pipe plant power to far-flung places.

LIPA enters the peak summer season without one major power source: the 660-megawatt Neptune Cable. The $1.75 billion cable has been out of service since early June because of two related transformer failures. Michael Hervey, LIPA's operating chief, said a spare transformer is in place and can be used if needed this summer.

The expansion of solar comes as LIPA continues to review around a dozen proposals for new power around Long Island, including new gas-fired plants in Kings Park, Shoreham and Yaphank, and potentially a new cable. LIPA is also renegotiating its power supply agreement with National Grid, which owns 17 former Lilco plants around Long Island, including large steam-generators in Northport, Island Park and Port Jefferson. LIPA this week said a new agreement with National Grid could give it the flexibility to upgrade the plants to new levels of efficiency.

Paul DeCotis, LIPA's vice president of power markets, said LIPA is considering opening the bidding process for new power sources that are used primarily for peak power, and said solar peaking units could be among the power sources being considered.