NYSERDA emerges as leading state small wind incentive program
The following article is one in a series of case studies included in AWEA's recently published Small Wind Turbine Market Report Year End 2011.
When Mark Mayhew joined the New York State Energy Research and Development Authority (NYSERDA) as small wind program manager in 2008, NYSERDA received more applications for PV in a week than the small wind program received in a year. Mayhew set out to improve the small wind program. In 2011, NYSERDA cemented its reputation as a leading state small wind incentive program.
The NYSERDA incentive is now based on expected kilowatt-hours. "When I inherited the program, we used a nameplate kilowatt multiplier with tower-height adders to determine the amount of the incentive," Mayhew said. "We changed that and now base the incentive on the estimated production at the site, based on computer modeling. The money for the program comes from the New York State RPS, and the goal is to increase the amount of renewable energy generation. So we base the incentive on the same metric. We require production readings for the first 2 years. There is no penalty if you don't meet projections, but we use the readings to do a better job predicting production for future projects."
To estimate production at a site, NYSERDA uses the New York State Small wind-Explorer, which was developed by AWS Truepower under contract to NYSERDA.
"When we compared the projections to actual 1-year data, the tool's projections were plus or minus 20 percent based on AWS wind maps," Mayhew said.
"The nice thing about basing incentives on estimated production is that the sites with better wind resources get more funds and consequently the opposite," he continued. "When we started the program, we required a minimum wind speed of 10 MPH. But when using the estimated wind resource, consumers are eligible for something. We looked at the worst locations for siting a wind turbine, and we found a location where a consumer would receive a $100 incentive. We hope that would be a disincentive."
The NYSERDA incentive breakdown is as follows: $3.50 per kWh for the first 10,000 kWh expected annually from an installation; $1 for each kWh from 100,000 to 125,000; and then 30 cents for each kWh over that. NYSERDA will not pay more than 50 percent of the installation cost and not more than $400,000 total.
"We define on-site wind as anything behind the meter, as long as the customer can use all the power the system generates. The program does have a hard cap of 2,000 kW. It does not matter whether the installation is sited at a consumer's house, an industrial facility or a school; the program is the same for all," he said.
The largest application in Mayhew's program is an 850-kW machine at an industrial site that is expected to generate 2 million kWh per year. Dairy farms have been major participants in the program, perhaps because sites in certified ag districts are exempt from many permitting requirements, resulting in fewer obstacles during the planning process. School projects could benefit tremendously from the NYSERDA incentive, with some rural schools eligible to use state aid plus the NYSERDA incentive to fund a project.
To be eligible for the incentive, a consumer must pay into the state systems benefit charge/RPS program, which applies to most consumers in New York.
"Essentially all consumers pay into the program except for small municipal power districts that are independent and the New York Power Authority that provides major power users. They would not be eligible," Mayhew said.
Although some parts of the state have their own programs (Long Island, for example), NYSERDA manages programs for most of the state, including all of Upstate New York and New York City.
In 2011 the NYSERDA small wind program used up its entire budget of $4.3 million, which encompasses 73 approved projects from October 2010 to the end of 2011 (turbines are installed or are in process). The projects range from a Skystream 2.1-kW turbine to a Gamesa 850-kW turbine. A list of eligible turbine models can be found on the NYSERDA website; for turbines less than 200 meters in height, NYSERDA uses the Interstate Turbine Advisory Council's list.
The incentive is offered as an upfront payment in two portions: 65 percent when the equipment is delivered onsite and 35 percent upon interconnection; the payment is made to the installer, who must pass it on to the customer per the installer's contract.
Mayhew said that he has two challenges with funding projects in the state. First, 50 percent of the incentive pool money comes from New York City, so there is pressure to site projects there (although because the program is offered on a first-come, first-served enrollment, the program will support whichever project happens to materialize). A structural analysis is required for building-mounted turbines to be eligible, so the program has not yet received any applications for this type of project. Second, New York is a home rule state. Every town has its own ordinance, and when an ordinance is written to exclude wind farms in the area, it sometimes also prevents small wind turbine installations.
Mayhew said NYSERDA's small wind incentive budget is $3 million per year. The small wind budget is funded until 2015, and any funds left over from other programs could be applied to small wind if the program can use it. (The program received an additional $1.5 million for 2012.)
Learn more about NYSERDA's small wind incentives at www.nyserda.ny.gov/Page-
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