Under New York State Public Service Law Section 66-j, certain remote net metered renewable energy projects, including solar energy facilities, are limited to 2 MW on a single deeded parcel in order to qualify for net metering.

The Public Service Commission (“PSC”), in its December 14, 2014 “Order Raising Net Metering Minimum Caps, Requiring Tariff Revisions, Making Other Findings, and Establishing Further Procedures” (“December Order”), addressed the 2 MW issue. In clarifying the 2 MW limitation, the PSC addressed requests from Cornell University regarding whether, under the limitation, a non-residential solar customer can collocate multiple 2 MW remote net metered projects on adjacent or contiguous parcels.

The PSC adopted a three-part test to determine compliance with the 2 MW limitation. In order to qualify for remote net metering, a 2 MW project must be:

  1. separately metered and interconnected into the grid;
  2. on a separate site; and
  3. independent of any other project.

A project which separates a facility into 2 MW units behind only one cumulative meter that is actually connected to the utility grid (even if there are subsidiary meters) does not demonstrate compliance with the 2 MW limit, and as such, does not qualify for remote net metering. The PSC further clarified in its January 9, 2015 “Order Clarifying Prior Order” that “independent” or “separately operated” means that a project can start up, shut down and run independently of any other project.

The PSC stated in its December Order that the 2 MW limitation is important as “net metering is intended to foster the development of large numbers of small facilities” that are widely distributed. However, the 2 MW limitation does not prevent a developer from locating several projects on sites that are in close proximity to each other. In fact, in its December Order, the PSC expressly stated that “[n]othing . . . would prevent owners of property from subdividing a larger property into separately deeded parcels, just as they would for other real estate purposes.”

Although the December Order grandfathers projects under prior solicitations, provided those participants “made good faith efforts to comply with the 2 MW limit,” compliance with this limitation will be essential to projects going forward. Should a project not comply with the 2 MW limitation, a utility may deny a customer’s application for interconnection, as the PSC has stated these projects are not eligible for net metering.

What should Solar Developers Do?

In light of the December Order, developers of projects larger than 2 MW should consider the feasibility of subdividing parcels or adjusting lot lines in order to accommodate independent 2 MW projects in close proximity to each other. This can be done as part of the zoning and permitting process, but the timing of such approvals will be key to moving projects forward.

Utility Interconnection Refusals

Solar developers are already seeing their interconnection applications rejected by the utilities on the basis of the new siting limitations. These rejections arguably do not comply with the terms of the Standardized Interconnection Requirements which only require governmental permits to be obtained prior to construction and operation, but not at the time of application for interconnection.