LIPA to Spend $14.4 Million on Efficient Energy Programs
By JOHN
RATHER
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
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
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
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.
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