Perch raises $30M from Nuveen to expand access to community solar savings for all Read >

New York Community Solar Policy Guide for Asset Owners & Developers

Everything you need to know about New York's current community solar legislation, eligibility rules, crediting mechanism, and other important market details, created by Perch’s internal policy team. We help asset owners navigate the growth of community solar in markets across the country, and as new laws are considered and passed, Perch will provide updates and perspective on how it impacts your business.

If you're a New York resident or business owner looking to save money with community solar, visit our "Community solar in New York" page.

1. New York’s Community Solar Program

New York is the single largest market for community solar with 1.274 gigawatts (GW) of installed capacity across nearly 800 projects as of the final quarter of 2022. Earlier that year, it was the first and only state in the country to achieve 1 GW of deployed community solar capacity. The success of community solar in in New York is owed to a mature and well-structured program design with a successful Utility Consolidated Billing (UCB) option, mostly predictable incentives, and widespread support and involvement from the program administrator and regulators– though like any program, not without its hiccups.

On the heels of the 1 GW achievement came an order by the New York Public Service Commission (PSC) in April 2022 expanding the NY Sun program. The order authorized nearly $1.5 billion in additional funds to administer and incentivize a total of 10 GW of solar of all types in support of the state’s 70% renewable electricity by 2030 goal, an increase from its previous 6 GW goal.

Since virtual net metering was enabled in 2011, the New York market evolved rapidly with a formal community solar program—called the Community Distributed Generation (CDG) Program—coming online in 2015 by issue of the NY PSC. The New York State Energy Research and Development Authority (NYSERDA) manages the CDG and the Megawatt (MW) Block Incentive program through NY Sun. The MW Block Incentive program provides a dollar-per-watt incentive for installed capacity as a rebate. The first program, a net metering compensation method, was replaced by the Value of Distributed Energy Resources (VDER) tariff in 2019 which determines the rate at which projects are compensated based on when and where those projects provide energy to the grid. This approach has been lauded for its innovation and has high visibility in other states as they shift towards community solar.

New York has also prioritized the participation of low-to moderate-income (LMI) subscribers in its community solar program both through specific adders for majority LMI-serving projects and the Solar For All program. The MW Block Incentive program and its suite of adders, the VDER compensation rate, and soon the tax incentives made available via the Inflation Reduction Act, have made the Empire State the kingpin of community solar.

2. Program & Project Specifications

Project Requirements

  • 5 MW AC maximum project size
  • 25-year program length
  • 10 subscriber minimum
  • At least 60% of the project generation must be made up of mass-market “small” subscribers (non-demand metered subscribers or subscribers with less than 25 kW of annual average demand)
  • No single subscriber can take up more than 40% of project capacity
  • Minimum subscription size of 1,000 kWh
  • Subscriptions cannot exceed 100% of a subscriber’s annual kWh electricity usage
  • Subscriptions are not transferable and cannot be ported from one utility territory to another
  • Subscribers can only subscribe to one solar farm

Program Details

Incentives are assigned to three regions – New York City, Upstate, and Long Island – and then further divided into blocks with a certain number of MW assigned. Projects are awarded incentives on a dollar-per-watt basis, meaning as the size of the system increases, so does the rebate. Additionally, the incentive per watt is scaled so that smaller projects have a higher rebate than larger projects, but there is typically a greater overall capacity allocated per block to larger projects in the program.

As each block is filled, the base incentive declines. Incentives are available on a first-come, first-serve basis and are dependent on DC nameplate capacity. Incentives are not awarded until projects achieve an approved status.

As of October 2022, the MW Block Program has run out of funds for the Long Island region, but the program is active in the New York City and Upstate regions. Refer to the ConEd Dashboard and the Upstate Dashboard for the most recent data on block capacity and incentives for those respective regions.

Region System Category System Size Cap (DC)
New York City/ConEd Residential Less than 200 kW
  Small Non-Residential 0 to 200 kW
  Medium Non-Residential 200 to 1000 kW
  Large Non-Residential Greater than 1000 kW
Upstate Residential 25 kW
  Non-Residential 750 kW
  Commercial/Industrial 7.5 MW

3. Low-to-Moderate Income Rules

As of Q1 2023 NYSERDA is revising the Inclusive Community Solar Adder (ICSA) and is not accepting applications. The requirements below reflect the proposed changes issued on August 2022 and updated on March 14, 2023. After further stakeholder feedback the incentive is expected to reopen by Summer 2023. Refer to the ICSA incentive dashboard for the most updates to the adder.

The NY Sun program has two ways of serving LMI-subscribers: the use of adders, primarily through the Inclusive Community Solar Adder (ICSA) to incentivize LMI-serving projects, and Solar For All. ICSA is intended to provide bill savings to LMI subscribers, affordable housing, and other facilities serving disadvantaged communities like non-profits. Solar For All serves the same subscriber segment except those subscribers enroll with NYSERDA directly. Projects receiving ICSA must ensure LMI subscribers receive a minimum discount of 10% on community solar credits.

  • Projects must allocate between 40% and 100% of its project capacity to eligible residential and affordable housing LMI subscribers
  • At least 50% of the project’s ICSA capacity must be comprised of residential electric customers

LMI Eligibility Rules

Residential ICSA Eligibility

  • Categorical Eligibility: Subscriber eligibility is demonstrated by documented participation in one of the assistance programs listed in the Program Manual.
    • EmPower New York Award Letter
    • HEAP Award Letter
    • HEAP or Energy Utility Assistance listed on the utility bill
    • SNAP Award Letter
    • TANF Award Letter
    • Supplemental Social Security Income Award Letter
  • Geo Eligibility: Subscriber eligibility is demonstrated by residence in an Interim Disadvantaged Community (DAC). Use this interactive map to identify areas that meet these interim criteria.
  • Affordable Housing Residential Eligibility: All residents of a regulated affordable housing property can be deemed eligible if the property:
    • meets the eligibility requirements of the NY-Sun Multifamily Affordable Housing Adder,
    • residence is limited to LMI households (80% AMI or below),
    • and participation in CDG will not result in any increased cost (e.g., rent or common charge increase) for the residential subscriber due to the utility allowance mechanism or other policies or practices.
  • Individual Household Eligibility: Any residential subscriber is considered eligible if they have a documented household income under 80% of Area Median Income (AMI) or 80% of State Median Income (SMI), whichever is higher.

Non-residential ICSA eligibility

  • Affordable Housing: Nonresidential demand and non-demand accounts serving an eligible affordable housing property (i.e., building/common area meter).
  • Nonprofit/public facilities serving DACs: Accounts serving nonprofit organizations or public facilities that:
    • meet the criteria of small subscribers,
    • and are located within and serve a designated DAC

4. Compensation Rate, Incentives, & Credit Mechanism

The Value Stack, or VDER, compensates projects based on when and where they provide electricity to the grid and compensation is in the form of bill credits. This is determined by:

VDER Value Description
Energy Value, or Locational Based Marginal Price (LBMP)  The current wholesale price of energy changes hourly. Number of generator bidding in the market, cost of fuel, amount of renewable generation, and energy demand impact LBMP.
Capacity Value (ICAP) Based on how well a project reduces statewide peak energy consumption.
Environmental Value (E) The value of how much environmental benefit a clean kilowatt-hour brings to the grid and society. The E value is locked in for 25 years. Projects can take a non-monetizable REC instead.
Demand Reduction Value (DRV) Determined by how much a project reduces the utility’s future needs to make grid upgrades. DRV is locked in for 10 years.
Locational System Relief Value (LSRV) LSRV is available in utility-designated locations where DERs can provide additional benefits to the grid. Each location has a limited number of MW of LSRV capacity available. The LSRV is locked in for 10 years.


The Long Island region also uses the Value Stack but has a few differences. Refer to the NY Sun program page for details.

Each utility files a monthly statement that includes actual monthly ICAP rates, DRV rates, and the current LSRV capacity remaining per substation. Refer to the Value Stack Statements, Data, and Rates section of NYSERDA’s webpage for up to date and historical values for ICAP, DRV, and LSRV Value Stack fields. Use the Solar Value Stack Calculator to estimate project value or see historical values.

Adder Incentives

Prevailing Wage Adder: Developers are required to pay prevailing wages or enter into project labor agreements for construction activities associated with project development and installation. All solar projects that had their initial utility interconnection application submitted after April 14, 2022, and that are greater than 1 MW AC are subject to this requirement and are eligible for this adder.

  • Con Edison Nonresidential projects will receive $0.20/W DC
    • Will be paid out in the same manner as the base incentive: 100% payment at project completion.
  • Upstate Commercial/Industrial will receive $0.125/W DC
    • Will be paid out in the same manner as the base incentive: 50% at project completion, 25% at first anniversary of completion, and 25% at second anniversary of completion

Community Adder: This adder is available to projects that did not qualify for the Community Credit (CC) or the Market Transition Credit (MTC), the Community Adder’s predecessors. It is available in areas that have fully exhausted their CC tranches. The Community Adder has been fully allocated for the Upstate region and has been paused for the NYC/ConEd region. Refer to the Community Adder Dashboard for updates or new block availability. This incentive is $0.07/Watt.

  • Available to nonresidential and commercial/industrial in the ConEdison and Upstate utility territories, respectively
  • Projects in the PSEG-Long Island service territory are not eligible for the NY-Sun Community Adder
  • An initial block of 800 MW, later expanded to 1,150 MW

Con Edison Rooftop Canopy and Parking Canopy Adder: This adder is available to projects in the Con Edison territory installed on either rooftop (capped at 25 kW per project) or parking canopies to increase siting opportunities in the highly urbanized NYC region. The adder is $0.20/Watt.

Landfill/Brownfield Adder: This incentive is intended to encourage solar development on otherwise undesirable land versus agricultural or other greenfield uses. This adder is available for sites identified as landfill or brownfield by a site registry number from the NYSDEC, EPA, or with attestation from the Authority Having Jurisdiction if unlisted in the site registry.

Projects eligible for this adder may also receive the Community Adder and ICSA. This adder is mutually exclusive to the Multifamily Affordable Housing Incentive. The incentive is $0.15/Watt.

[PAUSED] Inclusive Community Solar Adder: This adder is paused and under revision by NYSERDA. While the structure of ICSA detailed here has a high probability of being implemented, the ICSA 2.0 guidance has yet to be finalized. This document will be updated once NYSERDA officially releases ICSA 2.0.

To be eligible for the ICSA, a project must allocate between 40% and 100% of its project capacity to eligible residential and affordable housing LMI subscribers. At least 50% of the project’s ICSA capacity must be comprised of residential electric customers.

Payment of the ICSA is based on a project’s actual performance in serving LMI subscribers, with higher payments for projects that successfully allocate a higher percentage of project capacity to eligible subscribers.

Credit Details

Hosts of community solar projects can bank unallocated credits for up to two years after which they are lost. During that period, hosts can allocate banked credits to new or existing offtakers. Once a customer closes their utility account, unused credits are returned to the host.

Utility Consolidated Billing Option

Since the state mandated UCB in 2019, it has been easier for customers to enroll in community solar by simplifying the billing process so that customers see their savings directly on their utility bill. The UCB option additionally lowers costs for community solar providers by lowering the cost to acquire customers. However, this system is imperfect.

At present, all customers on the project must be receiving the same credit discount with the exception of one customer account effectively meant for large offtakers, or anchor customers. Anchor customers may have multiple utility accounts for various reasons making the UCB option sometimes untenable.

NYSERDA requires standard UCB subscribers to have a minimum discount of 5%. For ICSA 1.0 projects, NYERSDA established a higher minimum discount of 10% for LMI subscribers. Projects must select a consistent discount across UCB projects. Customers with exceptions to the project’s established discount rate cannot be billed through the UCB option.

Without being able to utilize UCB for multiple discount types, LMI minimums become more difficult to administer. It is worth highlighting that there is considerable dialogue with the program administrators and stakeholders about the limitations of the UCB option, and progress has been made toward amending its mechanics.

5. Market Analysis

NYSERDA is currently revising its program, specifically as it concerns two of its adder incentives: the Community Adder and ICSA. With the passage of the Inflation Reduction Act, many states are rapidly enabling or expanding their community solar programs with a view to incentivizing projects that serve LMI subscribers. As of March 14, 2023, NYSERDA has updated the proposed ICSA 2.0 design with feedback solicited in 2022. This follows guidance from the IRS that was released in early 2023 in the desire to conform the updated ICSA as neatly as possible with federal requirements.

ConEd is one of the largest utilities by customers served in the country, much less the largest in the state. Because solar farms may only serve customers in their respective utility territories, this has made community solar development in the NYC region more difficult since space to build is limited, though not insurmountable. This challenge is aided by regionally specific incentives like a parking canopy adder. As of the first quarter of 2023, the Upstate region has the most deployed capacity in the state, though plenty of MW remain available.

Electric utilities and their territories

National Grid NY

  • 1.6 million customers
  • Territory includes 450 cities in most of upstate New York including Albany, and western New York in the Erie-Niagara region

Consolidated Edison (ConEd)

  • 3.5 million customers
  • Territory includes all of New York City and most of Westchester County

Orange & Rockland (ORU)

  • 232,593 customers in NY
  • Territory includes the northwestern suburbs of New York City

New York State Electric & Gas (NYSEG)

  • 907,000 customers
  • Territory includes various parts of upstate NY: the Southern Tier and Finger Lakes, parts of the Adirondacks, Catskills, and eastern border of the state
  • An Avangrid company

Rochester Gas & Electric (RGE)

  • 385,925 electricity customers
  • Territory includes the nine-county region centered on the City of Rochester with an exclave in western NY
  • An Avangrid company

Central Hudson Gas & Electric (CHGE)

  • 309,000 electricity customers
  • Territory includes the mid-Hudson River Valley, south of Albany

PSEG Long Island

  • 1.1 million electricity customers
  • Territory includes Nassau and Suffolk counties

6. Appendix

Utility Territory Map

ny-electric-utility-territorie 1.png


Other state community solar policy guides from Perch



Get matched to a local solar farm and save on your electricity costs.