Sometimes magic happens when the alternative collides with the mainstream. On Monday, Sirius XM subscribers experienced this when Howard Stern, perhaps the most controversial broadcaster of all time, held a town hall with Billy Joel, a recent winner of a Kennedy Center Honor. (Full disclosure: I enjoy both Stern and Billy Joel.) The program was neither the traditional interview nor performance, but thousands -- maybe millions -- benefited.
Recently, political developments in New York State suggest a similar collision, mixing the alternative, in this case renewable energy sources, with the mainstream -- the traditional utility structure -- and millions of New Yorkers stand to benefit.
A century in the making
In a recent press release, Governor Andrew Cuomo announced bold initiatives which he sees as helping to usher the state and its energy needs further into the 21st century: "For more than 100 years, the generation and distribution of electricity in New York has been largely unchanged, but today we're taking a giant step from the status quo and leading the way on energy modernization."
Adding to Gov. Cuomo's announcement, Richard Kauffman, Chairman of Energy and Finance for New York, said, "New York is moving to a more market-based, decentralized approach with how it shapes energy policy."
Regarding the adoption of renewable energy sources, New York is hardly a leader in the adoption of renewable energy sources, The Reforming Energy Vision initiative affords utilities the opportunity to "manage and coordinate a wide range of distributed resources, or generate electricity from many small energy sources and link them together."
One billion reasons to bask in the sun
Addressing New York's revamped approach to its energy needs, Gov. Cuomo recently announced a $1 billion commitment to the NY-Sun Initiative, an initiative that, among other things, is expected to result in a "sustainable, subsidy-free sector." Speaking to this, New York's Public Service Commission, or PSC, is looking "to drive market penetration on a large-scale basis" by providing "long-term, stable funding over a 10-year period to support photovoltaic (PV) projects throughout the state." Launched in 2012, the NY-Sun Initiative has led to 316 MW of solar capacity installed or under development.
Encouraging the adoption of solar solutions by the residential market, the state has allocated $3.5 million for consumer education effort on the benefits of PV systems -- including direct ownership, solar leases and power purchase agreements.
A leader in the residential solar market, SolarCity (NASDAQ:SCTY.DL) stands to benefit substantially from this new policy direction. In January 2013, the Long Island Power Authority granted SolarCity the opportunity to offer its services to Long Island customers.
Since then, SolarCity has achieved enough success to more than triple its Long Island staff and to warrant the opening of an 18,000 square foot facility in Hauppauge which the company says "quadruples SolarCity's Long Island footprint." Looking beyond Long Island, there is still substantial market opportunity; SolarCity doesn't operate in nearly 50 counties in the rest of the state.
SunPower (NASDAQ:SPWR), one of SolarCity's main competitors, may also be looking to take advantage of the Empire State's renewed interest in renewable energy. Recently, it signed a deal with Google to help provide financing to $250 million worth of residential solar lease projects. This isn't the only major deal that SunPower has made this year in an attempt to compete in the residential market. In January, the company paired with Bank of America to provide $220 million in financing to the solar leasing market. Chuck Boynton, SunPower's CFO, praised the deal in saying that, "The SunPower Lease program allows customers to have best-in-class, high efficiency solar on their rooftops, with highly competitive terms."
More than just solar
Energy storage is also of great importance to New York. In a separate statement, Gov. Cuomo announced the opening of the $23 million Battery and Energy Storage Technology Test and Commercialization Center in Rochester. The center "provides unique testing and validation services needed to bring new battery and energy storage technologies to the commercial market."
According to an Economic Impact Study commissioned by the state, "the energy storage sector currently employs approximately 3,000 people in New York State and is responsible for more than $600 million in annual global sales. The study found that the sector could grow more than 11,400 new jobs in New York by 2020 and 43,000 new jobs by 2030."
Further demonstrating the importance which New York sees in the energy storage market, the Metropolitan Transportation Authority, or MTA, will be sponsoring a two-year demonstration of a vanadium battery module which was designed to help manage the organization's energy use. American Vanadium Corp. will be providing three of its battery CellCube modules for the project. three 30-kilowatt/130 kWh modules that can produce a total of 390kWh, or enough energy to power 15 to 30 homes.
Foolish final thoughts...
New York has its work cut out for itself. According to the state's Renewable Portfolio Standard, it must obtain 30% of its electricity from renewable energy sources by 2015. At the end of 2013, renewable energy sources accounted for 23% of the state's generated electricity. SolarCity and SunPower are just two of what will surely be many renewable energy companies that will benefit from the efforts of New York and other states to meet their Renewable Portfolio Standards.