The annual update to the Value of Distributed Energy Resources (VDER) has seen the Environmental (E) value, which is fixed for 25 years for all VDER projects, increase to $31.03/MWh. The E value was previously set at $27.41/MWh. This increased E value follows the New York Department of Public Service’s (NY DPS) recalculation of the Social Cost of Carbon (SCC). This recalculation process and the resulting increase in the E value are outlined in this document from the NY DPS.
What is the Value Stack Under VDER?
The Value Stack methodology is used to calculate the value of excess energy as part of the VDER program, which was designed as part of New York’s comprehensive energy strategy, Reforming the Energy Vision (REV). The Environmental (E) value noted above is just one of a number of factors taken into account as part of the Value Stack methodology. Below, we have briefly summarized each of these factors.
Energy Value (LBMP): The wholesale energy price (per kWh) as determined by NYISO. LBMP changes on an hourly basis and differs according to geographic zone.
Capacity Value (ICAP): A valuation of how effectively a project reduces New York State energy usage during the most energy-intensive days of the year.
Environmental Value (E): A valuation of the environmental benefit a clean kilowatt hour (kWh) generates for the energy grid.
Demand Reduction Value (DRV): DRV is determined by the extent to which a project reduces the need to make future updates to the energy grid.
Locational System Relief Value (LSRV): LSRV is available in certain locations, designated by the utility, where Distributed Energy Resources (DERs) can provide additional benefits to the energy grid. There is limited MW/LSRV capacity available in each of these designated locations.
The Value Stack methodology is applicable to onsite nonresidential projects greater than 750 kilowatts AC, as well as remote metered projects—including those using a Community Distributed Generation (CDG) configuration.
What Technologies Are Eligible For The Value Stack?
Several different technologies are eligible, including the following:
Solar Photovoltaics (PV)
Stand-alone/Co-located Energy Storage
Certain Types of Combined Heat and Power (CHP)
What is VDER?
The Value of Distributed Energy Resources (VDER) is a mechanism for the compensation of energy created by distributed energy resources (DERs) such as solar. VDER uses the Value Stack methodology, outlined above, to calculate the value of this DER-generated energy.
How Does VDER Work?
Under the VDER program, customers receive compensation via monthly credits. Every month, customers receive a monetary credit from the utility company, which is applied to the customer's bill. The value of this credit is equal to the VDER rate multiplied by the number of kilowatt hours produced by the solar PV system. VDER pricing remains in effect for 25 years.
The Value of Distributed Energy Resources (VDER): Further Reading
YSG has extensively covered the Value of Distributed Energy Resources (VDER) and the Value Stack in the past. To learn more about VDER, check out some of our most popular articles on the topic below:
Go Solar in New York
If you’re interested in New York solar—be it residential, commercial, or community—contact YSG Solar today, call the office at 212.389.9215 or send us an email to learn more. For NY landowners, a solar land lease could be a lucrative option. YSG is currently seeking suitable land in the following counties:
YSG Solar is a project development company responsible for commoditizing energy infrastructure projects. We work with long-term owners and operators to provide clean energy assets with stable, predictable cash flows. YSG's market focus is distributed generation and utility-scale projects located within North America.