News & Insights

Building a local, sustainable energy economy for Sullivan County

Last updated on November 14th, 2018

Solar energy is an integral component of Governor Cuomo’s “Reforming the Energy Vision” initiative, which seeks to transform New York State’s energy economy by 2030, and Sullivan County is at the forefront of this transformation.

In particular, Sullivan County is home to several Community Distributed Generation (CDG) projects, each in various stages of planning and development, which will allow us to produce and use clean, renewable power right here.

What is Community Distributed Generation (CDG)?

In a nutshell, CDG is a system that allows local residents and small businesses who are not able to site renewable energy production facilities on their own property to get their energy from off-site solar facilities.

Based on their electric usage, residents and small businesses subscribe to a percentage of the facility’s output. The facility generates electricity and offloads that power back to the grid. Customers who sign up receive credits which are distributed through their NYSEG bill, and these credits reduce the subscribers’ electricity charges.

So in effect, CDG allows the public to buy locally generated power from renewable sources at a discount while offsetting its carbon footprint at the same time.

How is the IDA involved?

The IDA recognizes the importance of transitioning to a more renewable, sustainable, and independent energy economy, so in December 2016 the IDA adopted a Community Distributed Generation Tax Exempt Policy to assist in the development of CDG installations.

Since that time, our Board of Directors has approved five projects – two in the Town of Delaware, two in the Town of Thompson, and one in the Town of Liberty.

All five of these projects are being developed by Delaware River Solar. With offices in New York City and Callicoon, Delaware River Solar is a solar development company working to build dozens of CDG facilities throughout the NYSEG and RGE electric service territories. As with all IDA tax exempt policies, the CDG policy offers a mortgage tax abatement, sales and use tax abatement, and partial real property tax abatement for qualifying projects.

What sets the CDG policy apart is that municipalities receive more revenues than they would, if CDG projects were built without IDA involvement. Under New York State law, CDG facilities are entirely exempt from payment of new real property taxes for a fifteen-year period. In contrast, through the IDA program, projects make an annual payment in lieu of taxes (PILOT) to the IDA for twenty years.

Each year the IDA distributes the entire PILOT payment to the County, the host town, school district, and village (if applicable).

So, with IDA involvement, CDG projects contribute more to the municipalities’ coffers than they would if the IDA were not involved.

(The exception is that any municipality may opt out of Section 487 of the New York State Real Property Tax Law, which provides the fifteen-year exemption on all new real property taxes. In this instance, a CDG project would not realize a real property tax abatement.)

So how does this help the companies building the CDG projects?

CDG project developers, and their lenders, prefer the certainty and simplicity of an IDA agreement that sets forth the estimated PILOT payments to be made over a twenty-year period. The additional costs in the form of PILOT payments are outweighed by the ability to more accurately predict expenses over the lifespan of the solar  installation.

In addition, the IDA provides CDG projects an exemption from local sales and use taxes for any goods and services purchased to construct a CDG project. (Most of these expenses are exempt from state sales and use taxes under New York State law.)

How does all of this help Sullivan County?

The IDA’s program helps our municipalities by providing payments in lieu of taxes that they would not otherwise receive. It’s important to note that any municipality can develop its own PILOT program, and some local municipalities are doing just that. But the IDA’s program is designed to provide the maximum financial benefit to all taxing jurisdictions where a CDG facility is located.

And IDA assumes responsibility for administering the PILOT agreement, calculating and disbursing PILOT payments, and complying with any applicable rules and laws.

While the IDA strongly supports this type of solar development, we recognize and respect variations in local policy.

Thus, we will not entertain any applications from projects located in municipalities that have opted out of Section 487 of the Real Property Tax Law as described above. Moreover, we require that each CDG project application include a letter from the host town, affirming its support for the project.

Our program also helps Sullivan County residents. In return for the incentives we provide, CDG projects must commit to offering local preference to Sullivan County residents wishing to buy their electricity, and they must provide that electricity to local customers at a discounted rate of ten percent less than the utility company’s default rate.

More broadly, our program is designed to stimulate Sullivan County’s transition to a sustainable energy economy. Delaware River Solar, the developer creating the Sackett Lake Solar Farm in the Town of Thompson, estimates this project will serve almost 800 households, resulting in a total savings of $1,380,000 over 20 years for those customers.

It will also reduce greenhouse gas emissions – equal to the carbon emissions of over 1,000 cars per year, or over 544,000 gallons of gasoline consumed per year.

The Sackett Lake Solar Farm is just one of many planned CDG projects in development in Sullivan County, which will have a significant cumulative impact on our economy, our health, and our environment. Sullivan County really is at the forefront of reforming New York State’s energy vision.

The County is a certified Climate Smart Community, designated by the Department of Environmental Conservation, and a Clean Energy community, designated by the New York State Energy Research and Development Authority.

Leaders and staff at the county and municipal levels have made a commitment to local, sustainable energy, and the IDA is proud to be a part of their efforts.

You, too, can make this commitment by signing up to get your power from local Sources. For more information on the CDG projects working with the IDA, or to sign up to get your power from these local sources, please contact Delaware River Solar at 845-397-0134 or visit www.delawareriversolar.com.

BY JENNIFER M. FLAD, EXECUTIVE DIRECTOR SULLIVAN COUNTY IDA