Nick Hvozda, Student, Bard MBA in Sustainability 

New York State Incentives

As of January 2017, the NY Clean Energy Fund (CEF) is the State’s mechanism for funding clean energy activities in the state. The stated goal of the CEF is to Build New York’s clean, resilient, and affordable energy system. CEF is a rate-payer benefits fund and is administered by the New York State Energy Research and Development Authority (NYSERDA). NYSERDA has the authority to invest in any initiative or technology that is considered clean energy, including hydropower. You should monitor the NYSERDA website as you plan your project to identify any forthcoming programs or incentives that apply.

Under the NY Clean Energy Standard, small* hydroelectric generators selling electricity into the retail market can earn renewable energy credits (RECs). This could be an additional revenue stream for your project if you are generating more electricity than you can use on your site.

Federal Incentives

To assist in financing your project, you could also consider applying for a U.S. Department of Energy Loan Guarantee. Loan guarantees are available for qualifying renewable energy projects under the Title XVII loan program and are awarded in response to open solicitations. Up to $24 billion is available in loan authority to help finance innovative clean energy projects.

Previous incentives included the Renewable Electricity Production Tax Credit (PTC). This tax credit, which expired in 2017, applied to qualified renewable energy facilities and allowed the commercial owner of the generating capability to claim a tax credit based on the sale of the generated power to an unrelated third party. The credit was an inflation-adjusted per kilowatt-hour (kWh) rate that was earned by the project over the first 10 years of operation. While the small hydropower credits expired in the end of 2017, there is interest in renewing them.

For additional information on current and future incentives, The DOE Water Power Technologies Office is a good resource to follow. The National Hydropower Association, an nonproft organization that represents the interests of the US hydropower industry, lists their policy priorities and incentives on their website.

Interconnection Standards

The New York Public Service Commission (PSC) regulates the connection of distributed generation facilities to the electric grid through the Standardized Interconnection Requirements (SIR). It will guide you through the process of working with your local utility. This process applies to all systems up to 5 MW generation capacity and has mandated completion timelines to ensure your utility gives your project prompt attention. Systems less than 50kW are eligible for an expedited process. It is important to start early this process early because even the expedited process can take several months.

If your project will require a transmission-level interconnection (and is <20 MW capacity), FERC rules apply. Review the DSIRE page on this topic for more information.

For general considerations and guidance on interconnections, the Department of Energy offers general guidance for connecting renewable energy systems to grid on their website.


*The Hydropower Regulatory Efficiency Act of 2013 amended the Public Utility Regulatory Policies Act of 1978 to define “small hydroelectric projects” as having an installed capacity that does not exceed 10,000 kilowatts


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