New York State PSC approves $518M for resumption of Con Edison Clean Heat program

A request to transfer millions from Con Edison’s collected and unspent funds – along with future authorized electric energy efficiency budgets – into its Clean Heat program was approved last week by the New York State Public Service Commission (PSC).

The Clean Heat Program is a New York State-run program that all major utilities participate in, promoting electrification of space and water heating through incentives provided to contractors and customers related to the installation of air and ground-source heat pumps. Such heat pumps absorb heat from a source and transfer that heat, allowing users to change from heating to cooling as necessary. Con Edison’s version of the program began in March 2020. However, due to rapid growth, the program was likely to exceed its cumulative 2020-2025 savings target and exhaust its budget nearly four years sooner than expected.

“Governor Hochul’s commitment to protecting and enhancing our environment has been steadfast,” Commission Chair Rory Christian said. “The Commission’s actions today will provide for the funding necessary to allow the company to resume processing and accepting Clean Heat Program applications, thereby minimizing market disruption and advancing the State’s building electrification goals and mandates.”

In the interim, the influx of applications caused Con Edison to halt acceptance of new air source heat pump project incentive applications indefinitely, launch a waitlist for all large multifamily, commercial, and industrial ground source heat pumps and limit custom ground source heat pump incentives to a maximum of $1 million per project. However, many called for additional funding so those pauses could be lifted and incentives provided once more.

In addition to the transferred funds, the Commission approved another $100 million for the program and the creation of a continuity funding mechanism. As a result, approximately $518 million is being made available for Con Edison to resume processing applications, along with up to $10 million per month of additional funding to continue operations.