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Anaerobic Digester Gas-to-Electricity Rebate and Performance Incentive

Local Government
Tribal Government
Maximum Rebate 

Total Incentive: $2 million (combined production and capacity incentives)
Fixed Base + Capacity Incentive: varies, limited to the total maximum incentive of $2 million minus the applicable performance incentive

Program Info
Funding Source 

RPS surcharge; NYPA

Expiration Date 


New York
Program Type 
State Rebate Program
Rebate Amount 

Fixed Base Incentive: varies
Capacity Incentive: varies
Production Incentive: $0.025/kWh production payment for new systems for up to 10 years (estimated using a capacity factor of 75%)

New York State Energy Research and Development Authority

Note: This program is not currently accepting applications. Check back for updates regarding future solicitations.

The Anaerobic Digester Gas-to-Electricity program is designed to support small-sized electricity generation where the energy generated is used primarily at the electric customer's location (third-party project ownership structures are permitted). Interested parties should note that it combines both an up-front incentive for new installed capacity and a performance-based incentive for energy production. The program has been classified as a rebate program because program details suggest that the bulk of incentives available for a given project will take the form of an up-front payment based on new installed capacity.

Customer eligibility is generally limited to those that that pay the RPS surcharge on their electric bills (i.e., customers of the state's major investor-owned utilities). The electricity generated under the program will be counted towards the Customer-Sited Tier (CST) portion of the state RPS. The current program authorization extends through December 31, 2015, but the recent project solicitation under PON 2684 has an application deadline of January 31, 2013. A total of $57 million has been authorized to fund incentive payments through 2015 (annual budgets range from roughly $10 - $13 million), limited to $1 million per Anaerobic Digester Gas (ADG) system. Under PON 2684 the maximum incentive has been increased to $2 million using funding from the NYPA. The total funding available under PON 2684 ($28.6 million) reflects the 2012 and 2013 program budgets authorized by the PSC and an additional $5 million from the NYPA. Only new systems of at least 100 kW that use dairy farm waste or dairy product processing waste for at least 50% of their feedstock input are eligible for funding under PON 2684.

Eligible system size is limited to either: (1) the capacity eligibility limit on farm based electricity generating equipment under New York's net metering law which is currently set at 1 megawatt (MW), or (2) the customer's approximate Peak Connected Load. The peak load limitation may be adjusted if NYSERDA determines that public benefits or practical considerations argue in favor of a higher limit. In order to participate in this program, applicants must comply with all program rules, procedures, and eligibility requirements, submit all required forms and supplemental documentation, and enter into a Standard Performance Contract Agreement with NYSERDA. Applicants must also adhere to measurement and verification requirements throughout the term of the Agreement.

The total incentive available under PON 2684 includes several elements. The capacity based incentives include distinct incentives for both the digester and generator components of a system, as well as certain additional system components or capabilities. In summary, the available incentives are as follows (see PON 2684 for further details):

  • Fixed Capacity Incentive: Ranges from $12,500 - $100,000, depending on the type of equipment being employed
  • Variable Capacity Incentive: Ranges from $125/kW - $2,000/kW, depending on the type of equipment being employed.
  • Performance-Based Incentive: $0.025/kilowatt-hour (kWh) on up to 10 years of estimated electricity production using a 75% capacity factor.
  • Additional Component Capacity Incentives: Available for systems that employ higher quality biogas clean up measures, have grid upgrade costs exceeding $100,000, have black start capability, are designed to accept significant quantities of food waste, have contracts with institutional sources for acceptance of food waste feedstock, or employ cooperative group management services with at least two other digesters. These incentives include a fixed and variable component.

For projects that receive federal funding (e.g., a 1603 Treasury Grant), the capacity incentive will be reduced by 50% of that additional funding. The total capacity incentive (fixed plus variable) is limited to the maximum available incentive of $2 million minus the performance incentive. NYSERDA will pay up to 10% of the total calculated performance incentive in the form of an annual payment during each of the first 10 years of the performance period. The percentage paid in a given year is determined by the ratio of actual electricity production compared to the total contracted generation.

NYSERDA counts the environmental attributes associated with energy production by funded systems towards the state RPS target for the life of the system. For further program details, including application materials and information on additional requirements, visit the program web site listed at the top of this page.

Other Information 

Under the current solicitation, only new systems are eligible for incentives