Prevailing Wage & Clean Energy in NY: What Labor Law §224-d Means for Developers & Contractors

Performing construction in New York’s clean energy market? As New York’s clean energy market matures, developers and contractors are encountering a growing set of labor standards. One of the most important, and increasingly relevant, is Labor Law §224-d, a statute that applies prevailing wage requirements to certain renewable energy projects. This blog focuses specifically on §224-d and how wage standards are evolving in the state’s clean energy sector.

How Has Labor Law §224-d Changed?

New York Labor Law §224-d is a state statute that requires construction workers on certain renewable energy projects to be paid prevailing wages, even if the projects aren’t traditional “public works.” In 2022, New York passed legislation, Assembly Bill A.9598 and Senate Bill S.8648, that amended Labor Law §224-d to expand the definition of a “covered renewable energy system.” These bills lowered the system size threshold from 5 megawatts to 1 megawatt or more and clarified that REC procurement by or for a public entity is sufficient to trigger prevailing wage requirements. This expansion significantly broadened the law’s reach, especially for mid-size clean energy projects.

What Triggers Labor Law §224-d?

As amended, Labor Law §224-d requires that workers on certain renewable energy projects be paid prevailing wages, as determined by the New York State Department of Labor (NYSDOL). But unlike traditional public works laws, §224-d is tailored to clean energy and applies when:

1. The project involves a renewable energy system of 1 megawatt or more, and
2. The project includes the procurement of renewable energy credits (RECs) by a public entity (or a third party acting on its behalf, such as NYSERDA).

If both conditions are met, the project is considered a “covered renewable energy system” and prevailing wage requirements apply under Article 8 of the Labor Law.

How Labor Law §224-d Growth Affects Developers and Contractors

According to NYSDOL’s July 2024 enforcement guidance, distributed renewable energy systems (like community solar) that are 1 MW or larger (Climate and Community Protection Act, A.9598/S.8648, 2022) and transfer RECs (Renewable Energy Certificates) to investor-owned utilities will now be considered “covered renewable energy systems.” This is because, under a 2025 Public Service Commission order, those RECs will ultimately be purchased by NYSERDA — a public entity whose involvement, even indirectly, is enough to trigger prevailing wage requirements under §224-d.

In other words, once NYSERDA becomes the end buyer of those RECs, regardless of the project’s funding source, the project is treated as publicly supported for labor compliance purposes.

This means that many mid-size projects entering construction in 2025 are now subject to prevailing wage, even if they aren’t directly funded by public dollars.

Who is Affected?

• Developers of solar, wind, thermal, or offshore wind supply chain infrastructure
• General contractors and subcontractors performing construction work on qualifying systems
• Project teams working with NYSERDA or other public REC procurement programs

Even if your project is privately financed, it may still fall under §224-d if RECs are sold to a public buyer.

Prevailing Wage Responsibilities

Under New York Labor Law Article 8, including §224-d, contractors and subcontractors working on covered projects must:

• Pay workers the prevailing wage and supplemental benefits for their specific trade and locality.
• Maintain certified payroll records showing hours worked, job classifications, and wages paid.
• Post the wage schedule at the job site in a visible location.
• Cooperate with audits or investigations by the NYS Department of Labor (NYSDOL) or, in NYC, the Comptroller’s Office.

These requirements apply to laborers, mechanics, and tradespeople.

Exceptions to the Law

The Bureau of Prevailing Wage shall not enforce the prevailing wage requirements of §224-d when:

• The project was solicited, contracted for, or work began, prior to October 1, 2021
• The system has a capacity between 1 and 5 megawatts and was solicited, contracted for, or work began prior to July 5, 2022
• The system has a capacity of less than 1 megawatt and is not a thermal energy network
• The construction work is performed under a labor peace agreement, project labor agreement, or an enforceable agreement between an owner or contractor and a bona fide building and construction trade labor organization.

Conclusion

As clean energy construction expands across New York, prevailing wage requirements under Labor Law §224-d are increasingly shaping project planning and execution. With more mid-size systems now falling under its scope, especially those involving REC procurement by public entities like NYSERDA, contractors and developers must remain diligent in identifying when the law applies, understanding the appropriate prevailing wages, and maintaining proper records to stay compliant throughout the build.