The Incentive Game

A good partner is hard to find.

Just ask the board of Parc Vendome in midtown Manhattan. It has spent the past four years making its prewar condominium greener. And it has done that by relying on state-vetted partners to help it navigate a state-sponsored improvement program.

Learning how to get a partner may be an essential skill in the coming years. “Right now, the multi-family performance program is in a period of transition,” says Brian Nieves, a sales representative at Daylight Savings, which is a New York State Energy Research and Development Authority (NYSERDA) partner. “NYSERDA is looking to get away from providing cash incentives.”

What exactly is a NYSERDA partner? And why should you care?

For nearly a decade, NYSERDA has led the charge in the green energy business for multifamily buildings, offering buildings hefty incentives for making improvements that reduce a building’s energy usage. To participate in the programs, buildings must first select a partner that has been approved by NYSERDA. The partner, frequently an engineering firm, conducts an initial energy audit of the building’s systems; helps the building decide which projects to tackle and in what order; vets the work done by various vendors to make sure they meet NYSERDA’s standards; and files necessary paperwork so a building can get the coveted rebates.

Besides dwindling rebates, there are other changes on the horizon. The application process, for example, could change or be phased out. And local utilities will probably fill the incentive void. The state’s Public Service Commission clean energy fund is currently reviewing NYSERDA’s proposal, which includes changes to how the agency operates.

The List

One thing that will not change, says a NYSERDA spokesman, is its partner list. Any building looking to make energy improvements will need a guide who is knowledgeable about the changing landscape. Selecting the right partner could mean the difference between a seamless operation and a quagmire.

“NYSERDA partners are very good at doing clean energy projects,” says Michael Colgrove, the director of energy programs at NYSERDA. “They can help you navigate NYSERDA’s programs, whatever they may look like now and in the future.”

But not all partners are equal and neither are all apartment buildings. A partner who is familiar with large rental buildings, for example, might have little experience handling the delicate politics of a co-op or condo board.

When Parc Vendome first began its energy improvements, it selected the Ithaca-based engineering firm Performance Systems Development. The company conducted a $40,000 energy study of the four-building complex, delivering to the 576-unit condo an in-depth analysis of its property. “It allowed me to really look at the building on a larger scale,” says Brenda Colberg, the on-site Charles H. Greenthal property manager for Parc Vendome.

Performance Systems Development understood NYSERDA’s bureaucracy and was knowledgeable about energy-efficient products. But for all its advantages, the company was based 225 miles away, so Parc Vendome needed a local partner to oversee the day-to-day projects. Finding a New York City partner proved challenging.

“Some of the partners claim to be partners but in reality they have no idea what they’re talking about,” says Colberg. The enthusiasm was there, but not necessarily the know-how. “I didn’t want to be the learning curve,” she says.

Since 2011, Parc Vendome has completed $750,000 worth of energy improvement projects, getting half of the money back in NYSERDA rebates. For many of the projects, Colberg has had to play the role of the local project manager, shepherding specs between local vendors and Performance Systems Development. Unlike Con Ed, which suggested local vendors for a Parc Vendome lighting project, NYSERDA does not make vendor recommendations for the buildings that participate in its program.

“That’s one of the weaknesses of NYSERDA,” says Bradford Winston, who has been president of the board of Parc Vendome for about 20 years. “They gave us information, but they weren’t free with providing us with who might be better for us, who is up to date technically.”

Making the Cut

Not anyone can become a NYSERDA partner. The agency accepts applications from prospective partners every three months. To qualify, an applicant must have experience in the multifamily sector, in conducting audits, and in working and advising on other projects. They have to provide case studies and references. If an applicant is selected, new inductees must attend a daylong orientation session that covers the nuts and bolts of NYSERDA programs. After a new partner completes the orientation, the company is allowed to bring in a single project on a provisional basis. It is closely monitored.

“They really want people who have done energy audits for a long time and have documented savings,” says Lewis M. Kwit, president of Energy Investment Systems.

Matchmaker: Picking a Partner

If a condo or co-op wants to participate in NYSERDA’s multifamily performance program, it must pair up with a partner. Although NYSERDA does not play matchmaker, it does try to streamline the process. Visitors to the agency’s website can narrow down the choices by county, building size and type, and the types of projects the building is considering. With this information, the website delivers a tailored list of potential partners. And this is where the vetting begins: www.nyserda.ny.gov/Contractors/Find-a-Contractor/MPP-Locator-Maps/Multifamily-Existing-Buildings-Partners

In many ways, finding a good partner is much like finding any vendor for a capital improvement project. Is the partner familiar with your type of building? Is the company familiar with the types of projects your building wants to do? Does the company have good references? Above all, a board should have a firm idea of what it wants. If the building has lofty goals to add solar panels and wind turbines, it should seek out a partner experienced with those types of projects.

“The co-op or the condo board needs to really get down to what its objectives are,” says Frank Lauricella, an independent consultant who works with NYSERDA partners. “What are their goals?”

Know Your Building

Different buildings have different cultures. Some have a laundry list of go-to vendors who can overhaul an HVAC system or insulate walls. Others, like Parc Vendome, would prefer a partner who can suggest the right match.

Another thing to consider is financing. Some buildings have deep reserves, but many will have to consider lines of credit, mortgages, or assessments to pay for costly projects. Parc Vendome, for example, paid for its improvements and several other projects with an assessment. But because of the energy improvements, the condo has only raised its common charges once in the past four years.

As incentives dry up, buildings are going to have to reassess why they are undertaking these energy improvements. Is it to meet city goals for energy efficiency? Or is it to reduce maintenance costs? Or does the answer lie somewhere in between? Some members of the clean energy industry argue that the incentives have long been a distraction, directing buildings to the biggest rebate check and not the best long-term choice for an individual building.

“I don’t believe that when you deal with a building that needs to save energy that your driver should be whatever incentive program NYSERDA has at the time,” says Kwit. Instead, a building should make choices that set it on a course for long-term savings. Finding a partner who can help steer the ship can make the difference.