The New Solar Economics

Nancy Wiesenfeld was intrigued. A self-described “environmentalist and conservationist,” she had heard about the potential of solar energy and asked the property manager of the Grand Plaza, her 79-unit, pre-war co-op in Brooklyn’s Prospect Heights neighborhood, to gather information from a solar installer. Nothing came of it. Later, while attending a meeting about the city’s Retrofit Accelerator program, Wiesenfeld asked if anyone had any information about solar energy. She was given a link to the Here Comes Solar (HCS) website, an initiative that’s run by Solar One, a city-based non-profit environmental education and workforce training organization.

She contacted Solar One, and suddenly, “things started happening very quickly,” says Wiesenfeld, a retired copy editor for book publishers who, although no longer a board member, continues to serve as her co-op’s treasurer. “They asked for our electric bills, then they came up with a proposal for roof-mounted panels, estimates of cost and generating capacity, and the yearly savings on our electric bill. Then I started asking questions. When I had all the answers, I put it in order and sent the proposal with a letter to the board.”

The seven board members liked what they saw. Under Here Comes Solar’s proposal, the initial cost of $240,000 would be defrayed by a 20 percent abatement on the co-op’s city property taxes spread over four years; in addition, shareholders would receive individual credits on their state and federal income taxes totaling $132,000, which amounts to $13 per share. The co-op’s $24,000 annual Con Ed bill for the common areas and the two elevators would be cut in half. The system, according to HCS’s estimates, would pay for itself in about 15 years – or less, if energy costs continue their relentless rise.

How to pay for it? Rather than imposing an assessment, Wiesenfeld suggested that the board dip into the co-op’s $1 million reserve fund, which has been fed since 2005 by a monthly charge of 60 cents per share. “Assessing people to get the money back quickly didn’t make any sense,” Wiesenfeld says. “Besides, there may be shareholders who won’t benefit from the income-tax credit because they’re retired, and they can’t pay an assessment.” The board agreed unanimously and then laid out the plan to shareholders at a meeting in late summer – just four months after Wiesenfeld went into action.

Let the Sun Shine In

With the highest energy costs in the continental United States, New York City would seem like fertile ground for people like Wiesenfeld to explore alternative sources of cheap energy. And, increasingly, it is. Consider the recent rise of solar power. A decade ago, there was one megawatt of solar power operating in the city. Today, thanks to high energy costs, the declining cost of solar installations, and the abundance of grants and incentives, that number has mushroomed to about 80 megawatts, enough to power more than 21,000 city residences. An additional 2,844 solar projects are currently in the works. While many of the early adopters have been small homeowners, solar proponents are now pushing hard to sign up multi-family dwellings, including co-ops and condos.

“We’re at the tipping point,” says Laurie Reilly, communications director for Sustainable CUNY, the leading implementer of solar initiatives in the city and state. Sustainable CUNY was founded a decade ago to help eliminate the barriers – physical, financial, and bureaucratic – that once prevented New Yorkers from harvesting the sun’s energy. “We’ve gone beyond the early adopters,” Reilly adds. “Everyone does it for a different reason, and now we’re moving into the mainstream, where people want to lower their energy bills and feel like they’re contributing to a better world. People are shocked to find that the payback time can be just five to seven years, depending on the size of the insallation.”

Sustainable CUNY has built a comprehensive, user-friendly website for the Department of Energy called the New York Solar Map and Portal (see box, p. 21) that can educate co-op and condo boards about costs, tax breaks, financing options, and reliable installers. The site allows users to type in the address of any of the one million buildings in the city and get an immediate reading on solar energy’s viability for that particular property, including roof area, sun exposure, and shadows caused by trees, buildings, and other obstructions. The city map was rolled out in 2011 and recently expanded to include all of New York State.

Strength in Numbers

One factor in solar’s rise in the city is the growing army of facilitators – organizations that put homeowners together with installers and help negotiate the dense thickets of red tape, including filings, tax breaks, and other incentives. Chris Neidl is the director of Solar One’s HCS initiative, which is working to expand on its success with owners of one- to four-family homes and break into the vast – and still largely untapped – multi-family market.

“In New York City,” Neidl says, “most of the solar [work] is taking place at single-family homes on Staten Island and in smaller residential buildings in Brooklyn. The challenge now is to figure out how to make solar work for the predominant housing arrangement we have in the city – multi-family buildings with flat roofs. That’s our mission.” With 72 contracts signed in Brooklyn, HCS is turning its attention to lower- and middle-income neighborhoods in central Brooklyn and Manhattan that would especially benefit from reduced energy costs, including West Harlem, Hamilton Heights, and the Lower East Side. These areas have been targeted because, in addition to their limited income levels, they have an abundance of flat roofs, high rates of owner-occupancy, and a dearth of solar panels. Neidl is working to get several clusters of neighboring limited-equity co-ops to join the program by the end of this year.

“The formation of groups of buildings is important for two reasons,” says Noah Ginsburg, HCS’s multi-family program manager. “You get more competitive pricing [on installations], and there’s a greater sense of comfort in a collective decision. People don’t want to walk alone into the unknown. Also, solar energy reinforces what affordable housing is all about.”

Watching the Meter Run Backward

Maybe the best way to understand how the process works is to walk through it with someone who has been there. Meet Kendall Christiansen, a self-employed consultant who is also manager of the New York City chapter of the National Waste and Recycling Association. He lives in a handsome, two-story townhouse, part of a set of 1910 rowhouses in the Lefferts Manor Historic District, east of Brooklyn’s Prospect Park. “Through my consulting work, I’ve had contact with Solar One over the years,” Christiansen says, “and when I heard that they were beginning to organize solar groups, I jumped at that. We helped organize a group in this immediate neighborhood. We have a very active LISTSERV neighborhood network, so it was easy to put the word out.”

Christiansen and his wife, Carol Shuchman, a LEED- certified real estate consultant, hosted two informational meetings in their home in the spring of 2015, at which HCS staffers made presentations and answered questions. After the meetings, seven neighbors within a half-mile radius signed up to begin the process. At no charge to homeowners, HCS staffers then made on-site visits, inspecting the buildings, reviewing past Con Ed bills, and assessing the viability of solar for each property. Low-cost financing options were reviewed, energy capacity and cost savings were estimated, and designs were drawn up. A bid document was sent out to several installers, which the group then interviewed. All agreed that Quixotic Systems was the best fit.

Christiansen’s roof was in need of major work. Since solar installers recommend that roofs have at least 10 years of life left – and since most solar panels carry a 25-year warranty – Christiansen did a roof replacement before the solar installers showed up. The 60-foot roof could accommodate 21 LG panels, each about 3 feet by 5 feet, but there were still hoops to jump through, including compliance with fire and building codes and approval from the Landmarks Preservation Commission. This is where a facilitator can make a crucial difference. “What’s great about Solar One,” says Christiansen, “is that they hold your hand through the entire process – dealing with bureaucracy, dealing with contractors and electricians – every aspect. It can be maddening, and it could stymie even the most committed person. Here Comes Solar made that go.” Just as important, HCS, which helps installers negotiate the filings and paperwork, also learned about a little-used Historic Homeowner’s Rehabilitation Tax Credit.

In rough numbers, the cost of installing the 21 panels on the roof was $35,000. After receiving a grant of $5,000 from the New York State Energy Research & Development Authority (NYSERDA), Christiansen tapped into a home-equity line of credit, which put up $30,000. Here’s where the math gets interesting. Taking advantage of local, state and federal tax credits, as well as abatements on his property taxes, Christiansen’s net cost came down to just $10,000.

The sailing wasn’t entirely smooth. “Kendall is a classic example of someone who had problems along the way,” says Angelica Ramdhari, HCS’s project manager for one- to four-family residences. “The biggest problem was the timeline. The installer had promised they would have everything done by the end of 2015 so Kendall could take advantage of the tax credits. I had to intervene to put pressure on the installer, and we managed to get Con Ed to sign off by the end of 2015.”

The system was up and running by the end of January. Christiansen watched, amazed, as his electric bill went from $300 to $60 a month in the winter, then down to zero. (He still pays $18 a month in fees and taxes.) He was generating more electricity than he was using – which, under the system known as “net metering,” means the surplus electricity will go into the Con Ed grid and be deducted from his future electric bills. It’s like putting money in the bank. "We love watching the electric meter run backwards!” Christiansen says. “If we save $3,000 a year, it’ll take less than four years to recoup our investment. For us, this was a no-brainer, and it’s a reminder that we’ve done something good for the environment.”

In January 2015, there was one home in Lefferts Manor generating solar energy. Today, thanks largely to HCS’s group program, there are 25. It is one of the densest concentrations in the city. Meanwhile, over at the Grand Plaza co-op, Nancy Wiesenfeld is feeling a sense of satisfaction similar to Christiansen’s. “I’m very excited about it,” she says. “It’s been gratifying to have something happen so quickly – something where I feel I’ve made a contribution that will make life better for the people in this building. It’s a case where individuals can make a difference for the environment.”