Energy Retrofits: Rebates to the Rescue

We manage a co-op in Flushing, Sanford Plaza, that has 180 units and was built in 1952. It got a bad energy grade last year, which was really disappointing and opened everyone’s eyes. The board really got concerned, especially with the fines beginning in 2024 for buildings that don’t reduce their carbon emissions. The co-op’s reserves weren’t great. They had done a refi, but they still had only $180,000. So I approached the board right away to tell them about the government incentives, including NYSERDA, for buildings to reduce their energy use. 

They were kind of hesitant at first but then decided to go ahead. So we contacted an energy company, which came in and did a comprehensive audit. The recommendations included insulating the roof cavities, because energy was escaping there like crazy, and replacing the windows, which were over 40 years old and leaking, especially in summertime when people are cooling their apartments and the cold air is escaping. We also decided to replace the boiler and add hot water heaters so the boiler could rest during the summer. And we got all the pipes insulated, because the audit showed we were wasting a lot of energy there.

That’s a lot of projects. The windows cost us $506,000. The new roof insulation was $26,000, the new boiler was $178,000 and the hot water heaters were $73,000. Insulating the hot water and heating pipes was over $48,000. Also, the new lighting that had to be replaced inside and outside of the building — everything is now LED — cost us about $57,000. 

In general, buildings that take advantage of incentives and rebates end up paying about 25% of the total costs. So if we spent $1 million, that means we’d have to pay $250,000. But there were other expenses we incurred that could be part of the incentive program, including doing some brickwork and putting a brand new roof on the garage, which we were going to have to repair anyway. All of that was taken into account. So we ended up spending about $230,000 for $939,000 worth of repairs. That’s the bottom line.

Finding the engineers and contractors and bidding out the projects wasn’t difficult, because everything is available through NYSERDA, which has a list of participating partners available online. So you could actually go and get somebody in your area that will help you with that. We are partnering with HANAC, the Hellenic American Neighborhood Association, which is actually administering these programs with the federal and state governments.

There have been a lot of moving parts with all these projects, but we are almost done. All the work was completed, and we are waiting for Con Edison and the Department of Buildings to actually do their leak tests on the gas piping and let us get our use permits.

And we’re starting to get a real indication of the reduced expenses on energy. I was just looking at the Con Edison bill for light and power for last December, which was $2,700. Five months later, the bill was down to $1,500. But our energy is running the same as before and the boiler is running the same as before. The expenses for lighting also went down dramatically. We are expecting to recover our investment in about five years. Without the incentives, it would have taken us 20 years.

Since we only had to pay 25% of the total costs out of pocket, we didn’t have to raise maintenance or impose assessments on shareholders. We used $90,000 from the reserves. So we still have another hundred thousand or so, and we are putting money aside little by little and replenishing the fund. Shareholders are happy. The takeaway for other boards is that they need to know about these incentives. The money is there, and they should go for it.