A New Way to Finance Solar Power

Manna from heaven. Does this sound too good to be true? A co-op or condo building needing extensive repairs on its aging roof gets the work done free, enabling it to install solar panels on the roof, which nets a property tax abatement and slashes electricity bills. And it’s all done without putting out a penny.

Quick thinking. That, believe it or not, is exactly what happened at one co-op in the Bronx, thanks to a new program begun by the solar developer Urban Energy in response to dwindling state credits for the city’s community solar program. Under the original setup, a developer installed solar panels, and the energy they generated was fed into the Con Edison grid; Con Edison then issued credits to subscribers of the community solar array, reducing their electricity bills without any upfront outlays. “Last fall the value of those credits was slashed by more than half, which made the old business model untenable for many installers,” says Russell Wilcox, Urban Energy’s founder. “We came up with a new model.”

Plugging in. Instead of linking its solar arrays to the grid, Urban Energy ties the systems directly into a building’s apartments. “We become the utility, and residents pay us instead of Con Ed, which means we get full value for the energy being generated,” he explains. That revenue allows Urban Energy to foot the bill for needed roof repairs. That’s not the only windfall for co-ops or condos: they also get a sizable reduction in property taxes spread over four years for investing in solar panels and can receive a lump-sum payment upfront from Urban Energy for its 25-year lease of the building’s roof.

Payback time. The revenue generated by solar arrays allows Urban Energy to recoup the costs of both roof repairs and installation. “And of course we’re giving back 10% of that revenue to residents in the form of reduced energy bills,” Wilcox says.  “We’re the only people offering co-ops and condos this model, which lets them still reap the benefits of solar power even as the old community solar program fades into the sunset.”