Upper West Side Co-op Begins Decarbonization Journey with New Heat Pump Installations

When Tanya Khotin joined the board at her 11-story Upper West Side co-op, she had a mission in mind: Usher in electrification at the 77-unit postwar building. While researching decarbonization strategies over the past few years, she identified how the co-op could shift its domestic hot water production to heat pumps. “This got me thinking we should advance this,” she says. Now, the building has taken its first step toward cutting emissions through electrification by installing heat pumps in the basement to generate domestic hot water, an energy-efficient pivot that allows the co-op to turn off the building’s aging, oil-fired boiler in the summer.

Shaving costs. Before forging ahead, the board needed help to identify the right vendors and navigate regulations. “There are electrical engineering, mechanical engineering and architecture components as well as compliance requirements that are incredibly complex,” Khotin explains. The co-op partnered with the consultancy firm The Folson Group for support. “They quarterbacked the whole process and told us at every point what was going on,” she says. This included increasing the building’s electrical capacity as well as dealing with vendors. The total cost of the heat pump installation was about $399,000, with 50% of this met by NYSERDA and Con Edison incentives. “The project has cost the co-op approximately $200,000,” says Tina Larsson, The Folson Group’s CEO. 

The upgrade to domestic hot water production builds on the co-op’s earlier energy-saving measures, including the installation of motion-sensor LEDs throughout the building. Together, these projects are expected to reduce annual emission penalties under Local Law 97 by around $20,000 starting in 2030. The next step will be replacing the building’s boiler with heat pumps for space heating and air conditioning. Larsson says this will enable the boiler to be decommissioned and steam radiators to be removed. “It will likely be a $2 million project,” she says. 

Money matters. The funding for the building’s past and future decarbonization plans comes from a well-timed refinance of the co-op’s mortgage. “We added finance capacity when rates were below 3%,” Khotin says. Some shareholders have in-window air conditioning units and others have invested in through-wall, so the board will need to figure out how costs will be fairly spread among shareholders. “It’s an important question on how you treat those that already have sunk costs and whether they are subsidizing the others,” Khotin says. 

The Folson Group’s role will conclude once the electrification projects are completed. “Folson charges a percentage of the project’s total cost,” Larsson explains. With an eye on savings, she is recommending the co-op’s accountant to include the energy-efficiency upgrades as a separate line item for shareholders, which will allow them to deduct up to $3,200 annually until 2032 as part of the Inflation Reduction Act.