Foster Arms Co-Op Pioneers Solar Installation with NYCEEC MEG Loan

The Foster Arms is ahead of the energy curve. The 52-unit co-op in Brooklyn’s Flatbush neighborhood is the first residential building to fund a solar installation with a Multifamily Express Green (MEG) loan. The ten-year loan, offered by the clean energy lender New York City Energy Efficiency Corp. (NYCEEC), covers more than 75% of the total project cost of $233,000. In addition to the $178,000 loan, the co-op took advantage of NYSERDA’s NY-Sun program — which offers incentives when buildings work with NYSERDA-approved participating solar contractors — and is expected to snag $35,000 in state incentives for the project, reducing the upfront costs for the co-op to just $20,000. 

Proactive thinking. There were two motivating factors for the upgrades: carbon emission penalties beginning in 2030, and the prewar building’s D energy efficiency grade. “That was a visible marker that we had some work to do,” says former board president Jesse Gerstin, who championed the solar installation. Anticipating the high cost of efficiency improvements and aware that the roof also needed repairs, the board refinanced the co-op’s mortgage in 2021. “We wanted to make sure we had enough capital to pay for the project upfront if we needed to,” Gerstin says.

Then, through the city-sponsored NYC Accelerator program, the board was introduced to NYCEEC’s MEG loan. “It is designed specifically for projects like this and for co-ops and condos,” says NYC Accelerator financing specialist Andrew Chintz. Importantly, the roof upgrades could also be rolled into the MEG loan, a feature not always available through other loans or with equipment lease options. “The MEG was clearly the better alternative,” Chintz says. 

Quick and easy. MEG loans have a relatively simple and speedy application and review process, typically closing in six weeks. “If we are to finance green building projects for condos and co-ops at scale we need a product that is accessible to that market,” says NYCEEC transaction manager Erangi Dias. NYCEEC’s collateral for the loan is the solar equipment, rather than any real estate, which allows for a condensed due diligence process. Even so, the co-op’s mortgage lender may need to approve the loan. This can sometimes cause delays.

Generally the interest rate for a MEG loan is between 6.5% and 7%. NYCEEC offers a discounted interest rate for condos and co-ops referred by NYC Accelerator or the non-profit Solar One. The loan is fully pre-payable and Gerstin says the terms were very transparent, although the loan documents did need some tweaking to accommodate the co-op’s shareholder structure. This was overseen by the building’s attorney. The entire process was completed in just a few weeks. “Compared to the process of refinancing, the MEG loan was far easier,” Gerstin says. 

The solar array is being installed by Best Energy Power and is a net metering plan. This means the panels roll back the energy costs for the building by providing electricity to the common areas. The building is now looking towards heating and lighting upgrades. “We are trying to figure out what we can do that is in budget but also helps cut down costs,” Gerstin says.