A Bag of Cash Rebates for Cogen Projects

Ed Ermler is bullish on cogeneration. That’s because he’s an electrical engineer, he’s president of the co-op board at massive Roosevelt Terrace in Queens, and he has seen cogen – a system that turns waste heat into electricity and useful heat – save his co-op more than $300,000 a year in energy bills.

“Almost every project I’ve seen includes cogen because it makes perfect sense,” Ermler says. “It’s one of the easiest things to do, especially with the incentives out there.”

For instance, the Combined Heat and Power Acceleration Program from the New York State Energy Research and Development Authority (NYSERDA) offers a set rebate for particular models of cogeneration equipment, says Dana Levy, program manager for on-site power programs at NYSERDA. “At the moment, we have 141 different approved models and each of them has a dedicated rebate amount,” Levy says. “The incentive is scaled by size. If you put in a larger piece of equipment it will cost more money and there is more of an incentive. However, the incentive is also scaled so that the per-unit rate is greater for smaller projects.”

How does that work? A typical New York City condo/co-op installation might require a 100 kW system, which covers about 250 to 300 units, and gets a standard rebate of $180,000. That typically covers between 40 to 50 percent of the cost.

“We’re offering more money to smaller systems, because the magnitude of savings can be less with a smaller project,” says Levy. The thinking is that if it’s more attractive for smaller-scale projects, buildings will be more likely to come on board. “We want to encourage them to put in the right-sized system for their needs, and to make it cost-effective to do so.”

There’s a bag of rebate money out there. The current round of incentives has a total budget of $60 million, says Levy. About $20 million has been awarded to about 60 cogen projects in Con Edison’s coverage area that are either done or in various stages of completion. Vendors say that another $20 million worth of projects are in talks and likely to come to fruition, leaving the remaining $20 million up for grabs.

Gregg Giampaolo, president of All Systems Cogeneration, says that if boards are ready to move – and if the stars align – he can get a job up and running within about six months. He says some boards are reluctant to consider cogeneration, but he’s not sure why.

“It is a high-ticket item, but the incentives make it work,” says Giampaolo says, who tries to take interested boards to view systems that are up and running. “They want to know, is it big? Is it loud? When they see that it’s about the size of a pool table, a light goes on. I’m sure there is one close to wherever they are, so going and looking at it answers a million questions.”