Boards Need a Guide in the Renewable-Energy Jungle

Is your co-op or condo board thinking about installing energy upgrades, such as solar panels or a cogeneration system? If so, you’re going to need help navigating the dense thickets of technology, building and fire codes, tax incentives, and government grants. Boards should engage an energy consultant or a Building Performance Institute-certified energy auditor, whose first step will to pick the so-called “low-hanging fruit” – switching to LED lighting, adding insulation, sealing cracks that allow drafts, and upgrading your energy-control system, among other measures. 

While this is going on, the energy professional will be investigating which cash incentives and tax breaks might be available. He or she will then assemble a spreadsheet or other document with the estimated base cost – the so-called “sticker price” – and deductions for various incentives and for the estimated lower energy prices the building will pay. 

“Each building is different,” says Lewis Kwit, president of the consultancy Energy Investment Systems. Sometimes, it’s not easy to get into certain spaces to install equipment, he says, so you need to do some limited demolition. But such costs are not directly related to the green upgrade itself and might not be reimbursable. 

If the ballpark estimates suggest you might be able to swing a solar or cogen project, your next step is to have your energy professional help you prepare a proposal for a contractor. 

“Work with a contractor who not only has experience in installing the type of project you’re contemplating but also experience in working with the New York State Energy Research and Development Authority and Con Edison,” advises Jay Merves, an executive with the nonprofit New York City Energy Efficiency Corporation. The contractors should be familiar with the incentives those entities offer. The energy professional generally serves as project manager for such an undertaking and will file the paperwork for incentives and coordinate payments. 

The available incentives change periodically, and tax breaks can differ between condos and co-ops. A co-op, for instance, can pass its tax credit through to most shareholders, who individually can file for it on their income-tax returns (the exception could be lower-income shareholders, such as retirees, who may not make enough for the credit to matter). 

Determining the source of the upfront money – the reserve fund, an assessment, or a loan – will affect how you proceed. The New York City Retrofit Accelerator can point you to vetted lending partners specializing in energy-saving projects. “There are organizations that will do a project for a condo or co-op at no upfront cost and then charge them for power produced,” says Merves. “These are called power-purchase agreements. A number of companies do that. An energy-service agreement is another way: you get charged based on the amount of energy you save.” 

Power-purchase agreements are a staple of Green Street Solar Power. “We will invest all the capital to build the project and sign a long-term agreement with the customer to provide them power at a defined contract rate,” says co-founder and president Jason Kuflik. 

Despite all these options, and despite the energy savings that will eventually pay back the cost of upgrades, many boards are hesitant to go forward. Such resistance may begin fading as new blood infuses co-op and condo boards. Observes Kuflik: “We’re seeing a new generation of people having more awareness and more of a drive toward energy-efficiency and solar.”