Let the Sun Shine In: How Grants and Rebates Helped a Co-op Go Solar
Oct. 9, 2014 — With an abundance of low-lying, southern-facing roof space, the 930-unit Georgetown Mews co-op complex in Kew Gardens, Queens, has embarked on a massive solar-energy project that eventually will provide 35 percent of its energy needs. And by even the most conservative projections, it will pay off its full cost in under two years.
How did it get the funding to do this? And can you?
In Georgetown Mews' case, board president Mary Fisher and with attorney James Samson, a partner at Samson Fink & Dubow, had to learn tax codes with the help of Project Development Director Stephen Owen of RGS Energy. The, armed with this knowledge, the board applied for a series of grants and credits.
Opportunity Notices
The first of these was a direct rebate, known as a Program Opportunity Notice, from the New York State Energy Research and Development Authority (NYSERDA) (Sign up to receive notices by email.) For Georgetown Mews, NYSERDA made a crucial commitment of a little over $1 million.
This partly hinges on the property using a NYSERDA-approved contractor, and so the application for this grant must be filed with NYSERDA by what's called a "qualified partner." If you're not working with a qualified partner who has submitted an application on your behalf, you cannot get this grant.
The City's Solar Panel Tax Abatement is granted by the city's Department of Buildings. The request should be made when filing for building permits to do the construction for the solar panels. The application should only refer to the work related to the solar power project, and the request for work permits for this should be segregated from requests for any other construction work.
Even greater benefits can be found within the federal tax code. Samson recognized that the U.S. government's Residential Energy Efficient Property Credit offers 30 percent tax credits for solar power. This must be requested of the IRS immediately upon completion of the system and the beginning of its operation.
Sharing with the Shareholders
If the co-op wishes to pass on the credit directly to its shareholders for their individual tax returns, the co-op must file promptly with the IRS. The credit will apply to the tax year in which the system is put in service. For its solar project, this will come to almost $1.2 million in reduced tax obligations. In rough terms, the tax credit works out to between $850 to $1,500 per resident.
Georgetown Mews then got a further boost from accelerated depreciation schedules. These will provide almost $1.36 million more in benefits.
"In the end, the financial benefits of solar drive an opportunity like this," Owen says. "I always say, 'Solar is the right thing to do, but people do it because it's the smart thing to do.'"
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Adapted from "Power Play" by Jonathan Leaf (Habitat, October 2014)