Problem Solved: Shifting Gears When the Solar Game Changes

As part of our ongoing Problem Solved series, Habitat spoke with Russell Wilcox, founder and chief executive at Urban Energy.

Riding the solar coaster. There are always changes in the solar industry. They call the industry, as a joke, the solar coaster, like a roller coaster ride with new programs coming in and new subsidies.

In 2017, the city came out with the Community Solar program. Its focus was providing energy savings to renters and low- to moderate-income people. It was a great idea that made it easy for contractors to plug their solar arrays directly into the grid and then sell off credits to individual people who wanted to subscribe to the system. And then we would provide 10% electricity savings to subscribers.

All good things must come to an end. So it was a great program. It went till about October 2021, and then the city basically said, “We think we're going to go in a different direction. We're going to change the subsidies.” Our business is focused on multifamily buildings in the Bronx, Brooklyn, Queens and upper Manhattan mostly, and we knew that there was a lot of value in the electricity from the solar arrays we were putting on buildings. So now we’ve gone back to an old-school way of feeding solar electricity directly into people's apartments, versus putting it into the grid, which generated sort of virtual credits. Under Community Solar, the electricity could be sold to anybody in the city.

Behind the Meter. Now we're installing a system in the University Heights section in the Bronx, a six-story co-op with 185 units. It was built in 1955, so it’s postwar but definitely on the older side. We're going to be one of the first projects like this in New York City, where, instead of using the Community Solar program, we're using what we call Behind the Meter — feeding the solar power directly to people's loads, as opposed to dumping it into the grid.

We'll sell the electricity at a 10% discount to whatever the building’s residents are paying Con Edison. There'll be some cases when the solar power actually generates more electricity than an individual apartment is using. It puts that energy back into the grid. They call that net metering, and it spins the meter backwards. The Bronx building as a whole, we estimate, will see roughly $7,000 in total reduced electrical costs annually.

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A long-term lease. We design the system, we pay for it, we own it, and then it becomes very straightforward. For the building, it's just signing a 25-year lease at $10,000 a year and then reaping the benefits. In some cases, if the roof is aging or in need of repair, Urban Energy will pay upfront to repair or replace the roof, reducing or eliminating the lease payments. The cost for us to build the Bronx system is roughly $600,000, but there are a lot of rebates and things from the federal, state and city governments that help us subsidize that cost a little bit. The Bronx building, for example, will receive a $150,000 tax abatement spread over four years.

Think about us like we're another tenant having our system on the roof. So we come in, make sure the roof is in good condition. We'll figure out exactly how many solar panels we can fit, how much weight or attachments we need to put in the roof. In this case, we don't need to put any attachments. It's all weighted down with cinder blocks.

Problem solved. It's nice to know that the solar panels are powering your apartment, as opposed to it being more of a virtual experiment. It's actually a little bit easier to understand when the solar's directly tying into people's apartments. The challenging thing is when programs change, you want to make sure people fully understand how the deal works. If we can help with that as opposed to just coming in saying, “We want this roof space,” then we're actually solving a problem. And that’s great.