Month: January, 2018
A New Way to Capitalize on Solar Benefits for your Co-op or Condo
If you live in a co-op or condo, you may envy your friends who own townhouses or single family homes because they have roofs on which they can install solar panels. Until recently, most co-op and condo owners had no easy way to directly supply their apartments with solar energy that was generated by solar panels on the roofs of their buildings. However, recent policy changes in New York State have enabled what we call a Solar Co-op. In a Solar Co-op, the power that the solar panels produce can be credited directly to a participating resident’s Con Edison bills.
Why Solar PV?
First of all, we’re talking about solar photovoltaics (PV), which directly convert the sun’s energy into electricity. The technology has been around since the 1950’s and some installed systems have been producing sustainable electricity for close to 40 years! There are no moving parts to these systems and the solar panels come with 25-year warranties. It’s a sound investment with minimal upkeep costs. The technology is overwhelmingly popular, with nearly an 800% growth in New York over the last 5 years. It also became the fastest-growing new energy source in the world in 2016.
Some of our larger real estate clients have even committed to integrating solar into every project when possible. A good friend of ours, Aaron Koffman, Principal at Hudson Companies, once noted a change in opinion from “solar being an interesting idea to solar being a no-brainer.”
Most co-ops and condos have separate electricity meters for common area and in-unit residential accounts. In the past, co-ops and condos could usually only use the electricity generated from the solar PV system to offset the common area consumption. But recent policy changes have enabled what we call a Solar Co-op.
In a Solar Co-op, the power that the system produces can be credited to both common area and individual residential meters, allowing each participating resident to reap attractive financial benefits directly on their Con Edison bills.
So what exactly is the direct value to you, an owner or shareholder of the building that has solar PV on the roof? Since residential electricity rates are higher, a Solar Co-op can increase the savings that a system will generate by 30%-40% compared to traditional common area projects. When combining the right incentives, tax credits, and annual system savings the average payback period for installing a system is 3 – 7 years.
Your Children and Grandchildren Will Thank You
So creating and joining a Solar Co-op is a smart financial investment, but, more importantly, it is a smart investment for the planet. What better way to demonstrate your values and concern for future generations than with a Solar Co-op? Oh yeah, and about those friends who moved to the suburbs – many of them probably found out that they had too many trees casting shadows on their roofs for solar panels to make sense, so you can make them a little jealous, too.
Is My Building a Good Fit?
The first question our clients ask us is, “how do I know if my building is a good fit for solar?” A good starting point is to find out the size of your roof and any surrounding obstructions. Do you have more than 2,000 square feet of available roof space? Is your building the same height or taller than adjacent buildings? Does your roof receive direct sunlight throughout the day? If you answered yes to any of these questions, solar may be a good fit.
If you have always wondered about solar for your co-op or condo, now is the time to ask questions and learn more. Our experts are leaders in the industry and can help determine if solar is a good fit for your building. Please get in touch!
Financial incentives for installing solar PV:
Part of what enables an attractive financial return on solar PV systems are the various incentives that are available to support the proliferation of this environmentally-friendly technology. Bright Power’s team of experts will work through all the complexities with you to make sure that you get the benefits. We’ve given a brief description of the incentives below, but please note these are periodically reduced in value and then removed from the market.
- New York State Energy Research Development Authority (NYSERDA) offers a cash incentive for PV installations
- NY-SUN Program (PON 2112) pays a cash incentive directly to the installer lowering the out-of-pocket amount cost
- New York State Solar Tax Credit is proportional to the cost of a 50kW project
- Federal Investment Tax Credit (ITC) is equal to 30% of the total project costs
- New York City Solar Panel Property Tax Abatement (PTA) offers tax abatements to the property owners that is applied to the property for a four-year period
- New York State Historic Property Tax Credit (HPTC) covers up to $50,000/calendar year/shareholder or the cost of the installation after the NYSERDA cash incentive
With the recent announcement of the tariff on imported solar cells and modules, solar energy has been in the news a lot lately. But what does it really mean and how will it impact you and your projects?
Thankfully, you will barely notice the impact of this tariff on the kinds of projects we do with you. As incredible forward-thinking clients, you know that solar decreases owner-paid utility costs, increases property value, produces clean greenhouse gas-free energy on site, and can add resiliency to the property when paired with storage.
Here are some specific reasons why we’re not too worried about the tariff:
- Solar panels are only one component of a solar project. Even if the full effect of the tariff gets incorporated into our pricing, it would not substantially impact the system’s long-term economic and environmental benefits. The 30% tariff is only on the solar modules and cells, so it would not increase the total price of a project by anything close to 30%!
- A number of manufacturers are petitioning for exclusion from the tariff, including our primary panel supplier, SunPower. Given that SunPower truly does have a unique cell and module design that is higher efficiency than any other (and which already sells at a premium price), they have a good case for exemption. This article from Greentech Media explains why.
- Imported solar panel manufacturers may eat some of the cost of the tariff. We’ve already spoken to manufacturers who have agreed to do so.
How Will This Tariff Impact You?
If you already have solar panels on your building, this will have no impact.
If we are currently installing panels on your building and the panels have already been ordered, your Bright Power account manager will be reaching out to discuss the specific plan for your project.
If we are under contract to install a solar project for you this year, and we haven’t yet ordered the panels, your Bright Power account manager will reach out to share all your options, including potentially expediting the process.
If we aren’t yet in contract, we will not be able to order the panels before February 7, 2018, the date the tariff goes into effect. We still don’t know the true extent of the impact of this tariff and expect to learn more over the next month. We do know that the 30% tariff does not mean a 30% higher cost for your project. At worst, the tariff will end up causing a small price increase that we will do everything we can to minimize.
How We See It
From where we are sitting, this tariff will not aid in the immediate increase in U.S. based manufacturing as it intends. Unfortunately, the media attention is already causing confusion and will slow down the growth of the industry and proliferation of solar. That being said, we fully support the creation of American manufacturing jobs. Prior to their bankruptcy, we used SolarWorld, one of the petitioners in the original trade case, panels. We look forward to the creation of American-made solar cells and modules and will look for ways to include those products when scoping for projects.
Tony Clifford, chief development officer at Standard Solar, may have said it best: “The solar industry is nothing if not resilient, and I’m confident the innovative, tough and resourceful members of the industry will find workarounds to the latest obstacle placed in solar’s path. The Solar Century is here, and not even unfair tariffs will stand in its way.”
We’re proud of the intelligent, passionate, and hardworking people that make up the Bright Power team. Each month, you’ll get a chance to meet one of them, understand how they contribute to the organization, and what makes them excited to come to work every day.
Meet Catharine Brookes, Procurement Analyst.
At Bright Power, our work has a very direct impact on the places we call our homes. Whether it be working in new construction or a retrofit, our work will have lasting effects on a tenant’s comfort, safety, and likely their pocketbook, as we strive to make improvements to the buildings’ heating/cooling, lighting, and water use. Equally, our work supports New York City’s wider sustainability goals of 80 by 50. Bright Power is proactively thinking about how we can make the biggest impact through participation in studies like the Retrofit Accelerator or assisting lenders to devise green loan programs. In that way, Bright Power is always striving. For example, every Thursday, Bright Power brings in inspiring or technical experts in related fields during a company lunch to encourage a dynamic of “continuous improvement” in its employees in the same way that we treat our client’s buildings.
What does all this frigid cold mean for your energy bills?
Last week, natural gas prices were almost 40 times higher than they have been. While that high a price won’t persist, it is reasonable to expect that energy prices are going to be higher than they have been for the last few months.
Want a better understanding of the ups and downs of the energy markets before another blast of arctic cold arrives? Here’s a memo from the desk of Dan Levin, VP Energy Markets, explaining how this recent cold front has impacted markets.
We often hear from our clients that controlling their winter utility costs can be one of their biggest challenges. This past week’s weather and its impact on prices is an excellent example of why they may feel that way. Understanding the ups and downs of the energy markets (and prices) is difficult enough, but when it comes to events like bombogenesis or “bomb cyclones,” things can get really crazy.
In fact, last week we saw energy prices both rise and fall at the same time! Now to be honest and fair, we are talking about two separate “markets”: the national NYMEX natural gas futures market that moves with longer-term expectations and a price for natural gas needed specifically on that day in the local NY market.
On January 4th, the spot price (daily cash price) for NY set new records reaching $175/DTH. Most of our clients contract for fixed price natural gas in New York somewhere between $4.50/DTH to $5.75/DTH, and fortunately for them, they will not be impacted by the recent January price volatility.
You may also notice in the above chart, that seven of the ten highest prices fell within the past three years and coincide with the 2014 polar vortex cold period. All of the peak days in 2014 lead to natural gas utility supply rates of $8 or $9/DTH that winter. That’s what usually happens. Except for last week. The temperature extremes of the past few years coupled with the high demand in the NY market are a recipe for price volatility and the reason all our clients are hedged or have fixed agreements that protect their winter costs and budgets.
At the same time local prices were setting record highs, the futures market dropped. Despite the extreme cold in the near term across the whole US, the natural gas futures contract for February 2018 saw 7.5% price volatility and a daily price drop of 4.7%. While it is unusual to see large market movements like these in opposite directions, it can happen and it did here for good reasons. In short, the prices dropped for February and many of the forward months, because natural gas production has seen large increases over the past few months, changing market expectations. It is also an indication that we may see low prices once the winter has passed and the high natural gas production levels increase natural gas supply.
With clients across the US, it’s important to talk about region-specific strategies. We welcome market discussions with our clients as well as discussions on your specific procurement strategies.
Send any questions to email@example.com.