The End of the Solar Affordability Exemption for All New NYC Roofs

A Canopy System in NY source: PV Magazine

In October 2019, New York City Department of Buildings passed Local Law 92 & 94, requiring either green roofs or solar PV on a wide range of NYC buildings. This includes all new buildings, new roofs resulting from enlargement of existing buildings, and existing buildings replacing an entire existing roof deck or roof assembly. The Law provides an affordability exemption until November 15, 2024. After that date, affordable housing will be subjected to the same requirements as the rest of NYC buildings’ stock. As a result of that change in regulation, HPD will no longer require Solar Feasibility Analysis (Solar Where Feasible) on new construction projects as of July 1st, 2024.

Local Law 92/94 Requirements 

If you are an affordable housing developer or provider, you will need to comply with LL92 and 94 by the end of 2024 by implementing a “sustainable roofing zone” on your roof, 100% of which must be a solar photovoltaic electricity generating system, a green roof system, or a combination of both.  Some roof areas may  be exempted from this required sustainable roofing zone. For example, areas required to be set aside for setbacks, access by FDNY, or are occupied by obstructions or recreational spaces will be exempt. Moreover, pitched roofs that accommodate less than 4 kW of solar electricity generating capacity or cannot withstand additional weight of a sustainable roofing zone are exempted. 

Additionally, depending on your roof slope, there are specific requirements as outlined down below:

Compliance path for sustainable roofing zone pursuant to LL 92 and 94 of 2019       source: NYC DOB

The Solar Opportunity in NYC

Despite the end of the affordability exemption, installing solar panels in New York City represents a tremendous opportunity for your properties:  

1. Energy Savings and Long-term Financial Benefits

   In many cases, we are seeing short payback periods thanks to local, state, and federal incentives.  The Inflation Reduction Act is offering a 20% tax credit bonus for properties covered by a federal affordable housing program and NYSERDA is providing $1.60/Watt grant for affordable housing. Moreover, there is a 30% property tax abatement for NYC properties. The NYC incentives’ landscape makes investing in solar highly valuable to ownership and their tenants. 

2. Green Electricity and Energy Security

   Investing in solar means reducing the use of fossil fuel energy and avoiding price hike energy costs. Your building’s common charges can be offset by your solar system, creating benefits to your properties and participating in its resiliency efforts. 

3. Canopy System

   In 2023, the city of New York passed the City of Yes amendment altering its building code and allowing that 100% of a roof be covered with a canopy system. Canopy systems are the most efficient solar systems, can easily cover your whole common electricity usage, and provide rooftop shade. A building can maximize its efficiency and improve common use spaces when used together with a green roof.

How can we help? 

At Crauderueff Solar, we have years of experience helping affordable housing providers install solar panels. The current incentives’ landscape makes investing in solar energy highly valuable to your tenants and community. We are determined to help you structure your project to achieve the highest level of benefits to your property!

Funding Energy Justice for Brownfields and Fossil Fuel Transitioning Communities

Image Source: Reuters

The Inflation Reduction Act (IRA) provides a 10% tax credit bonus to solar projects located in “energy communities”. Low-income communities, Communities of Color, and Indigenous communities have long been forced to live near pipelines, coal plants, and refineries associated with the production of dirty fuels. These communities have historically relied on this industry to make a living but have also suffered severe health problems. A just energy transition thus requires public investments to provide geographically targeted economic benefits to regions that face challenges associated with a reduction or cessation of fossil fuel activities. This is the intent of the Energy Community Tax Credit Bonus.

How does the Federal Government define an Energy Community?

1. Established Brownfield Community

• The site was previously determined by federal, state, territory, or federally recognized Indian tribal brownfield resources to meet the definition of a brownfield site: property “complicated by the presence or potential release of hazardous substances, pollutants or contaminants”. 

• A Phase II Environmental Site Assessment (Phase II) has been conducted at the site and confirmed the presence of a CERCLA pollutant, contaminant or hazardous substance.

• For projects with a nameplate capacity of less than 5 megawatts of AC current, a Phase I Environmental Site Assessment (Phase I) has been completed at the site, (but does not explicitly require that a pollutant, contaminant, or hazardous substance be found during the Phase I.)
  

2. Fossil Fuel Employment Area

• An area where 0.17% or greater direct employment or 25% or greater local tax revenues are related to the extraction, processing, transport, or storage of coal, oil, or natural gas and; 

• Has an unemployment rate at or above the national average unemployment rate for the previous year. 
  

3. Coal Closure Communities

• Has had a coal mine closed after 1999 or;

• A coal-fired electric generating unit has been retired after 2009. 

Is my Property in an Energy Community? 

The federal government has developed two different maps to determine whether your property has already been assessed as a brownfield community or if it is located in one of the two remaining categories (Fossil Fuel Employment and Coal Closure communities). The process is straightforward: you only need to fall into one of these three criteria to be eligible for that tax credit bonus which is stackable with other tax credits.

For example, let’s take a look at New York State. This energy community tax credit bonus is most prevalent in the northern portions of upstate NY as seen in Syracuse, Ithaca, and Niagara County. All three of these communities suffer economic impacts due to coal closures making them eligible for this tax credit bonus. 

When can I claim the Energy Community tax credit bonus?

If a solar project begins construction in a location that is an Energy Community as of the beginning of construction date, the location will be considered an Energy Community on the placed in-service date. This ensures that if you decide to invest in one of these communities, you will not be affected by census tract changes between the beginning of your construction and when the project is placed in service. Once your project is placed in service, then you can claim your tax credit bonus during your annual tax return.

Finally, don’t forget that this tax credit bonus is stackable with other tax credit bonuses such as the Low-Income Community tax credit bonus. If you need more information about this specific program, check out one of our latest blogposts. 

How Does Snow Impact Solar Electric Generation in the NYC Area?

As snow slowly covers the roofs of New York, you are probably wondering what is the impact of snow on solar panels? Well, it is not as bad as you might have thought!

1.     Solar panels still produce electricity when covered by snow.

It is only when heavy snow accumulates that solar PV generation cannot occur. According to the U.S. Department of Energy, as long as there is a light coating of snow, light is still able to reach the panel. Moreover, climate change is reshaping traditional expectations of winter weather, as demonstrated by this seasons lack of snow in NYC.  

2.     Solar panels can melt snow.

Without a consistent snowstorm, snow melts quickly on solar panels. When sunlight is absorbed by the dark silicone cells and a section of the panel is exposed to the sun, the heat spreads across the entire panel, causing the snow to melt. Combined with the steep angle and slick glass surface of solar panels, snow frequently does not interfere with solar panels for more than a few days. Additionally, when snow melts away, the anti-soiling properties of snow offer a free cleaning service!

3.     On a yearly basis, snow doesn’t significantly impact your financial returns.

Even though snow and less sunshine may reduce your electricity generation during winter, it’s trivial when considering the benefits you can achieve with your solar array during summer. In New York, thanks to net metering and VDER bill crediting, you can be financially rewarded from excess summertime electricity generation that you send to the grid, minimizing your energy savings losses during winter.  Any solar production model should include the possible losses from snow, ensuring these impacts are accounted for from the start of your project.

The Big New, Low-Income Solar Tax Credit

Photo Credit: Quest Solar

As we begin the new year, we want to share with you a major new opportunity. Capacity remains for certain affordable housing providers, and property owners in designated low-income areas, to realize a 10% to 20% *bonus* Federal income tax credit – in addition to the base 30% tax credit value.  If you’re interested in learning more, including how non-profits may benefit, read on!

The Low-Income Communities Bonus Credit Program, debuting on Oct 19, 2023, is an important provision of the Inflation Reduction Act. This program offers a 10% to 20% increase to the solar Investment Tax Credit (ITC) – above the base 30% tax credit value - for eligible projects, totaling 1.8 GW per year. The Department of Energy heralds this program, open to 1.8 gigawatts of solar annually, as “the most significant tax incentive in U.S. history” to drive cost-saving clean energy initiatives in low-income communities, fostering economic growth in historically underserved areas.

Who Can Still Apply
For this program, the DOE has multiple categories of low-income projects.  The program capacity dashboard shows there’s substantial remaining capacity for projects meeting the below selection criteria, in addition to projects in Indian land. While most other categories are over-subscribed, two categories still accepting applicants are:

• Category 1 – 10% tax credit bonus: Solar projects Located in Low Income Communities, meeting certain additional selection criteria

• Category 3 – 20% tax credit bonus: Qualified (Federally regulated) Low-Income Residential Building Projects, meeting certain selection criteria

Act Now to Secure Your Spot
As of January 22, 2024, only 44% of the available capacity has been filed. There is still 162 MW of capacity that remains available and is waiting for your application. If your property falls within one of the above categories, now is the time to submit.  There are several eligibility requirements for existing capacity, including projects in very low-income areas and non-profit ownership of projects.  Applications are currently being accepted on a rolling basis. Nonprofits are eligible for a direct payment, where the IRS writes a check for the value of the tax credit.

Crauderueff Solar is Helping Organizations Access this New Bonus
These below case studies show how Crauderueff & Associates has helped both faith based organizations and low income housing providers take advantage of this recent incentive boost.

• In 2019, Catholic Charities Progress of Peoples Development Corporation (CCPOPD) launched the Laudato Si Corporation, a non-profit special purpose entity dedicated to advancing environmental sustainability and climate resiliency by generating renewable sources of energy and revenue. In our capacity as Owner’s Representative, we helped Laudato Si apply for the 20% tax credit bonus for 12 of its buildings which all participate in a federal housing program. Moreover, as a 501(c)(3) organization, Laudato Si was able to apply through the additional selection criteria category which makes it highly likely to receive this bonus for its portfolio.

• The University Neighborhood Housing Program applied for the 10% tax credit bonus for its multifamily portfolio composed of 7 properties, all located in a low-income community. Similar to Laudato Si, UNHP as a non-profit organization applied through the additional selection criteria category and will likely receive this tax credit bonus.