Three key lessons from the Enterprise solar training
How can New York affordable housing owners get smart solar deals for their existing portfolios? Earlier this month, Crauderueff joined experts at a training hosted by Enterprise Community Partners, with a panel of colleagues from Enterprise, NYSERDA and the RiseBoro Community Partnership, to guide more than twenty non-profit housing stakeholders through solar deal structures.
40kW Solar System, Unique People Services project, Bronx, NY.
Photo Credit: Crauderueff
Advancing solar because it’s a ‘good idea’, or because NYC Local Law 92 will require solar on affordable housing in the next few years, is not enough. In the eyes of the panelists, a smart solar deal achieves meaningful economic and community rewards, minimizes time and effort, and mitigates risk.
Rob Crauderueff, CEO, Crauderueff, Provides Technical Assistance to Affordable Housing Providers
Photo Credit: Crauderueff
Three learning lessons for non-profit affordable housing provider emerged from the training:
1. Mission-Aligned Community Solar can benefit affordable housing providers
Community solar is developed at no cost to housing providers by a third party, who finances, owns and operates the community solar system. In turn, a range of benefits can be provided. Panelists noted community solar can be a smart deal structure for housing providers, given there are meaningful economic benefits, no financial costs, relatively little time required, and minimal risk.
Mission-Aligned Community Solar Benefits
Mission-aligned community solar providers can provide up to five benefits in the New York City market:
1. Up-front payment to property owner
2. Roof lease payment
3. Risk-free discount on property common area electric bills
4. Risk-free discount on bills to low-income tenants
5. Free roof upgrade
From a partnership perspective, a mission-aligned solar development partner is experienced working with the New York affordable housing, familiar with investor/lender approvals, expert in New York community solar practices, and will own the assets in the long term.
An ideal mission-aligned partner may also bundle larger and smaller projects, given the range of rooftop (and therefore solar system) sizes of most New York City affordable housing portfolios.
Esther Toporovsky, Enterprise Community Partners, Leads the Affordable Solar Training
Photo Credit: Crauderueff
Community Solar Opportunities for Upstate New York Affordable Housings
In Upstate New York, affordable housing providers can subscribe to projects without the need for developing solar on their properties. Subscribing to a community solar project is an easy way for affordable housing providers to generate significant savings.
2. Direct ownership by non-profit affordable housing providers may not be ideal
This lesson may seem counter-intuitive to housing providers. After all, the affordable housing community has grown from decades-long efforts to achieve community ownership and control of land use assets. However, in the New York City area, the economic return, relative to the time, effort, and risk, does not justify direct ownership in most cases. As a case-in-point, we heard from RiseBoro, one of the most forward-thinking non-profits in the country when it comes to anything green. RiseBoro is developing solar on its portfolio while creating a solar tax credit partnership, to own and operate their own solar projects. They noted the time and cash required to develop the project do not weigh favorably in comparison to other, more traditional affordable housing development activities RiseBoro is undertaking.
It’s worth noting this lesson relates to retrofit projects; ground-up projects that can leverage low-income housing tax credits along with solar investment tax credits can make a lot of sense for a housing provider to develop and own directly.
3. Now is the Time to Go Solar
The solar industry is at ‘peak solar incentives’ in New York State – funds which are passed along to the customer in a 3rd party ownership structure. NYSERDA presented and led a discussion on incentives at the training. Time-sensitive incentives include the following:
· Federal incentives, worth appx. 50% of project costs, reduce annually starting January 1, 2020
· New York State incentives, worth roughly 20% of project costs, and utility-based incentives for community solar, reduce in ‘tranches’ as solar projects are built
· The NYC Property Tax Abatement, worth appx. 15% of system costs, expires after the 2020 tax year
To help housers leverage these incentives, NYSERDA is about to launch a second round of predevelopment grant funding for affordable housing providers to develop solar on their portfolios. Now is the time to go solar!