NYSERDA: Unprecedented $135M Proposal to Solarize Low- and Moderate- Income Communities

Part 1 of 2

NYSERDA, the day before Thanksgiving, proposed a remarkable $135M investment to implement its “framework for Solar Energy Equity”.  If fully spent, this commitment would represent a thirty-three fold increase in investment toward LMI projects! – A total of appx. $27M in funding/year over 5 years.[1]  This requested commitment reflects the state’s focus on social equity through the Climate Leadership and Protection Act (CLCPA), also known as the state’s Green New Deal.  The request is a substantial portion of the overall $573M request to the New York State Public Service Commission for expanded solar funding, as discussed below.   

Solar can help preserve multifamily affordable housing, such as this project in the Bronx

Who will benefit from the LMI- dedicated funding?

NYSERDA has identified four important groups that need to be involved in both the development of solar projects and receipt of their benefits:

1) Affordable housing

2) Low-to-moderate income customers

3) Environmental justice communities

4) Disadvantaged communities

These groups will be defined through a process set up by the CLCPA (full text here).

Where will the funding go?

In broad strokes, NYSERDA proposes to use the $135M in funding through five strategic areas:

1. Predevelopment and Technical Assistance 

NYSERDA ran a successful predevelopment grant program from January 2017 through September 2018 that funded 21 projects around New York State.  NYSERDA seeks to revise and expand this program based on lessons learned from the first tranche of funding, including additional assistance early in the predevelopment process.

2. Community Solar 

NYSERDA seeks to scale Solar for All program for low-income households, which provides no cost, guaranteed savings to low-income households for Community Solar projects.  NYSERDA also plans to support community solar through a range of other initiatives in development.  

3. Affordable Housing and LMI Homeowners 

NYSERDA proposes to continue its ‘adder’ incentive program for solar on regulated multifamily affordable housing. Current levels in ConEd territory are .40/watt up to 50kW, which translates to appx. 15% of system cost up to $20,000, and .30/watt upstate and in the Long Island region.  NYSERDA will prioritize funding community solar projects on multifamily affordable housing that target LMI building residents or communities.

4. Solar Paired with Energy Storage 

NYSERDA proposes to provide incentives for solar PV + battery storage projects, which extend climate resilience or financial benefits to LMI residents and affordable housing providers.  NYSEDA also proposes to review opportunities for other property types to generate benefits to low-income and otherwise disadvantaged communities through the joint deployment of solar + battery storage technologies.

5. Solar Deployments to off-set Electric Generating Peaking Units 

NYSERDA is planning to provide financial and technical support for solar + storage projects that can reduce the need and impact of local ‘peaker’ electric plants.  Peaker plants operate while the electric grid is most constrained.  As peaker plants are almost exclusively in environmental justice communities, there are significant environmental health benefits to shutting down or ‘repowering’ these power facilities with clean energy sources.

Stay tuned for the next post, which will provide a more critical examination of how NYSERDA could leverage this funding to impact LMI communities.

[1] NYSERDA requests the ability to commit the funds over 5 years and spend down over a longer time frame, consistent with previous rounds of funding commitments.

Now is the time for New York Affordable Housing Owners to Go Solar

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!