New York's Cooperative and Condominium Community

Habitat Magazine Business of Management 2021

HABITAT

ARCHIVE ARTICLE

Follow the Sun

 

Gregory DL Morris, a freelancer, writes frequently on business matters.

 

After a few years in eclipse, new energy solutions are surging via solar power.

The sun also rises – and with it comes the long-simmering promise of solar energy. Science-fiction writers have often dreamed of homes fueled by nature’s rays, but there was frequently less science and more fiction behind the idea. But now, solar energy may be ready for the boards of at least some cooperatives and condominiums to consider. Because there are still significant restrictions on the levels of subsidies available, on the tax credits allowable, and on the size of the installations, smaller buildings are the most likely candidates to become sun worshippers (a few large luxury buildings have been built with solar-power systems, but there have been no retrofit projects begun in the city; several are being planned, however).

Thanks to the restrictions, industry professionals report that they get many inquiries, but no commitments, from co-ops and condos. However, there are separate efforts underway on many levels to change those limits. As a result, solar-energy advocates and equipment installers say they are very enthusiastic about the near-term potential of solar power for co-ops and condos.

There are two basic types of solar-energy systems for residential buildings: one to generate electricity and one to heat water. In solar-generated power, silicon wafers similar to those in light-powered pocket calculators are built in panels on the roof. This is called a photovoltaic (PV) system. In solar hot-water systems, the water is run through small tubes in trays designed to concentrate the rays of the sun.

There are no limits on solar hot-water systems, but roof space often permits them to be used only by smaller buildings. The two most common collection pans are 3 feet by 7 feet or 4 feet by 8 feet and several must be installed. For PV, standard panels are 2.5 feet by 5 feet. Again, several must be installed. Each panel generates about 200 watts, so a 1 kilowatt array would take a little more than 60 square feet. A 10 kilowatt system with all its equipment could require close to 1,000 square feet. (Each installation is custom-designed, and can vary in total area. Larger systems require more support structures and additional equipment beyond just the panels.)

For PV systems, state law currently limits the size of systems because of the two-way connection to the delicate city-wide electrical distribution grid. That connection is called net-metering. When it was originally implemented, the law was considered progressive but is now in need of revision, according to solar-energy advocates.

Still, the major impediment to PV systems for most co-ops and condos is that they are not eligible for most of the tax credits that can cut the total out-of-pocket costs for a typical installation by more than half (see box, p. 8, for sample costs, subsidies, and tax credits). A 1 kilowatt system is enough to power 10 100-watt lightbulbs. So, a 10-kilowatt system, the current limit under state law, is enough to power the common-area lighting for a 10-story building. Fluorescent lighting takes less power; elevators and central air-conditioning take considerably more.

The New York State Energy Research and Development Authority (NYSERDA) offers a substantial subsidy for buildings to install systems that turn sunlight into electricity. Co-ops and condos are eligible for those. Nonetheless, the lack of tax breaks, as well as a handful of other complications and costs, are usually the deal-breakers. Other limiting factors are roof area and roof shade. As part of an evaluation, an installer will confirm if a roof gets the required 80 percent of available sun.

“Co-ops and condos are tough,” says Anthony O. Pereira, president and CEO of altPower, an alternative energy installer. “We get a lot of first-time interest, but mostly what we have done are small systems for single penthouse units.” Pereira adds that his firm is in contract with several co-ops around the city for building-wide systems, but declined to provide any details until a project gets final approval.

“In general, we try to go to Con Ed first,” adds Pereira. “We want to know what they are willing to do with a specific building and what they are not.” From there, altPower works back to configure a system for the building. Most recently, the firm provided the built-in system for Millennium Towers, a new condo being completed at Battery Park City. “Overall, there are really positive things happening in PV. There are good people at Con Ed and there are good people at NYSERDA. We just stagnated over the past few years and have got to get started again.” (Con Ed refused to comment on net-metering, and referred all other solar-power questions to NYSERDA.)

David Buckner, president of Solar Energy Systems, concurs that two of the major impediments to PV applications at co-ops and condos are the low limit on net-metering and the lack of tax credits, and he adds a third: the J-51 property tax abatement does not include solar installations. He says that his firm has tried to work around the tax credit issue by installing the system under a third-party ownership structure with a fair-market buyout by the building.

The state government realizes it has fallen behind, says Dennis Wilson, president of The Solar Center. He says his firm is “in active discussions with 12 to 16 co-ops right now, but there is nothing firm yet. The main issue is the net-metering limit, but it is a whole new field these days. In the past year or so, we are getting a lot of inquiries from co-ops and condos.”

Wilson says his firm has mostly done hot-water systems lately. There is normally one collector installed per two occupants, each collector costs roughly $2,000 to $3,000. Once permits are in hand, installation can take just a few weeks. He adds that there are federal and state tax credits that can add up to more than half of the cost of the project. “Generally the payback after the tax credits is five to eight years, a shorter time frame than PV.” Wilson says his firm is in discussions with several large co-ops for hot-water systems.

For co-ops and condos considering a PV array, installers say they are sympathetic to the issues that the boards face. “We almost had a huge building,” says John Messerschmidt, director of operations for the Green Building Division of Duce Construction. “It was a 14-story building with two units per floor, all electric, built in the 1950s. There was plenty of need for PV, and there was one champion on the board, and the board actually approved the project. But in that case, the other residents were not as progressive as the board and the building-wide vote was against. For a $16,000 project and a 10-year payoff, I guess they’d rather put in a pool.”

One further complication, he notes, is a new system-testing requirement this year from the city’s Department of Buildings. As of this year, it is requiring all PV systems to be tested by an accredited organization, such as Underwriters Labs (UL). “We now require that the system be tested as a completed assembly,” says Sam Marcovici, senior engineer in the department’s Model Code Unit. “The reason is that while individual components are UL-approved, our inspections of previously installed systems showed that a good number of them were assembled in an unsafe manner. In other cases, they were done in accord with the code but were not filed with this department. Our inspectors stumble over these systems all the time.”

Marcovici says that, far from being an impediment, the testing requirement is doing the owners and the installers a favor. “Too many of these systems are not in service anymore because of faulty installation. Due to their complexity, they need to be tested after installation to ensure they function properly.”

He says owners and installers should request a project approval from the department, including a permit for the structural and electrical installation. “Safe installations promote the market share of PV,” says Marcovici. “And the testing is not expensive. UL has verified to us testing for an average installation is about $1,700. That is not a tremendous burden when the sole purpose is to protect the public.”

Whether net-metering limits protect a fragile power grid is open to debate. “The big news would be a change to the net-metering law,” says Thomas Thompson, president of the board of the New York Solar Energy Industries Association. He is also vice president of Atlantis Energy, a manufacturer of solar panels.

Net-metering is the method of connecting a building that has a solar generator to the electric grid so that power flows to or from the building depending on the demand. The idea of watching the electrical meter spin backwards is exciting, but that only happens rarely, observes Hugo Pedernera, designer and installer at Solar Energy Systems, based in Brooklyn. “On most condos, a PV system won’t cover most common-area electrical loads,” he says. “We can do load studies to see if a building would feed surplus power back to the grid, and can size the system to avoid that. But there will only be a few days in the spring and fall when you get maximum output. In winter, the sunlight is less intense, and in the summer, the pans get hot and that affects output.”

Even with little chance of actually generating excess power, there is risk of damage to the system if it could not feed back to the grid. So a net-metering interconnection is standard. Under the current rules, small co-ops or condos could still benefit from a PV installation, but industry sources say that many boards are waiting to see if there is any change in the net-metering law.

“Currently, the law limits residential installations to buildings with four units or fewer, and to systems of 10 kilowatts or less,” observes Thompson. “When that law was passed, New York was at the forefront of PV. Now, other states have passed us. Governor [George] Pataki pushed for passage of a law like the one in New Jersey that allows any building to install a system of up to 2,000 kilowatts.”

Thompson adds that his organization and a coalition of like-minded interest groups will be holding a series of meetings with elected officials to advance legislation to support solar, wind, and other alternative-energy sources. “Governor [Elliot] Spitzer has indicated that he is favorable.”

The coalition will be using a powerful new weapon: recent academic research that shows a very strong correlation between intense sunshine and peak electrical use in the city.

“The correlation is extremely high, higher even than the reliability factor of a brand-new, gas-fired generator,” says Thompson. “Solar has never been considered reliable by the utilities because they could not push a button to turn it on. This new data shows it is even more reliable than the [utilities’] own peak power plants. Every recent blackout could have been prevented if we had widespread solar power.”

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