A great deal all around. A two-building, prewar co-op in the Riverdale section of the Bronx is about to step into the future of clean electricity. Not only is the board installing a total of 616 solar panels on its roofs, it’s also installing 154 briefcase-sized batteries that will store the array’s solar energy and then feed it into the electric grid at times of peak demand — and peak prices — for electricity.
It doesn’t stop there. The co-op will also get two new roofs, a sizable property tax abatement and reduced energy bills for its common areas. Shareholders who sign up for the program will enjoy credits that amount to a 10% reduction in their personal electric bills.
And no money down. The total cost of the project will be about $1 million. But the upfront cost to the co-op is nothing. How is this possible?
“Our business model is that the co-op doesn’t put money up front,” says Russell Wilcox, founder and chief executive at Urban Energy, the solar developer and installer that’s running the project. “We own the system, and we design and install it. We replace the roof or pay a lease for use of the roof. Our investors want returns that are higher than the stock market. If we can get a 9% return, they’ll sign up.”
A technological game-changer. The key to the project’s viability was the rising safety and falling cost of batteries. The batteries in the Bronx project, which weigh about 50 pounds apiece and store two kilowatt/hours of electricity, are the newest generation of lithium-iron-phosphate (LFP) batteries, which are less susceptible to fires than conventional lithium-ion batteries. Also, the batteries will be installed beneath the raised solar panels, which will keep them cool in summertime and ease the ventilation of flammable gasses, further reducing the risk of fire.
“Adding batteries pumps up value for investors,” Wilcox says, noting that a solar array without batteries immediately sends its electricity to the grid, regardless of the pricing at that time. With batteries, however, the electricity can be stored and then sent to the grid at times of peak pricing. In the Bronx project, batteries will increase the worth of the electricity from $25,000 to $50,000 per year. That value is shared by residents and investors.
“We finally have the right technology,” Wilcox says. “The cost is coming down, and the fire department is getting more comfortable with batteries.”
What lies ahead. The Bronx co-op will enjoy a $170,000 abatement of its city property taxes spread over four years. The recently passed Inflation Reduction Act will, for the first time, offer tax credits for buildings that simply install batteries without solar panels — generally a way to shave peak-demand pricing. Under the new law, existing credits will rise for buildings that install solar arrays along with batteries.
The Bronx project is one of half a dozen in the city where Urban Energy will supplement solar panels with batteries. “For us,” Wilcox says, “this is the future.”