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Getting Paid to Save Money: Incentives Available to Switch from Oil to Gas

Jennifer V. Hughes in Board Operations on May 16, 2013

New York City

May 16, 2013

The caveat that condo and co-op boards should be aware of is that the only way to be eligible for these incentives is to be a so-called "firm" rate customer, meaning that your system burns only gas and is not dual-fuel, says Joe McGowan, manager of gas sales for Con Edison.

That's not a value judgment on dual-fuel, which many buildings prefer for its flexibility since you can burn oil when heating demand is high and burn gas when it's not. Rather, it's because the incentives are funded by a fee called the System Benefits Charge paid by firm gas customers, so they are the only ones who qualify.

Con Edison does have a designation known as "dual-fuel firm," in which Con Ed can't interrupt your gas service. (Normally, Con Ed can interrupt your gas service when the system is overworked, so "interruptible" customers get a favorable gas rate.) Dual-fuel customers still qualify for equipment and upgrade rebates, but they often receive lower awards than firm customers. McGowan says the deadline for conversion incentives is in June, while the energy-efficiency rebate programs run year-round.


National Grid territory includes parts of Brooklyn, Queens, Staten Island, and Long Island. The company has a variety of incentives for energy-efficient boilers, condensing unit heaters, water heaters, and other equipment, reports Louis Rizzo, lead program manager for residential and commercial energy-efficiency programs.

The limits on rebates are determined by what buildings are installing. Specific equipment, such as boilers and water heaters, fall under the so-called "prescriptive" plan, which has a $100,000 limit. If a building is installing custom energy-management systems, it must pass a cost-benefit screening to determine the level of therm savings. Custom projects are generally paid at $2.25 per therm saved. The incentives cover up to 50 percent of the total project costs, with a cap at $250,000.

Rebates are paid out after all the equipment is installed. Rizzo says that usually can be done for prescriptive buildings in about four to six weeks; custom customers take longer. All customers must be firm gas customers, similar to the requirements for incentives offered by Con Edison.


New York State offers a rebate to biofuel users of a penny per gallon for each percentage point of biofuel, up to 20 cents per gallon. So, if you use B20 biofuel, you can net 20 cents a gallon in rebates. A condo using B20 biofuel that burns 100,000 gallons in a heating season would see a $20,000 rebate, says Dehran Duckworth, managing member of Tri-State Biodiesel. If your building pays a state income tax, the rebate would first go as a credit toward that tax. If there are no state income taxes, the money is returned as a cash rebate that is then distributed to residents.

The New York State Energy and Research Development Authority (NYSERDA) grants incentives for oil-to-gas projects through its Multi-family Performance Program, which is currently fully funded until 2015. The program involves an energy audit of your building that helps the experts develop energy-saving projects for the property, says Cameron Bard, project manager at NYSERDA. Tackle enough projects to cut energy usage by 15 percent and you can net $500 to $1,000 per unit, depending on your affordable-housing status. 

NYSERDA does not give incentives to go from No. 6 to No. 2 oil or biofuel. As with Con Edison's incentives, only firm gas customers — not dual-fuel — can qualify for an oil-to-gas project.

The New York City Energy Efficiency Corporation (NYCEEC) was founded two years ago by a city grant from U.S. Department of Energy funds. It provides loans to buildings that need to finance projects to convert from No. 6 or No. 4 oil to either gas or No. 2 fuel. It has a pot of more than $42 million, but its real strength comes from its partnerships with traditional lenders, says Posie Constable, director of Clean Heat, the financing arm of NYCEEC.


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