Marianne Schaefer in Green Ideas
In 2014, the stars were aligned for a massive solar installation project at the 930-unit Georgetown Mews cooperative in Kew Gardens Hills, Queens. All incentives and tax abatements had been secured, the financing was in place – but then the deal fell apart.
“It just didn’t happen,” remembers Stephen Owen, founder of Sol Alliance, a solar consultancy. “At the time I worked for a local company called Mercury Solar Systems and was overseeing the project. Then Mercury got bought by the publicly traded company RGS Energy, the commercial division of Real Good Solar. Suddenly and abruptly, RGS decided to exit the commercial solar space, and that was that.”
As a result, the ambitious project to install solar on the 550,000 square feet of south-facing roof space died. Owen decided to start his own company, Sol Alliance, which helps business owners, including co-op boards, bring solar projects to fruition.
“In 2015, after the dust had settled, I went back to the board of directors of Georgetown Mews,” Owen says. “I told them we should and could continue to develop these great solar projects. We would just have to refresh our information on what we can do.” The plan was to get a new contractor, somebody who would manage and monitor the project. “It was not exactly like back to square one, but it was take two.” Owen says.
When they set about redesigning the system, the team discovered, to their delight, that the cost of solar equipment had declined sharply. In that sense, the delay turned from curse to blessing. “Today we’re able to build a significantly larger and more beneficial project than what we had signed up for in 2013 and 2014,” says Owen. “What we’re building now is 50 percent larger and will provide 50 percent more benefits.”
But Owen is not sure if the benefits of lower costs are worth the delay. “There’s a cost of doing nothing,” he says. “What we will get now is significantly improved to what we would’ve installed two years ago. But it’s always the question: does it makes sense to do it now, or wait for materials to get even cheaper and incentives to get even higher? For two years we lost the savings from solar of about $300,000 to $400,000 a year.”
One advantage of the delay is that the corporation got grandfathered into programs that are no longer available. “We got from Con Edison the ‘monetary remote net metering program,’ which amounts to $400,000 in annual savings and makes the project twice as lucrative,” Owen says.
Work is set to begin April 1. The total project will cost $3.5 million, but the net cost for the co-op will be about $1 million, thanks to incentives and tax breaks. The co-op will receive $1 million in federal investment tax credits, which will be passed on to shareholders, who can then deduct it from their personal income taxes. The project also received a $1 million incentive from the New York State Energy Research and Development Authority (NYSERDA). A $500,000 property tax abatement will be spread over four years after the project is up and running. The board is financing the project with a loan from its mortgage holder, plus money from the reserve fund and the flip tax. Because of falling prices and rising incentives, the co-op has enough money on hand to tackle additional capital projects, including the retrofitting of the current boiler.
As the board and shareholders at Georgetown Mews have learned, an unexpected delay in a capital project can pay unexpected dividends.
PRINCIPAL PLAYERS – ENERGY CONSULTANT: Sol Alliance. CONTRACTOR: Green Street Solar Power.
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