Ronda Kaysen in Green Ideas on July 21, 2014
The payback on this project will take four years — while the complex saves $250,000 in electricity bills the first year alone.
Here Comes the Sun
Over the past couple of years, the cost of solar panels has dropped as advances in manufacturing increased production. At the same time, various city, state, and federal incentives were introduced, making expensive projects affordable.
But making a project of this scale happen is a Herculean task. The biggest hurdle is assembling the cash. Last October, the community refinanced its $13.6 million underlying mortgage with John Hancock. At the time, the solar project was not on the table, so Georgetown Mews didn't take out a larger mortgage to help finance it. The terms of the mortgage give John Hancock the right to veto any additional financing the co-op seeks.
Ultimately, the co-op will recoup much of the money it spends. The project is eligible for a $1 million in rebates from the New York State Energy Research and Development Authority (NYSERDA). A 30 percent federal tax credit shaves off another $1.2 million. City property tax abatements reduce the cost by another $250,000 over four years after the system is in place; depreciation further reduces the costs. (In addition, the 30 percent tax credit can be allocated to individual shareholders.) The community hopes to pay back the remaining cost as it continues to sell off unsold units.
Tax Credits Available
The project was originally working under an extraordinarily tight deadline. Previously, if it had not been completed by December 31, 2014, the $250,000 in city tax credits would have expired, making the project unaffordable. Now, however, a bill has passed in both the State Senate and the State Assembly extending the tax credits through 2017. Georgetown Mews' solar project is still scheduled to be completed by the end of the year, though.
Starting the project is not simply a question of getting a green light from the bank, however. The complex will have to upgrade its electrical system, which dates back to 1952. The project must be approved by both the New York City Department of Buildings and Con Ed, and includes an impact study.
"Everybody thinks that once you decide to go solar, you just install a system," says Stephen Owen, the RGS Energy project-development director for the Georgetown installation. "But as the industry has grown up, so have the utilities and they are much more judicial about whether their grid can handle it."
In 2008, the board had the entire community submetered, which is part of the reason the solar panel project will work: The co-op will be able to direct the power it generates through the master meter. Individual shareholders won't see a reduction on their individual electric bills; instead the complex's overall costs will drop due to a credit on the overall dollar amount billed from Con Edison, which translates to lower maintenance fees — and a happy, green community.
Photo by Carol Ott. Click to enlarge.
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