New York Goes for Big–and Deep–Green

5 min read

How Cuomo’s Clean Energy Fund can help you

Improved profitability, reduced operating costs, increased building value, and high investment returns.  That’s what every developer wants, and that’s what will be possible in New York state thanks to governor Andrew Cuomo, through the recently initiated $5 billion Clean Energy Fund (CEF).

The CEF is a ten-year initiative that refocuses strategic priorities for the New York State Energy Research and Development Authority (NYSERDA), a public benefit corporation that promotes energy efficiency and use of renewable energy. New priorities pursued via CEF emphasize harnessing private investment to reduce customer bills and pollution (including greenhouse gases).

As proof of seriousness, all of the CEF’s $5 billion will be in addition to whatever state and federal tax credits are available. To reduce costs and accelerate customer demand for energy efficiency and other behind-the-meter clean energy solutions, and increased private investment, $2.7 billion will be provided. In addition, $1 billion will provide long-term certainty to New York’s growing solar market and to lower the costs for homeowners and businesses investing in solar power; $782 million will be used to partner with private financial institutions to accelerate and expand the availability of capital for clean energy projects; and $717 million will be invested in cutting-edge technologies that meet increasing demand for clean energy.

“Under the CEF,” says a NYSERDA spokesperson, “we plan to reduce first-cost barriers to energy efficiency experienced by owners of low-to-moderate income properties, helping them to make energy improvements to their buildings or integrate energy efficiency into new construction, while improving the health and safety of tenants.  Overcoming such barriers can have greater impact in affordable housing than in most sectors.”

Developers can expect to find in New York a new pro-efficiency ease-of-operations rarely found anywhere in the U.S. Michael Colgrove, Director of the Multifamily Residential Program at NYSERDA, explains that, for example, retrofits of existing buildings will benefit because NYSERDA’s Multifamily program has been modified to include three levels of support to provide maximum flexibility to building owners— to install a single energy efficiency measure; a comprehensive whole-building approach expected to achieve at least 25 percent energy savings; and retrofits for deep energy-savings. The first option will introduce building owners to the benefits of energy efficient equipment who have not traditionally pursued energy efficiency and may not be ready to engage in comprehensive improvements. This has not been available previously.  The second option is a continuation of previous support for building owners interested in holistic solutions.  And the final option, to be first offered through a competitive solicitation during the fourth quarter of 2016, will create new opportunities for cutting-edge building owners and energy professionals to demonstrate deep energy retrofit possibilities in existing multifamily buildings.”

For new multifamily construction and gut rehabilitation, says James Quirk, NYSERDA’s Program Manager for Codes and New Construction, “We’ll focus on increasing awareness of, and demand for, deep energy savings and zero net energy performance, serving both market-rate and affordable housing. This will reduce building operating costs significantly and will help developers market their buildings to tenants interested in living in a greener or more sustainable building. These CEF programs will support New York State and New York City housing agencies, funding authorities and municipalities, and will help secure the most efficient, durable, resilient, healthy housing. Multi-tiered incentive structures focus support and incentives on promoting higher levels of comprehensive building and energy performance, up to and including, net zero performance buildings, enabling broader market participation and assuring that a small number of very large projects won’t drain the program’s resources; and these programs encourage installation of solar and other renewable resources to be layered onto a project.”

Thus, says Mark F. Thielking, Executive Director of the Energy Improvement Corporation,  a community- based, New York state local development corporation focusing on energy efficiency, “New York state is, among other things, making it easier to use both the Federal Investment Tax Credit and the industry’s creative use of leasing and power purchase agreements by creating a fertile environment for solar installations through financial incentives, community-based campaigns to drive solar installations and streamlined local permitting and zoning associated with solar. Also, New York State has used Qualified Energy Conservation Bonds, a federal program that brings down the cost of debt issued to support energy related improvements to buildings, to facilitate very attractive financing rates for energy improvements, such as those that will be facilitated with the Clean Energy Fund.”

Thielking emphasizes that new development opportunities will emerge in NY State with the new CEF because it will “help spur property owners to invest in their buildings to reduce energy wasted from an outdated and inefficient building infrastructure, as well as helping them realize the massive opportunity in renewable energy.” The long-term goal, he  emphasizes, “is to ‘social-norm’ the idea that if you haven’t looked into reducing energy wasted from your existing building and securing renewable energy sources, you are missing a BIG opportunity to improve profitability, reduce operating costs, increase the building’s value and provide high investment returns.”