Listen to this articleAs New York State continues a push to meet ambitious climate protection goals, solar energy specialists say incentive programs can make installation of renewable energy systems more affordable for businesses and homeowners.
A solar array can provide cost certainty for electricity while also reducing greenhouse gas (GHG) emissions, according to executives from Wayne County-based GreenSpark Solar and Pittsford-based 3rd ROC Solar.
And for larger manufacturers, acting sooner rather than later can help defray significant additional costs down the road that will result from the state’s Cap and Invest Program, said Danielle Mettler-LaFeir, partner at Barclay Damon LLP.
New York has benchmarks in place for GHG reductions, which were adopted in 2019 through the Climate Leadership and Community Protection Act (CLCPA).
The CLCPA mandates a 40 percent reduction in GHG emissions across the state by 2030, and 85 percent reduction by 2050. Those reduction percentages will be on a based on 1990 levels.
To drive compliance, the state will use a newly created Cap and Invest Program, Mettler-LaFeir said during last week’s Rochester Business Journal Virtual Panel Discussion sponsored by 3rd ROC Solar and GreenSpark Solar.
That program, a joint venture of state department of environmental conservation and NYSERDA, will set caps on GHG emissions and require large-scale manufacturers as well as distributors of fuels to “buy” a finite number of allowances.
“They will have to obtain allowances for every ton of GHG emissions that are associated with their activities,” she said.
Those allowances must be bought at auction or, farther down the line, purchased second-hand from another entity that already bought them. Of course, consumers will end up paying a price as well.
“By applying a price on GHG emissions, the idea is that it will incentivize consumers, businesses and everyone else to lower their GHG emissions,” Mettler-LaFeir said. “It really comes down to consumers and businesses that aren’t subject to the requirement to obtain these allowances because of the cost of that will be pushed down (to consumers).
“The cost of consumer products will increase because of this program (and) the cost of business products will increase because of this program.”
Thus, she said, acting now could lessen those impacts. Business owners should consider how the Cap and Invest Program will impact them and if “there opportunities to reduce greenhouse gas emissions associated with your own business: buildings, increasing renewables, efficiencies, transportation, new manufacturing processes.”
But business owners shouldn’t just look at their current property and operations footprint. Future expansion plans will definitely be impacted because of CLCPA requirements, she said.
While the process can perhaps be a bit daunting, there is help available to determine how to reduce the footprint and find savings.
The Climate Solutions Accelerator focuses on using systemic climate solutions to create a healthier and more equitable community, said Andre Primus, manager of organizational programs for the Rochester-based nonprofit.
The Climate Solutions Accelerator uses its Color Your Organization Green program to help businesses get a clear picture of how their activities impact the area in which they operate and beyond, and then provides goals to become a more climate-friendly partner in the community.
“The one-year program walks you through creation of a climate action plan,” Primus said.
They start with an investigation, essentially a snapshot assessment of current conditions, and then use the results to create implementation goals that are repeated far down the line.
“It’s a circular process that allows you to approach those longer-term goals through shorter-term actions,” Primus said.
Included in the process is determining the scope of a business, analyzing stakeholders and facilities for the severity of their impact or vulnerability and the manageability of their impact or vulnerability, Primus said.
What businesses sometimes fail to take into account are their vulnerabilities to climate change.
“How vulnerable is your work, are your facilities, to the environmental effects of climate change: to heat waves, snowstorms, to increased precipitation?” Primus said. “Those things can affect your business in ways that you haven’t really predicted.
“And we also take into consideration the cascade effects, including regulatory. Are you prepared to deal with that. Does that create vulnerabilities in your business or your work.”
Out of the analysis comes a set of goals and how to achieve them.
Perhaps the most influential analysis, however, is based on dollars and cents.
“A lot of people have gone solar because it’s the right thing to do, reducing climate impacts, Mark Vanderbrook, director of commercial origination at GreenSpark Solar said, “but we also need to be able to show the economic returns that make people want to do this.”
Systems built either on rooftops or on the ground by Greenspark typically have produced an internal rate of return of between 8 and 10 percent, Vanderbrook said. But there are additional benefits.
“The other advantage is (avoiding) unpredictable rate hikes (through traditional utilities),” he said. “There are going to be times when electricity prices spike. Solar is one of the few ways you can actually reduce that. Once you’ve installed your solar, you’ve levelized your cost of energy and provided a hedge against future electricity spikes.”
There are government programs that provide additional incentives. The Inflation Reduction Act of 2022 created a 30-percent investment tax credit for 10 years on a solar installation project, Vanderbrook said.
For businesses located outside of New York’s six largest metropolitan areas, there are credits are available through the U.S. Department of Agriculture’s Rural Energy for America program.
The maximum grant is $1 million and is capped at 50 percent of the project cost “so there’s a lot of potential to offset the cost,” Vanderbrook said.
Other incentives such as the state’s 25-percent credit plus the 20 to 30 percent investment tax credit can reduce costs further.
“You’re looking at very little out of pocket, assuming you can get the REAP grant, which is a very competitive program,” Vanderbrook said.
Greenspark Solar used a grant from the REAP program to create a solar array for Cherry Lawn Fruit Farm in Sodus. The array is expected to cover all of the farm’s electric needs while providing an annual savings of $26,000 (which equates to around $650,000 over the life of the array), Vanderbrook said.
The village of Brockport worked with Greenspark in 2018 to erect an array at an old landfill and it now powers several municipal facilities. In 2022, the array saved the village $31,000.
“That’s not going to happen every year,” Vanderbrook said, “but it’s a reflection of what was happening in the market then.”
Homeowners also can reap savings on electric costs and not be subject to pricing swings or drastic increases sought by their utility company, said Brad Abramson, sales manager at 3rd ROC Solar, which primarily caters to residential customers.
Most arrays are roof mounted but 3rd ROC also does ground mounts on private property, depending on land available, he said. The benefits show up on the electric bill and on tax returns.
Eligible residential customers receive a grant of .20 per watt from NYSERDA, and the state also provides a 25-percent tax credit of up to $5,000 for five years, Abramson said. And for persons that don’t have a tax liability now, the credit can be rolled over with the state for five years.
Tax credits can also apply to all costs related to project installation, including repairs to the roof and tree removal that are needed for construction, Abramson said. Typically 45-55 percent of a system of solar panels and installation can be covered, he said.
“At the time of installation instantly you are making money,” he said. “It’s great to lower your electricity cost.”
And then there’s the trickle-down impact. A recent Zillow study showed that homes with solar panels sold for 4.1 percent more than other houses, Abramson said.
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