Cost-Effective Solar Strategies for Affordable Housing in New York State
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Cost-Effective Solar Strategies for Affordable Housing in New York State Final Report | Report Number 20-11 | December 2019 NYSERDA’s Promise to New Yorkers: NYSERDA provides resources, expertise, and objective information so New Yorkers can make confident, informed energy decisions. Mission Statement: Advance innovative energy solutions in ways that improve New York’s economy and environment. Vision Statement: Serve as a catalyst – advancing energy innovation, technology, and investment; transforming New York’s economy; and empowering people to choose clean and efficient energy as part of their everyday lives. Cover Image:Courtesy of Anika Wistar-Jones, Solar One Cost-Effective Solar Strategies for Affordable Housing in New York State Final Report Prepared for: New York State Energy Research and Development Authority Albany, NY Prepared by: Solar One New York, NY Noah Ginsburg Director, Here Comes Solar Marigo Post-Farr Multifamily Program Manager Anika Wistar-Jones Affordable Solar Program Manager NYSERDA Report: 20-11 NYSERDA Contract 137953 December 2019 Notice Solar One prepared this report in the course of performing work contracted for and sponsored by the New York State Energy Research and Development Authority (hereafter “NYSERDA”). The opinions expressed in this report do not necessarily reflect those of NYSERDA or the State of New York, and reference to any specific product, service, process, or method does not constitute an implied or expressed recommendation or endorsement of it. Further, NYSERDA, the State of New York, and the contractor make no warranties or representations, expressed or implied, as to the fitness for particular purpose or merchantability of any product, apparatus, or service, or the usefulness, completeness, or accuracy of any processes, methods, or other information contained, described, disclosed, or referred to in this report. NYSERDA, the State of New York, and the contractor make no representation that the use of any product, apparatus, process, method, or other information will not infringe privately owned rights and will assume no liability for any loss, injury, or damage resulting from, or occurring in connection with, the use of information contained, described, disclosed, or referred to in this report. NYSERDA makes every effort to provide accurate information about copyright owners and related matters in the reports we publish. Contractors are responsible for determining and satisfying copyright or other use restrictions regarding the content of reports that they write, in compliance with NYSERDA’s policies and federal law. If you are the copyright owner and believe a NYSERDA report has not properly attributed your work to you or has used it without permission, please email [email protected]. Information contained in this document, such as web page addresses, are current at the time of publication. ii Abstract Under Request for Proposal (RFP) 3750, New York State Energy Research and Development Authority (NYSERDA) awarded a total of six contracts to six different solution-provider teams to develop retrofit solutions reaching or approaching net zero energy for six affordable housing buildings. Through this effort, it became evident to NYSERDA’s RetrofitNY staff that a number of barriers exist to installing cost-effective solar PV on affordable housing. This report summarizes barriers to cost-effective solar for affordable housing and identifies solutions that could allow owners to overcome these barriers. Specifically, the report identifies opportunities to reduce upfront cost, leverage additional incentives, increase the value of solar, utilize creative financing, or otherwise increase the technical and financial viability of utilizing solar to achieve net zero electricity consumption in multifamily buildings. While Solar One developed the report in the context of the RetrofitNY program, many of the recommendations in the report apply broadly to solar on multifamily affordable housing as well as the solar industry at large. Keywords Solar Energy, Multifamily Affordable Housing, Net Zero Emissions, Energiesprong, Community Shared Solar, Power Purchase Agreement, Property Assessed Clean Energy, Bulk Procurement, Renewable Energy, New York Acknowledgments The authors of this report would like to acknowledge New York State’s innovative solar companies and affordable housing providers who are working hard every day to bring the benefits of solar energy to the New Yorkers who need it most. iii Table of Contents Notice .........................................................................................................................................ii Abstract ....................................................................................................................................iii Keywords ..................................................................................................................................iii Acknowledgments ...................................................................................................................iii List of Figures .........................................................................................................................vii Acronyms and Abbreviations ...............................................................................................viii Executive Summary ..................................................................................................................1 1 Solar and the Energiesprong Model .................................................................................1 1.1 Prefabricating Elements ........................................................................................................... 1 1.2 Combining Solar with Efficiency Retrofits .................................................................................. 3 1.2.1 Examples from Energiesprong in the Netherlands ............................................................. 4 1.3 Economies of Scale .................................................................................................................. 5 1.4 Tenant Energy Payment ........................................................................................................... 5 1.5 Additional Considerations: Modular and Manufactured Homes.................................................. 5 2 Solar Cost Drivers Analysis ..............................................................................................6 2.1 Solar PV Cost Trends ............................................................................................................... 7 2.1.1 National Cost Trends ........................................................................................................ 7 2.1.2 New York State Cost Trends ............................................................................................. 8 2.2 Solar PV Cost Drivers............................................................................................................... 9 2.2.1 Hard Costs ....................................................................................................................... 9 2.2.2 Soft Costs ....................................................................................................................... 10 2.3 Solar PV Cost Drivers for RetrofitNY....................................................................................... 12 3 Financing ..........................................................................................................................13 3.1 Challenge: Prohibitive Upfront Investment in Solar ................................................................. 13 3.1.1 Proposed Solutions......................................................................................................... 13 3.1.1.1 Solution: Zero-Down, Third-Party Financing .................................................................... 13 3.1.1.2 Power Purchase Agreement ........................................................................................... 14 3.1.1.3 PPA Availability .............................................................................................................. 15 3.1.1.4 Community Solar Site Lease .......................................................................................... 16 3.1.1.5 Challenge: Limited Availability of Power Purchase Agreements for Multifamily Affordable Housing ..................................................................................................................................... 18 3.1.1.6 Challenge: Individual Properties Are Too Small to Be Suitable Community Distributed Generation Host Sites ................................................................................................................ 19 iv 3.1.2 Solution: Long-Term Loans ............................................................................................. 19 3.1.2.1 Private Affordable Housing Lenders ................................................................................ 20 3.1.2.2 Subsidized Loans from Municipal Housing Agencies ....................................................... 21 3.1.2.3 Clean Energy Lenders .................................................................................................... 21 3.1.2.4 Property Assessed Clean Energy ................................................................................... 22 3.1.2.5 Drawbacks, Limitations, and Barriers .............................................................................