Paula Chin: Hi. Welcome to Problem Solved, a conversation about problems that have been solved in New York co-op and condo buildings. I'm Paula Chin, and my guest today is Russell Wilcox, founder of the solar development company, Urban Energy. Welcome, Russell.
You were able to help a co-op in the Bronx get a brand new roof for free, along with a tax abatement and reduced energy bills, all at no upfront cost, which is quite a trifecta. Can you tell us about it?
Russell Wilcox: Sure. This is a six story co-op with 180 units. It was built in 1955, classified as post-war, but still definitely on the older side. Even before we go on the roof and take a look at how everything's laid out, we'll do satellite imagery renderings of how many solar panels we can fit and come up with pretty good production estimate numbers for the amount of electricity production. It's a very easy calculation. People pay roughly 23 cents a kilowatt hour for their electricity costs through Con Edison. So if we can take the solar power, directly reduce the amount that they pay Con Edison, and then give them a 10% rate, it becomes a sizable amount of money that we can generate with the system, and then we can provide those benefits back to the building through the free roof — or subsidized roof, in some cases.
If it's a brand new roof or maybe five years old, sometimes we can install the solar system directly on top of it and provide a roof lease payment. In this case it would've been a $10,000 annual roof lease payment, plus around $120,000 in property tax abatement, and then $7,000 worth of electricity savings. However, when we went on the roof, we noticed that it was aging. It was in the 25, 30 year range. So in this case, it was roughly $250,000 to replace a roof. That matched very nicely with the total amount of roof lease payments we were going to put up, so instead of the roof lease, we decided to go for the $250,000 roof upgrades. That also bumped up the property tax abatement to roughly $150,000 for the building.
Paula Chin: So the deal that you worked out was that you would cover the cost of installing the new roof, which was $250,000, and going forward, you are essentially leasing the roof from the building to install your solar panels.
Russell Wilcox: Exactly. Think about us like we're another tenant sort of living on the roof and having our system on the roof. Urban Energy designs the system. We'll figure out exactly how many solar panels we can fit, and then we figure out how are we gonna actually tie the electrical system from the solar panels into the building itself. We pay for the whole system. We own the system. And then it becomes very straightforward for the building. It's literally just signing a 25-year lease and reaping the benefits.
Paula Chin: Is this a new program that's being offered by Urban Energy?
Russell Wilcox: There's always changes in the solar industry. They actually call the industry as a joke the solar coaster, like a roller coaster ride with new programs coming in and new subsidies. After Superstorm Sandy in 2014 rolled through and really decimated a lot of the electrical infrastructure, the state started really putting a lot of time and resources into coming up with a new way to put more solar power and batteries as a sort of backup option. In 2017, they came out with the Community Solar program and it's really been a focus, providing energy savings to renters and low to moderate income people in the city. The program was a great idea to make it really easy for contractors to have a realistic value for what that electricity would be, plug it directly into the grid and then sell off credits to individual people who want to subscribe to the system and basically be a part owner in that solar system. And then we would, in turn, provide 10% electricity savings. So it was a great program. It went till about October of 2021.
I think we're gonna be one of the first projects like this in New York City where we're not using the Community Solar program. We're using this — we call it “behind the meters” — installing the solar power directly to people's loads as opposed to virtually just dumping it into the grid, if that makes sense.
Paula Chin: And of course there's the incredible enticement of getting a new roof for free.
Russell Wilcox: That's one of the best values. And honestly, we try to push that. It's a huge capital investment for a building. And so if we can help with that and solve an issue as opposed to just coming in, saying we want this space and we'll give you some benefits, we're actually solving a problem.
Paula Chin: It does sound like a great solution. Russell, thank you so much for joining us today.
Russell Wilcox: Thanks for having me.