How Can Building Owners Meet the NYC Emissions Law Using Solar Power

In April 2019, the NYC Council passed the Climate Mobilization Act, which is also known as the NYC Green Deal. From the act, Intro 1253 aimed to put a limit on the GHG emissions for buildings over 25,000 sq. ft. Later this became law in May 2019 and was known as the Local Law 97 (LL97). This law covering about 60,000 NYC buildings. 

Keeping the emission levels in 2005 as the baseline, LL97 aimed at an emission reduction target of 40% by 2030 and 80% by 2050. 

The Need to Know About LL97 for Building Owners

• All buildings applicable under LL97 must submit an emissions report every year on May 1st from the year 2025. 
• The building’s emission report must be stamped by a Professional Engineer (PE) or a Registered Architect (RA).
• Building owners will have to pay a penalty of $268 for every tCO2e above the emission limit.
• Failing to submit the emission report is $0.50/sq. ft. per month. The penalty for a false report is $50,000 and up to 30 days of imprisonment.
• The emission limits are expressed in kg of CO2 equivalent, per sq. ft. and per year.

Can Building Owners Benefit from Using Renewable Energy to Meet Local Law 97?

YES, they can. LL97 does allow the purchase of renewable energy credits & carbon offsets for meeting a part of the emissions target. Natural gas represents about 40% of the total electricity generation in New York according to the US Energy Information Administration. Solar power essentially replaces the electricity from the power grid with clean energy. For instance, 1 kWh from the solar panels essentially replaces 1 kWh from the gas power station.

By How Much Can the Emissions Be Reduced with Solar Power?

A solar capacity of 15 W can fit in 1 sq. ft. of roof space. Let’s consider a 20,000 sq. ft. roof space that can use a 300 kW solar array. This system will be capable of generating 420,000 kWh of power per year.

Since LL97 has an emission factor of 0.000288962 tCO2eq / kWh, the building emissions would essentially be cut down by 121.36 metric tons per year in the above example. Considering the $268 per ton over the limit penalty, the building above the limit will avoid $32,526 penalties every year. 

A 100 kW to 500 kW solar system has an average price of $2.44 per watt in New York, according to the National Renewable Energy Laboratory. So a 300kW solar system would cost about $732,000. With the help of the 26% federal tax credit, the total price would be cut down to $541,680.

Considering the electricity price of 20 cents/kWh, a solar output of 420,000 kWh would save $84,000 per year. We already saw how $32,526 will be saved from the LL97 penalties. Thus, the total savings would sum up to $116,526 per year. The payback period of a 300 kW solar power system is typically 6.4 years based on electricity savings alone. Adding the avoided penalties, the payback period would be cut down to 4.6 years only. An important thing to note is that solar panels have a life span of over 25 years.

Financing the Solar Installation

While some companies are able to pay for the solar power system upfront, but this can affect the cash flow and even lead to some excellent opportunities being missed. Financing a solar project with a loan can be a great option since the load can be paid off using the savings from electrical savings and avoided penalties. This is extremely useful, especially in commercial buildings.

Going back a bit we saw that a total cost of $541,680 would be needed for a 300 kW solar system. Now, considering a loan with 3% interest for a 10-year term, the payment would be $5,230.50/month or $62,766/year. We already achieved a total annual savings of $116,526, thus there is still much left on the first year itself.

Also, read What makes India a Lucrative Market for Solar Investors

Recommendations

The building’s energy consumption profile is used to calculate the building emissions. Thus, improving the energy efficiency profile would greatly benefit building owners to meet the LL97. Since, there are several energy efficiency measures available, identifying the best measure for your building based on the system condition is a challenging task. 

The best course of action is to consult energy professionals and start with a building energy audit. During an energy audit, a careful and thorough inspection of the building’s systems is done to find the optimal energy efficiency measure that best suits the building’s requirements.

Author’s Bio

Michael Tobias, PE, is the principal and founder of New York Engineers. He leads a team of over 50 MEP/FP engineers. Although New York Engineers’ main headquarters are in NYC and Chicago the business has led over 1,000 engineering projects in New York, New Jersey, Connecticut, Pennsylvania, Florida, Maryland, and California, as well as Malaysia and Singapore. Michael is an advocate for green technology and energy efficiency and approaches engineering as a vehicle to raise the quality of life