Solar Energy Has Big Apple Potential But New York Real Estate Entrepreneurs Haven't Seen the Light

I love New York. I can walk outside, look up and get a lesson in history just from looking at its buildings. Not only is it the birthplace of the American dream, its skyline is an icon of industry, capitalism and our intention to always go bigger and do better. As a local contributor to that skyline, it’s personal, but this home of mine is slower in keeping up with the sustainability Joneses than a city of 8.4 million people should. Meanwhile, smaller cities in California and Arizona are saving money big time by installing solar panels on large commercial buildings -- something that NYC lacks.

Don’t get me wrong, New York State is one of the top 10 “solar states”, but when you break it down per city, per capita, medium-sized cities like Phoenix and Denver are ahead of NYC, and you can’t blame it on sunlight either. Indianapolis, which gets less sun than New York, ranks higher. In larger cities like NYC, the arguments against solar panels are starting to fall short, especially because solar panel installations have become “ridiculously cheap” according to Bloomberg New Energy Finance. Another example is  Goal Zero Yeti 150 solar generator - price continues to decrease.



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Chart from: CleanTechnica



With Mayor Bill De Blasio’s ambitious goal for NYC to hit 80 percent renewal by 2050, why is New York still seemingly behind the times?

I have a couple of educated guesses:
The cost factor.

Currently, while there are a slew of federal incentives to promote sustainability, state-level credits vary dramatically. California gives an investment tax credit (ITC) that comprises 30 percent of the total system cost, on top of an existing 30 percent federal tax credit. New York isn't quite there, but does offer a close 25 percent in tax credits.

Given that New York is a highly developed state with world-class economic, social and political institutions, it is surprising that it lags ever-so-slightly behind California. After all, not only is it easier and cheaper to install solar panels than ever before -- it's untapped money. Our West 42nd Street Atelier property, for example, recouped the installation cost of our solar panels within two years. Clearly, there isn't just a "green" environmental dimension; there's also a "green" financial one as well.

To complicate the discussion further, the outcome of the recent presidential election has thrown the future of the solar installation program into jeopardy. According to the analysts at S&P's Global Platts division, we could see a cut in the solar installation ITC under the Trump Presidency:

"Trump's possible efforts to end incentives for alternative energy development would boost near-term demand for fossil fuels," said a report by analysts at S&P Global Platts. "A potential cut in the Investment Tax Credit to 10 percent from the current 30 percent would slash solar installation demand by 60 percent."

In other words, the cost factor, which wasn't much of an issue in 2016, may become the decisive factor for developers in 2017. For now, it's too early to tell, and developers don’t like the unknown.