Commercial Solar PV + Heat Pumps: Benefits for NYC Building Owners

Michael Tobias
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    - NYC building owners can reduce their energy costs and emissions by combining commercial solar systems and heat pumps.

    - This combination of technologies can also help you avoid emission penalties under Local Law 97, which comes into effect in 2024.

    - A commercial building with a properly sized solar array and heat pump systems can save on both electricity and gas bills.

    - Solar panels and heat pumps are both considered green technologies, and this makes them eligible for incentives such as rebates and tax credits.

    New York City has some of the most ambitious climate laws in the US. 2023 is the last year before Local Law 97 takes effect, and buildings with over 25,000 sq.ft. will then be subject to emission limits. NYC has also enacted a natural gas ban for new constructions, which takes effect in January 2024 for buildings below seven stories, and in July 2027 for taller buildings.

    Natural gas is one of the most popular heating fuels in the US, but it has an emissions footprint of 0.00005311 tCO2e per kBTU. This may seem like a small number, but consider that the typical office building uses 24 cubic feet of natural gas per square foot (per year).

    • One cubic foot (CF) of gas contains around 1,037 BTU
    • A 100,000 sq.ft. building would use around 2,400 MCF (2,488,800 kBTU)
    • Under Local Law 97, this is equivalent to 132 metric tons of CO2-equivalent

    These emissions must be added with those resulting from electricity consumption and other energy sources. The total emissions amount is compared with the building’s respective limit, and there is a penalty of $268 per each metric ton of CO2-equivalent over the cap.

    Concerned about Local Law 97 penalties? Get a professional energy audit and cut your emissions.

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    Solar power is considered a zero-emissions source under Local Law 97, which means a commercial solar array can offset the emissions resulting from energy consumption. By upgrading from combustion heaters to fully electric heat pumps, building owners can also use solar power to offset the emissions resulting from fuels like natural gas and heating oil.

    Here we will discuss the main benefits achieved when combining a commercial solar PV system with heat pumps.

    Benefit 1 - Avoid Rising Electricity and Gas Bills

    energy prices-2

    Inflation has been a major issue in 2022, and the energy sector has been hit particularly hard. The US EIA Short-Term Energy Outlook forecasts that natural gas users will spend 25% more on space heating in winter 2022-2023, compared with last year. Since heating oil has suffered a more drastic price hike, users can expect to see their heating costs soar by 45% this winter.

    • Electricity prices have been affected less than natural gas and heating oil prices.
    • The US EIA is forecasting an increase of only 11% for electric heating users.

    Resistance heaters are inefficient, and they can be very expensive to use in New York City, where the commercial electricity tariff exceeds 20 cents/kWh. However, electric heat pumps use 2-6 times less electricity than resistance heaters for a given load.

    Electricity price inflation is mitigated if you have a commercial solar energy system, since consumption from the grid is replaced with onsite generation. Also consider that solar installations up to 750 kW qualify for net metering in New York. A commercial solar array can be sized to cover your daytime electricity needs, while generating a large enough surplus to offset your nighttime consumption with net metering (this includes heat pump consumption).

    Commercial solar arrays larger than 750 kW get a feed-in tariff called the Value of Distributed Resources (VDER) tariff instead of net metering. You can also offset nighttime consumption with surplus daytime generation in this case, but you get a lower tariff per kilowatt-hour exported.

    Benefit 2 - Avoid Local Law 97 Penalties

    building emission penalty

    As mentioned above, onsite solar generation is considered a zero-emissions energy source in Local Law 97. For comparison, grid electricity has been assigned an emissions factor of 0.000288962 tCO2e per kWh. For every 100,000 kWh of grid electricity replaced with solar generation, your building’s carbon footprint is reduced by 29 metric tons of CO2e.

    If you switch from natural gas to electric heating, and you still use the grid for 100% of your electricity needs, you’re simply switching one emissions factor for another. A highly efficient heat pump running on grid electricity will have lower emissions than a gas boiler, but they will not decrease to zero.

    On the other hand, when you have a commercial PV system onsite, all heat pump consumption that gets covered by solar electricity has zero emissions.

    Benefit 3 - Qualifying for Financial Incentives

    Solar panels and heat pumps are both considered green technologies, and for this reason they qualify for many types of incentive programs. Solar power systems get a nationwide federal tax credit equivalent to 30% of their cost, and the Inflation Reduction Act introduced several rebates and tax credits for heat pumps in residential applications. 

    Depending on where you live, additional incentives may be available from your utility company or local government. For example, the NYSERDA NY-Sun Megawatt Block Program offers up to $1,200 per kilowatt of installed solar capacity in the Con Edison service territory.

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    Tags : Solar Power heat pump heat pump technology solar energy solar panels heat pump water heater solar

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