Incentives for Residential Building Upgrades in NYC

Michael Tobias
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    New York City is characterized by a strong commitment with sustainability and clean energy. The city has established an 80% emissions reduction target by 2050, based on 2005 levels. In addition, there are two ambitious goals for the year 2030: sending zero waste to landfills, and producing 50% of the energy consumed in the city with renewable generation technologies.

    The city government can upgrade municipal buildings, while energy companies improve their generation and transmission infrastructure, but the city can only meet its sustainability goals if home and business owners also upgrade their properties. This has been enforced to a degree with the NYC Energy Conservation Code, but in many cases building upgrades come at a high cost for property owners. Therefore, many incentive programs have been introduced to help cover the cost of building upgrades and to motivate their owners to exceed Energy Code requirements. Most incentives locally available come from Consolidated Edison Inc., the utility providing electricity, gas and steam services for NYC.

    Con Edison’s incentives can be classified into three broad categories, depending on the market segment they target: incentives for residential buildings of up to 4 dwelling units, for multi-family buildings from 5 to 75 units, and for business customers. This article will provide an overview of the two incentive categories that target residential buildings.

    Incentives make building upgrade projects more attractive from the financial standpoint: with a reduced initial cost and with the same long-term benefits, each dollar spent upfront yields a higher return.

    Building Upgrade Incentives: Small Residential Buildings

    Con Edison’s incentive programs focus on lighting efficiency and HVAC upgrades, and there are also state and federal incentives for renewable generation systems. With all incentive programs, an important recommendation is to ensure the equipment you purchase is eligible - lists are typically provided by incentive agencies. In other cases there are no specific equipment lists but the label from a program such as ENERGY STAR may be required.

    Lighting Incentives

    If you live in Brooklyn or Queens, your property may be eligible for a free LED lighting upgrade. You just have to visit the Con Edison website, check if your property is in one of the eligible neighborhoods, and then fill an application form. Other than delivering significant energy savings, LED lighting products can last for more than a decade.

    HVAC Incentives

    Most of the incentive programs available for residential properties focus on HVAC systems, which generally represent the largest fraction of energy expenses. All heating and cooling upgrades listed in the following table are eligible for a rebate:

    If you complement your HVAC installation with a Wi-Fi smart thermostat, you get a $25 incentive on your purchase, and an extra $85 if the thermostat is registered with Con Edison to allow peak demand management, bringing the total to $110 per thermostat. In addition, many neighborhoods in Brooklyn and Queens are eligible for an additional $75.

    Incentives for Other Appliances

    In addition to HVAC, Con Edison also offers incentives for the following equipment

    • Refrigerator, CEE Tier II or III: $75
    • Clothes washer: $35
    • Dishwasher: $50

    There is also an incentive program for owners of electric vehicles, called SmartCharge. The program provides a free device for EV owners, which logs charging and driving data, and there are cash rewards for charging EVs away from peak demand hours.

    Renewable Energy Incentives

    The complement to saving energy is clean energy generation, and New York City has incentive programs for both solar and wind energy.

    Solar power rebates are provided through the NY-Sun Incentive Program, which gives homeowners a $400 rebate for every kilowatt of generation capacity, as of mid 2017. Households below 80% of the median income get a double rebate from the Affordable Solar Program, for a total of $800/kW. There is also a state tax credit for 25% of the cost of your solar power system after deducting the rebate, up to $5,000.

    In the case of wind power, the NY State Energy Research and Development Authority provides rebates based on annual generation, up to 50% of the installed cost. The program is for wind turbines up to 2 megawatts, far exceeding the capacity of residential installations, so the cap is non-existent for practical purposes in the residential sector.

    There is also a nationwide incentive available through 2019: the Renewable Energy Investment Tax Credit. If a renewable generation system is installed for a residential or commercial property, 30% of its net cost after rebates is deductible from federal taxes.

    Building Upgrade Incentives: Multi-family Buildings

    Multifamily buildings are characterized by having common areas that are not managed by any of the tenants. To be effective,incentive programs target not only the tenants, but also property management companies.

    Lighting Incentives

    Just like in small residential buildings, a free LED lighting upgrade program is available for multifamily buildings in many Brooklyn and Queens neighborhoods. The benefit applies for indoor and outdoor lighting in common areas, and each tenant can receive up to 10 free LED bulbs. Multifamily buildings classified as affordable housing are eligible as well, regardless of location.

    Buildings that do not qualify for free lighting upgrades can apply for cash rebates that significantly reduce the upfront cost of an LED installation. It is important to note that only lamps with the ENERGY STAR or DesignLights Consortium label are eligible; other lighting products only get the rebate if approved by an authorized representative.

    HVAC Incentives

    Since HVAC energy consumption is among the highest operating costs in multifamily buildings, there are many incentives for upgrading these systems. Some incentives are general and based on energy saved, while others are specific for certain pieces of equipment.

    The general incentive is $0.16 per kilowatt-hour saved if the upgrade targets electrical equipment, and $2 per therm saved if it deals with gas-fired equipment. These values apply for affordable housing as well. The main incentives available for specific pieces of equipment are provided below; it is important to note that boiler incentives are for units with a capacity up to 2.5 million BTU/hour, and the general rate of $2/therm applies for larger units.

    There are free upgrades available for certain neighborhoods in Brooklyn and Queens, as well as for affordable housing regardless of location:

    • Water-saving showerheads: 1.5 GPM, maximum two per dwelling.
    • Faucet aerators: 1.5 GPM for kitchen, 1 GPM in bathroom, up to four per dwelling.

    Affordable housing also qualifies for free air sealing, and one-pipe steam systems may be eligible for a boiler tune-up and system balancing.

    There is an additional incentive available for multifamily buildings from 5 to 75 dwelling units where the heating system is converted from oil to natural gas. The rebate can reach a value up to $40,000 depending on building conditions.

    • A conversion rebate of $300 is available per dwelling, which means the maximum value is $22,500 in a 75-unit building.
    • There is an additional equipment rebate of $17,500.

    Renewable Energy Incentives

    The renewable energy incentives available for multifamily buildings are the same that apply for small residential constructions. However, if a residential building is large enough to accommodate a 200-kilowatt solar photovoltaic system, and is located in neighborhood classified as a Strategic Solar Location by Con Edison, any incentives earned by the building are boosted by 20 percent!


    Incentives increase the financial attractiveness of residential building upgrades, but there are many technical requirements to meet for your project to be eligible. The best recommendation is to work with a qualified engineering consultant or design firm, making sure that you will not miss any of the benefits applicable for your project.

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