June 17, 2020
As development spreads and returns have been compressed for affordable housing, developers, owners, and certain operators have moved to implement solar energy technologies.
In New York City, Local Laws 95, 96, and 97 have specific mandates for installing rooftop solar on all buildings that exceed 20,000 square feet. The local laws also put a price on greenhouse gas emissions that exceeds any price globally.
Aside from compliance with local laws such as those mentioned above in NYC, improvising the NOI (net operating income) has offered a big advantage by offsetting electrical expenditures associated with the property.
Applicants submitting competitive applications for Low Income Housing Tax Credits may notice a competitive advantage if solar panels are installed on the building and the solar equipment is benefiting the tenants. The tenants can benefit either from a direct offset of their energy usage, or by being capable of participating in a community solar program as a subscriber, or by having the solar equipment offset common area electrical load.
Now when you take the standard Low Income Housing Tax Credit for the solar renovation/improvement project this will adjust the way you are capable of taking the solar investment tax credit. You are allowed to double-dip in both the ITC and LIHTC, but the ITC will be reduced by 50%. For example, if the ITC has a 30% value, you will only be capable of receiving a 15% ITC alongside the LIHTC.
For more information on implementing solar at your affordable housing property, speak to a YSG Solar consultant about your project. Send us an email, or call at 212.389.9215 to get started.
YSG Solar is a project development vehicle responsible for commoditizing energy infrastructure projects. We work with long-term owners and operators to provide clean energy assets with stable, predictable cash flows. YSG's market focus is distributed generation and utility-scale projects located within North America.
Sources:
https://www.seia.org/initiatives/solar-investment-tax-credit-itc