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New York Incentives Incentives for CHP systems include those directly targeted to CHP, such as the NYSERDA Program Opportunity Notices (PONs) as well as indirect incentives that will lower the cost of installing or operating a CHP system but are not specifically targeted to CHP. 1. NYSERDA FUNDING OPPORTUNIES NYSERDA offers Program Opportunity Notices (PONs) relevant to all aspects of CHP installation, development, and research. PONs essentially are requests for proposals for which multiple awards are given in a prescribed time frame. In the past, PON grants have been awarded for a wide variety of projects including energy audits, the installation of innovative heat recovery systems, renewable and hybrid CHP systems, technology transfer studies, and market development support for the CHP industry as a whole. NYSERDA updates the web site regularly, and it includes an archive of past PONs and recently signed contracts. These provide a sense of the solicitations and projects that have merited support in the past. You may also register to receive email updates of new PONs as they are issued. 2. DORMITORY AUTHORITY OF THE STATE OF NEW YORK (DANSY) The Dormitory Authority of the State of New York provides financing and construction services to public and private universities, not-for-profit healthcare facilities and other institutions which serve the public good.
3. NYS DEC BROWNFIELD CLEANUP PROGRAM Recently passed legislation implementing changes to the Environmental Conservation Law (ECL Section 27-1401 "Brownfields Cleanup Program") and the tax law as related to the cleanup of such sites sends a strong signal that New York State is interested in the economic development opportunities offered by brownfield site redevelopment. The brownfield remediation and redevelopment process is now enhanced with an extremely generous suite of tax credits for tangible property costs, real property tax expenses and qualifying remediation costs including insurance costs. Sites eligible for the Brownfield Cleanup Program (BCP) credits are taxpayers subject to tax under Articles 9, 9-a, 22, 32, 33 who remediate under the brownfield cleanup program (ECL Article 27) and obtain a certificate of completion. Three tax credits for brownfield cleanup exist under Tax Law Sections 21, 22, 23:
Of these, the BRTC credit can be used to support CHP deployment. There are 3 components of costs that comprise the BRTC:
The QTPC is a tax credit similar to, but broader than, an investment tax credit (ITC) for buildings and equipment. The QTPC credit is available for capital costs associated with a combined heat and power (CHP) project, including all equipment and associated structures. The BRTC is an extremely attractive credit. The value of the base credit is 12% for a corporate taxpayer, and 10% for a non-corporate taxpayer. An additional 8% tax credit is available for location in an En-Zone and 2% more for cleanup level Track 1. Therefore, the BRTC can be up to 22% for corporate taxpayers, and 20% for non-corporate taxpayers. As is the case with certain other economic development measures, this tax credit provides a powerful, incentive for CHP development on remediated brownfield sites. These financial incentives are further enhanced when CHP projects on brownfields are co-located within a specially designated EN-Zone. EN_Zones are designated by Empire State Development Corp. If a CHP project is sited at a remediated brownfield site that obtains a certificate of completion from the DEC, the project can benefit from as much as a 22% reduction in total CHP system costs.
What's Required? Sites eligible for the Brownfield Cleanup Program (BCP) credits are taxpayers subject to tax under Articles 9, 9-a, 22, 32, 33 who remediate under the brownfield cleanup program (ECL Article 27) and obtain a certificate of completion. Where Do I Get More Information? There is a great deal of information at the NYS DEC's Brownfield Cleanup Program webpages Brownfield Cleanup Program (BCP) Links include:
4. NYS DEC EMISSION REDUCTION CREDITS (ERC) PROGRAM Air emissions credits can serve as financial incentives for siting CHP. In the Downstate (Severe Non-Attainment) region of NYS, ERCs are typically worth between $9,000 and $15,000 per ton, depending on market demand. A recent price was $11,350/ton.
What are ERCs?
What sites might quality for ERCs?
Calculating ERCs at a Site
ERC = PRIOR ANNUAL EMISSIONS - FUTURE MAXIMUM ANNUAL POTENTIAL
NOx Emission Allowances (EAs)
Energy Efficiency & Renewable Energy (EE/RE) Set-Aside
NOx Allowance Program Specifics The protocols for permitting CHP to participate are still under review at DEC ....No specifics are known yet.... Issues include:
NOx Allowance Markets and Payments States affected by the current program: AL, CT, DE, IL, IN, KY, MA, MD, MI, NC, NJ, NY, OH, PA, SC, TN, VA, WV, and DC. Parts of Georgia and Missouri are expected to participate in future years as well.
Getting to the bottom line !! What VALUE might ERCs and NOx EAs bring to a CHP project? ERCs are likely worth more than $11,000 per ton in SEVERE non-attainment areas, FAR less in Moderate non-attain EA program specifics not worked out.. But consider a POSSIBLE scenario
How Much Can ERCs & NOx Allowances Contribute to Project Economics for Smaller-Scale CHP? Assume 7.5 Tons of ERCs Certified and sold at $11,000 / Ton Assume 4,300 MWH Generated at the Site Assume Formula for Awarding Allowances for Displaced Electric NOX credits this site with 4,300 lbs (2.15 Tons) of NOx Allowances at $2,750/ton * 2.15 tons = $5, 912 per year for 5 Years With those assumptions the value of Emissions Credits is
Contacts and Future Publications
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