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New York State Energy Research and Development Authority (NYSERDA)

An example of a state energy office going to great lengths to serve LMI communities.

Keys to Success

  1. Carve Out Funds For LMI Programs

  2. Allocate More Funds to Soft Costs

  3. Ensure Funding Awards are Flexible, Easy to Use, and Large Enough to Change Behavior for Affordable Multifamily Properties

Agency Overview

The New York State Energy Research and Development Authority (NYSERDA) is the State’s chief energy agency. The Agency is authorized with funding to promote energy efficiency and renewable energy sources across New York State, and to target a specific set of programs to serve LMI projects. NYSERDA is a public benefit corporation and was founded in 1975 and its mission is to “advance energy solutions and protect the environment” through a variety of projects, including research and development of new energy technologies, deployment of renewable energy and energy efficiency technologies, education and outreach on energy efficiency and renewable energy, assistance to low- and moderate-income households, and support for the development of a clean energy economy.

NYSERDA has created innovative programs that provide meaningful energy funds per unit through their LMI programs. These programs take a more comprehensive approach than the typical direct install utility incentives that are typical in the market. These include:

  • Assisted Home Performance with ENERGY STAR: This program provides no-cost or reduced-cost energy efficiency upgrades to income-eligible homeowners and renters.

  • EmPower New York: EmPower New York offers free energy efficiency upgrades to income-eligible households.

  • Clean Heating and Cooling Communities: This program offers financial incentives and financing options for LMI residents to install clean heating and cooling technologies in their homes. Eligible technologies include air source heat pumps, ground source heat pumps, and solar thermal systems.

  • Community Solar for LMI: NYSERDA supports community solar projects that specifically target LMI customers. In addition, NYSERDA has the NY-Sun program that provides direct incentives for solar upgrades with adders for projects that target LMI.

  • Low- to Moderate-Income Financing: NYSERDA offers financing options to help LMI households overcome upfront costs associated with energy efficiency improvements and clean energy installations. In addition, the New York Green Bank (NYGB) is a state-sponsored, specialized financial entity and a division of NYSERDA, that started in 2014 to increase private investment in renewable energy and energy efficiency projects. The NYGB just announced a Community Decarbonization Fund with debt and equity products with concessionary terms for LMI projects.

Agency Snapshot

  • Agency Size: $960 million between 2020 and 2030, of which $614 million is allocated to programs for LMI communities that covers programs for new construction and retrofits of affordable housing

  • Agency Objective: Meet state climate goals, while also allocating at least 35% of annual funding to LMI projects and low-income communities to ensure an inclusive transition to clean energy

  • Funding Source: NYSERDA utilizes funds from multiple sources including: utility rate-payer funding, federal funding allocation, Clean Energy Fund, Clean Energy Standard, Regional Greenhouse Gas Initiative (RGGI), and other funding sources through public and private sponsors

  • Key Players: NYSERDA and New York State Public Service Commission

  • Financing Type: Loans, grants, incentives, credit enhancements

Demonstrating Keys to Success

  1. Carve Out Funds For LMI Programs: NYSERDA and the State Utilities are directed by the Public Service Commission (PSC) to develop a state- wide implementation plan to drive at least 35% of annual funds into LMI Communities. The outcome of the plan has been the allocation of over 60% of funds for LMI communities.

  2. Allocate More Funds to Soft Costs: Several of NYSERDA’s pilot programs include soft costs as an allowable use of program funds, specifically to cover integrated design costs, energy audits and other additive soft costs.

  3. Ensure Funding Awards are Flexible, Easy to Use, and Large Enough to Change Behavior for Affordable Multifamily Properties: NYSERDA gets direct funding from the Public Service Commission (PSC) to provide innovative and flexible pots of funding to the industry. NYSERDA is specifically authorized to create unique programs to serve LMI projects and low-income residents, while also meeting state-wide climate goals. Of the total $960 million, NYSERDA is allocated $614 million through 2030 for LMI programs.

Agency Strengths and Market Transformation

NYSERDA has been very effective at carving out funds to serve LMI projects. At least 35% of funds annually are carved out for LMI projects and low-income communities. This is transformative because NYSERDA is a State Energy Agency that creates flexible pots of funding that do not mirror typical utility program direct-install approaches; instead, it takes a programmatic approach to funding energy into LMI projects directly. The organization has also displayed openness to letting other agencies targeting LMI communities lead, for example granting funds directly to New York State Housing Agencies to administer directly to affordable residential projects. The organization values the benefits of authorizing programs for the long term.

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