1. STRENGTHEN AND EXPAND EFFORTS TO ENSURE THAT LOCAL LAW 97 SUCCEEDS. New York City’s emerging green economy has enormous potential to spark sustained economic growth and create pathways into well-paying jobs for thousands of lower-income New Yorkers. But realizing this opportunity will only be possible with a major, sustained focus on ensuring that Local Law 97 succeeds in catalyzing emissions-reduction investments across the city’s buildings sector. Today, that progress is far from assured, as building owners grapple with high borrowing costs, long payback periods, technical and logistical challenges, and a regulatory scheme in which the cost of compliance significantly outweighs the penalties. To ensure that LL97’s emissions-reduction targets are achieved via meaningful private sector investment in building decarbonization and electrification, policymakers should take several steps now to ensure future progress:
- Establish a new NYC Green Building Fund. Accelerating the pace of building decarbonization will require expanded access to affordable capital that can be deployed to finance building retrofit projects. Many of the buildings that would benefit the most from major retrofits are also in difficult financial shape, with high vacancy rates and operating costs, and lenders have become increasingly risk averse. To help finance a much faster transition to lower-emissions buildings, New York City should work with the private sector to establish a new Green Building Fund—a revolving loan fund that will provide flexible, low-interest loans to buildings to finance decarbonization projects. Creative financing options could include loan repayment tied to new tax credits in the federal Inflation Reduction Act, helping buildings with their cash flow, as well as repayment plans pegged to the difference in energy usage before and after retrofits, with buildings repaying at least part of their loans with the savings.
- Expand the PACE Financing program. The city should also expand the innovative but small-scale PACE Financing program, which helps connect eligible buildings to lenders who can help finance retrofit projects. The program works by offering long repayment periods—up to 25 years—which significantly lowers monthly costs. But to date, the program only includes 15 authorized lenders, just a handful of which are based in New York City, and generally does not cover projects under $500,000. The city should work with the state to expand this program, adding additional lenders including community development financial institutions with expertise partnering with smaller and lower-income building owners, and include more options for loans under $500,000 and over $5 million.
- Harness existing incentives to help offset the cost of expensive upgrades. Alongside the creation of a new fund for building retrofits, city leaders should ensure that existing local tax incentives, including the city’s Industrial & Commercial Abatement Program (ICAP), the New York City Industrial Development Agency (NYCIDA) programs, Manhattan Commercial Revitalization’s (M-CORE) program, and the BUILD NYC program for tax-exempt organizations can all be tapped to help achieve LL97 compliance—uses that are not explicitly eligible today. At the state level, policymakers in Albany should amend and expand the J-51 tax abatement for renovating residential buildings, ensuring that the abatement can be applied to LL97 compliance projects.
- Launch a Green Building Assistance Corps to bolster the effectiveness of NYC Accelerator. Shortly after the city passed LL97, it created the NYC Accelerator to provide personalized guidance to help building owners navigate the law’s impact. Although this program has succeeded in connecting with thousands of buildings as an initial touch-point toward LL97 compliance, our research indicates that a much deeper level of hands-on guidance will be needed to help many more buildings make the investments needed to decarbonize—especially from 2030 onward. To prepare for future needs and get ahead of current capacity challenges, the city should enhance NYC Accelerator to keep pace with growing demand. At the same time, much more technical assistance will be needed in the years ahead—including industry-specific expertise that the city’s Accelerator program is not well equipped to provide. To meet this challenge, the city should launch a Green Building Assistance Corps, drawing from the city’s deep well of private sector expertise, as well as the industry associations, trade groups, financial services firms, architecture and engineering companies, nonprofit green building organizations, community development organizations, and other potential partners who are best positioned to help deliver this assistance. Services could be offered at a sliding scale, with free, in-depth consultations provided to eligible buildings, as well as referrals to relevant state programs, such as NYSERDA’s Multifamily Buildings Low-Carbon Pathways Program.
- Revise LL97’s penalty structure to align with compliance costs. While several actions are needed to help building owners invest in LL97 compliance, policymakers should also consider revisions to LL97’s penalty structure, which currently provides little if any financial incentive to decarbonize. Many building owners say that under current conditions, they are likely to opt for paying the penalty instead of investing in costly retrofits. At the same time, the two-year extension of the “good faith” provision makes it even less likely that buildings will invest heavily in decarbonization before 2030. Lastly, buildings may be eligible to purchase renewable energy credits to offset as much as 100 percent of their emissions over the pre-LL97 baseline. To ensure that far more buildings actually make the decarbonization investments needed to reduce emissions and help spur the growth of green jobs, the city should consider adjustments to these mechanisms. The penalty rate—currently $268 per ton of carbon dioxide over their mandated limit—should be increased over time if compliance lags. Likewise, while RECs can provide an important source of funding for renewable energy development, future rules should limit their use to offset no more than 25 percent of a building’s emissions over the baseline.
2. PREPARE NEW YORK CITY’S GRID FOR AN ELECTRIFIED FUTURE. New York has a massive opportunity in the decade ahead to reduce carbon emissions while sparking job creation by electrifying tens of thousands of buildings across the five boroughs and replacing hundreds of thousands of gas- and diesel-powered cars and trucks with electric vehicles. But this will only be possible if the city and state work together to bolster the city’s electricity grid to meet growing demand and greatly increase the share of the city’s electricity generated from renewable sources.
- Accelerate the completion of key transmission and renewable power generation projects. Major gaps in energy production and transmission capacity are set to emerge as electricity demand in the city increases. The state’s ability to meet New York City’s future electricity demands hinges on the successful and timely completion of several ongoing transmission projects, including the Champlain Hudson Power Express, Clean Path NY, and Propel NY Energy, as well as major new offshore and onshore wind, hydro, geothermal, and solar power generation projects. To prepare the city for an increasingly electrified future, city and state policymakers should take action to enhance transmission capacity and reduce the time it takes to connect local renewable energy sources to the city’s grid. State policymakers should enact the Renewable Action Through Project Interconnection and Deployment (RAPID) Act, which would create a one-stop-shop for the environmental review and permitting of major renewable energy and transmission facilities, and overhaul existing regulations that can add years to project timelines.
- Work with Con Edison to strengthen NYC’s energy grid and reduce interconnection delays. Within the five boroughs, significant new investments will be needed to bolster the capacity of the city’s energy grid to accommodate future demand. Several areas of the city, including the northeast Bronx, southern Brooklyn, and southeastern Queens, are likely to reach or exceed grid capacity if major new electrification efforts succeed, shifting peak demand times from summer to both summer and winter. And although Con Edison boasts one of the most reliable grids in the nation, notching an impressive 99.99 percent uptime in 2022, the future work ahead is significant. The city and state should work closely with Con Edison to ensure that massive necessary grid upgrades and new substations are planned and completed in advance of 2030.22 In addition, city leaders should work with the utility to accelerate the process for buildings that need to acquire service upgrades, a requirement that currently serves as a barrier for building owners that want to electrify their properties.
- Introduce incentives to usher in more grid-interactive buildings. Emerging technologies can provide building owners with important new mechanisms for achieving decarbonization goals in the form of grid-interactive buildings—buildings that use advanced building control systems to optimize performance, reduce emissions, generate or release energy as needed from rooftop solar and in-building batteries, and lower operating costs. The city and state should introduce new incentives to promote these investments, helping to make the grid more efficient and resilient, while improving the performance of individual buildings.
3. UNLEASH GREEN TECH INNOVATION THROUGH CHALLENGE-BASED PROCUREMENT. New York City is home to a small but growing number of climate-tech, clean-tech, and other sustainability-focused start-ups, and this ecosystem is poised to grow significantly in the years ahead. One key opportunity to help unlock more growth potential among the city’s green tech start-ups is by dramatically expanding the use of challenge-based procurement. Today, start-ups often struggle intensely to compete for city and state contracts. Big companies have several major advantages, including the ability to compete for contracts that may not lead to payment for a year or longer. In recent years, entities such as the Brooklyn Navy Yard, Downtown Brooklyn Partnership, and Governors Island have taken steps to encourage more start-ups to pilot their technologies in New York City. But much untapped opportunity remains for effective demonstrations of new green tech to grow into citywide deployments. To achieve this, the city should dramatically expand challenge-based procurement for climate solutions—for everything from AI-powered building control systems to battery storage infrastructure that can replace street vendors’ reliance on gas-powered generators. Despite the city’s growing climate tech ecosystem, the city’s current procurement process is nearly impossible for start-ups to access. A major expansion of challenge-based procurement—a competitive process in which successful pilot projects can grow into larger procurement contracts—can help start-ups bring their innovative products and services to scale. NYCEDC should work with other agencies including the Department of Citywide Administrative Services to launch new challenge-based procurement processes for a range of products and services that will help accelerate decarbonization efforts and ensure that more of the city’s pioneering start-ups are able to test and grow their technologies in the public sector.
4. ACCELERATE THE PACE OF EV ADOPTION BY RAMPING UP EV INFRASTRUCTURE.
- Rapidly deploy EV charging infrastructure and consider new incentives. Achieving the city’s emissions-reduction and job-creation goals in the green economy will only be possible with a massive transition away from gas- and diesel-powered cars and trucks to electric vehicles and zero-emissions vehicles of all types. But progress has been slow, in part because of the high cost for consumers and in part because existing EV and zero-emissions transportation infrastructure—from charging stations to micromobility lanes to secure bike parking—remains far too limited or even nonexistent. NYCEDC’s recent push to develop industrial-scale EV-charging hubs on city-owned property is a strong start, as is NYCDOT’s proposed rule to expedite approvals of private property owners installing chargers on public sidewalks. But to induce far more uptake for electric vehicles, including major commercial fleets like school buses and delivery trucks, the city will need to do more. Key steps should include designating thousands of city-owned sites for EV charging infrastructure—from lampposts to parking lots to curbside sites; launching challenge-based procurement with clear scale-up opportunities for successful pilots; identifying existing city tax incentives where rules changes or clarifications can make EV charging and micromobility infrastructure investments eligible; expanding rapid charging infrastructure that can support the energy needs of electric trucks; enforcing the implementation of Local Law 55, which requires new parking facilities to include charging stations; and developing new incentives to spur the introduction of charging stations in existing parking facilities. The state should also consider implementing new EV tax credits, in the event that the federal government reduces or eliminates the $7,500 credit on new purchases.
- Invest in micromobility infrastructure to spur more widespread adoption and increase safety. The growing appeal of electric micromobility options like e-bikes and e-scooters also presents New York with a major opportunity to decarbonize transportation while boosting green jobs. But further adoption by both consumers and commercial fleets will be constrained without additional infrastructure investments. The Department of Transportation’s recent authorization of e-cargo bikes and plan to install 500 secure bike storage with possible e-bike charging capabilities are important steps. Additional actions should include a state-level legalization of additional cargo e-vehicles (currently, state law restricts e-cargo bike widths to 36 inches or fewer, and motorized trailers are illegal). Policymakers should work with the Department of Transportation to create dedicated electric micromobility lanes and ramp up the expansion of bike lanes, which has slowed alarmingly in recent years. The city should also launch a network of secure bike parking stations that can double as e-bike charging hubs. Finally, the city will have to build on recent progress to help make e-bikes safer, including the launch and expansion of e-bike battery charging and exchange hubs and an expansion of voluntary battery trade-in programs.
5. EXPAND SOLAR POWER GENERATION BY TARGETING NEIGHBORHOODS AND SECTORS WITH THE MOST UNTAPPED OPPORTUNITY. New York has made significant progress incentivizing the deployment of solar power on city rooftops over the past few years, reaching a record 621 megawatts of power generation capabilities in 2024. At the same time, several parts of the city are lagging behind, including many lower-income communities, as well as most of the city’s large commercial and industrial buildings. For instance, just 7 percent of the city’s installed solar capacity is on large commercial or industrial buildings, and only 14 percent is located in the Bronx. Fortunately, the City of Yes for Carbon Neutrality plan addresses some of the key barriers to solar installation, such as overly restrictive rules around siting panels on rooftops and installing battery storage systems—rules that have largely inhibited the installation of solar on large multifamily and commercial buildings. However, to sustain this key sub-sector’s impressive growth, city and state policymakers should do more to expand solar adoption by making solar power installation more affordable for lower-income buildings, targeting some incentives to large commercial and industrial buildings, and installing far more solar systems on city- and state-owned buildings.
- Replicate the city’s NYCHA community solar program across other city-owned buildings. The New York City Housing Authority (NYCHA) has made a significant commitment to incorporate 30 megawatts of solar energy on its properties by 2026 through the implementation of its community solar program, with as many as 30 major projects underway as of 2024. The mayor should allocate funding for other agencies and public entities—including the City University of New York and the city’s three public library systems—to adopt similar solar programs and set a target of deploying 150 megawatts of solar power generation capacity on city-owned buildings by 2030. These investments can also help reduce energy costs and ultimately save the city some operating dollars.
- Target state incentives to expand solar adoption in lower-income communities. The city and state have an important role to play in making solar more affordable—boosting uptake in areas where the pace of installation has lagged far behind, including across much of the Bronx. First, state policymakers should expand the residential solar tax credit by making it refundable for low-to-moderate income households and increase the maximum tax credit amount to $10,000 to adjust for inflation, and include energy storage. The state should work quickly to deploy funds from the federal Solar for All grant competition, which can help address the significant gap in uptake for rooftop solar among New York City’s lower-income buildings, and allocate at least $125 million to overcoming the barriers to solar installation on multifamily and affordable housing, expanding community solar programs, and supporting workforce training in the solar industry.
- Strengthen requirements around rooftop solar and green roofs. City government can also do more to strengthen existing mandates around solar. As currently designed, Local Laws 92 and 94—which require solar panels or green roofs on all new construction and buildings undertaking major roof renovations—include a broad range of exemptions, which have constrained the impact of these regulations. For instance, the law does not apply to rooftop structures and mechanical equipment, setbacks, terraces, and recreational spaces, among other uses. Policymakers should consider options for revising these exemptions or creating new protocols so that rooftops with these and other exempted uses still devote at least a portion of available space to solar and green roofs—such as a solar canopy above a terrace, or a green roof surrounding mechanical equipment.
6. LEVERAGE THE CITY’S ZERO WASTE GOALS TO SPARK ECONOMIC GROWTH. New York City has a long way to go to reduce the approximately 12,000 tons of waste generated daily, the majority of which ends up in landfills. Fortunately, taking steps to get New York City back on the path to achieving zero waste can help accelerate job creation in the green economy. The city should launch Reuse NYC, a major new five-borough effort to divert reusable materials from the waste stream and incentivize companies to switch from single-use products, building on the encouraging release of NYCEDC’s Circular Construction Guidelines for capital projects. Key steps could include identifying a publicly owned site across the five boroughs where companies, start-ups, and nonprofits can develop sustainable waste management businesses with below-market-rate land leases; targeting existing tax incentives to include the infrastructure needed to facilitate reuse and recycling; implementing a disposal surcharge on waste, with the funds allocated to support waste reduction, reuse, and recycling projects; and
passing legislation requiring producers and distributors of packaging materials to create and implement packaging reduction and recycling plans.
7. RAPIDLY BUILD THE INFRASTRUCTURE NEEDED TO SUPPORT THE OFFSHORE WIND INDUSTRY. New York stands poised to emerge as a national leader in offshore wind, with major production capacity coming to Long Island in the next two years. But even though the potential for significant job creation is evident, there’s no guarantee that these jobs will be located within the five boroughs. That’s because neighboring states have already developed the capacity to manufacture, assemble, install, maintain, and service offshore equipment—
including for New York’s inaugural offshore wind farm, South Fork, which was assembled and installed from ports in Rhode Island and Connecticut. Encouragingly, city and state policymakers are proactively addressing this challenge. NYCEDC has invested $191 million in converting existing marine facilities, such as the South Brooklyn Marine Terminal, into an offshore wind port. Likewise, Empire State Development recently granted $48 million to convert the Arthur Kill Terminal on Staten Island. But city policymakers can’t afford to take their eyes off the prize: the swift implementation of these initiatives will be essential for positioning New York City as a frontrunner in the rapidly expanding offshore wind industry and encouraging the development of an onshore ecosystem of businesses that can grow alongside the sector even as timelines are suddenly unclear, following the Trump administration's order to halt wind farm permitting. At the same time, the city should identify opportunities where turbine manufacturing, the most labor-intensive part of the industry, could be done within the five boroughs, and take steps to encourage the growth of offshore wind-related manufacturing jobs.
