By Judith Nemes
Residents at close to two dozen affordable housing buildings will soon be getting electricity from the sun via solar panels on their rooftops.
Hippolito “Paul” Roldan, president and CEO of Hispanic Housing Development Corp., is kicking off a $7 million renewable energy initiative this month at 13 housing projects in Chicago neighborhoods including Humboldt Park, Logan Square, West Town and Rogers Park. More than 3,900 photovoltaic panels and other retrofits will be installed on 21 buildings with 1,300 apartments. Co-generation systems that direct energy from hot water tanks back into the building power supply will be added as another renewable feature.
Mr. Roldan created Affordable Community Energy Inc., a new for-profit subsidiary within HHDC, to carry out these efforts. He estimates the program will result in a 17 percent annual energy savings and an 850-ton reduction in carbon dioxide emissions. The program will be offered to other building owners and managers of affordable-housing projects if the upcoming pilot is considered a success. He’ll also expand the program to the remainder of HHDC’s buildings throughout the city.
This isn’t Mr. Roldan’s first energy-focused foray in lower-income housing. Between 2007 and 2010, HHDC completed $1.5 million in energy efficiency improvements at some of its buildings with the help of the Center for Neighborhood Technology and others. Those efforts led to a 26 percent reduction in annual energy usage, he said.
As co-chair of Mayor Rahm Emanuel’s Green Ribbon Committee and a member of the original group established by Mayor Richard M. Daley, Mr. Roldan had helped implement the Chicago Climate Action Plan’s strategies for reducing the city’s carbon footprint. A key component of that plan calls for retrofitting existing buildings in the city with more energy efficient systems and non-fossil fuel energy options to reduce carbon dioxide emissions and slash utility costs as well. Mr. Roldan decided to do his part, beginning with buildings in his company’s own portfolio.
In recognition of his commitment to greening the Chicago residential and economic landscape, Mr. Roldan last week was honored as a “Partner in Change” by the Delta Institute, a nonprofit that works to boost the local green economy.
Crain’s caught up with Mr. Roldan this week to talk about his upcoming renewable energy venture.
Crain’s: Will the solar panels and co-generation systems power the entire building once they’re installed?Mr. Roldan: The solar photovoltaic panels and co-generation will generate energy for the common areas of the buildings and will generate 20 percent to 25 percent of the buildings’ total energy consumption. It will also reduce the risk of future spikes in energy costs because they’ll be making some of their own energy, and it will help these buildings deal with failures in the grid. Combined, they’re expected to generate over 1 million kilowatt hours a year.
Crain’s: Were you able to tap any state or federal incentive programs to help finance the $7 million price tag for this project?
Mr. Roldan: We’re getting a 30 percent federal tax credit for the solar panel costs and 10 percent for the combined heat and power (co-generation), which totals a bit over $1 million. We’re also benefiting from a federal new market tax credit of about $1.4 million that supports businesses in economically distressed areas. (The U.S. Department of Housing and Urban Development) is giving us $900,000 to test leading edge business models and tools. Also, we got a grant from the Illinois Department of Commerce and Economic Opportunity and another for energy audits from the Center for Neighborhood Technology. We also have our own project reserve money for improvements that are being used to invest in these efforts.
Hopefully in the next 10 years there will be so much efficiency in renewable energy (that’s widely known) that we won’t need public subsidies to get these projects done. My prediction is that very quickly technology will outstrip the need for these public subsidies, but right now we can’t do it without them.
Crain’s: What’s the timeline for finishing this project and then offering to install these systems for others?
Mr. Roldan: We’re starting with one apartment on California Avenue this month and then we’ll continue from there. We’re in the experimental stage and using 25 percent of our own portfolio for that purpose. If the reality matches our pro forma (in energy savings) and it makes sense to move forward, we’ll use more of our own properties and offer it to others as well. There are 60,000 affordable housing apartments in Chicago and we’ll probably begin to reach out to other owners soon to see if they’re interested.
Crain’s: How do residents of these affordable-housing projects benefit from the energy cost savings if they don’t directly pay their utility bills anyway?
Mr. Roldan: There are benefits to the property itself because over time it will have reduced operating costs from the renewable energy systems. That sets the stage for getting additional income in the operating mix and onsite managers will have the option of what to do with the extra capital. They can make improvements in the building or directly in some of the apartments.
We also plan to set up a pilot program for behavior change (in energy usage) among our residents. Once we install the new energy systems, we’ll try to create some type of incentive program with their help, track its impact and share savings with the residents if it gets them to change their behavior to be more energy efficient.
Crain’s: In the bigger picture, how are you engaged in the mayor’s Green Ribbon Committee?
Mr. Roldan: The Green (Ribbon) Committee was Mayor Daley’s idea, but Mayor Emanuel has a different approach to it. He’s focusing on job creation and entrepreneurship in a very powerful way to get the private sector involved in realizing that substantial savings can be achieved (in the green economy). We put together a strong marketing approach and now we’re reaching out to the private sector. If we’re successful, our children and their children will benefit from these efforts.
Judith Nemes is a Chicago-based freelance writer who specializes in green issues and urban sustainability. Her weekly column for Crain’s, “Green Scene,” focuses on the local green economy. View her blog here.
Follow Ms. Nemes on Twitter: @JudithNemes.
Crain’s small-business editor Ann Dwyer is on Google+.
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