Cutting energy costs and emissions

Buildings account for roughly two-thirds of New York City’s greenhouse gas emissions. Local Law 97, one of the most ambitious building emissions laws in the country, was passed in 2019 to tackle this issue. The law sets strict emission limits for large buildings, which tighten over time, and imposes financial penalties for those that fail to comply. 

But while the mandate is clear, the pathway to compliance is not. Emissions are not falling fast enough, and many building owners—especially those of older, rent-regulated, nonprofit, and mid-sized multifamily buildings—cannot afford the upfront costs of the retrofits needed to comply with the law. As many as 75% of covered buildings will not be compliant by 2034 without significant retrofits. These buildings tend to be the least efficient and often house economically vulnerable New Yorkers struggling with rising energy costs.

An effective tool to cut emissions and energy costs already exists but remains dramatically underused in New York. Commercial Property Assessed Clean Energy (C-PACE) enables building owners to finance energy efficiency, electrification, insulation, and other retrofits through long-term, fixed-rate financing that is repaid with energy cost savings via a property tax assessment. The financing stays with the building, not the owner, and can extend up to 30 years, aligning the repayment with the lifespan of the improvements. 

Importantly, these projects do not require refinancing or significant upfront capital, and the financing comes from private investors and lenders, not already-strapped public coffers. In the past, investments have even come from labor union pension funds, which made sound investments while creating new jobs and tackling emissions. Repayments are secured by a property tax assessment, collected alongside property taxes, and have a history of very low default rates. C-PACE investments can also often be combined with other incentives, including utility rebates, tax credits, and housing grants.

In practical terms, C-PACE can fund the kinds of upgrades that New York’s buildings desperately need, including high-performance windows and insulation, modern heat pump systems, efficient hot water and ventilation upgrades, solar and battery storage, and building controls that reduce waste while improving indoor air quality. These investments cut emissions, lower operating costs, reduce energy bills, and make buildings healthier and more comfortable for the people who live and work in them.

Yet despite authorizing C-PACE years ago, New York has barely scratched the surface of its potential. As of 2024, statewide, only three dozen C-PACE projects have been completed, representing nearly $300 million in investment. In New York City, adoption has been limited to a small handful of large, high-profile deals. That scale is wildly mismatched with the challenge ahead. Local Law 97 compliance alone requires tens of billions of dollars in building investment by 2030. Without a massive expansion of retrofit financing, the law risks becoming a system of fines rather than a catalyst for transformation.

Scaling C-PACE in New York City will require deliberate action. The city should set clear, measurable targets for C-PACE deployment that are directly tied to reductions in emissions and energy costs. The program must be fully integrated into the city’s climate action plans, including compliance planning for Local Law 97. The City should scale up the NYC Accelerator, which offers free assistance to building owners. Additional campaigns are needed to educate and engage building owners, and particularly, contractors who will be most actively involved in spearheading the projects. Transaction costs need to come down through standardized retrofit packages and streamlined approvals.

Every winter draft and summer heat wave highlights how inefficient buildings carry costs for both consumers and the climate. New York already has the climate laws, technical solutions, and financing tools to address this challenge. C-PACE can put capital and people to work retrofitting buildings, slashing emissions, and cutting energy costs. Embracing and scaling C-PACE can position New York as a leader on both affordability and climate action.