Future Shock

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The first snow of the year is falling, and under the overcast sky, Anthony Pereira is making his pitch about why photovoltaic power belongs in New York City. “Solar panels make power whenever there’s light, even this type of diffused light,” says Pereira, whose company, altPower, is a leading solar installer in New York. “And today there’s a lot of reflected light off the snow.”

Pereira is standing in Battery Park City, in front of a new apartment building that will feature 3,400 square feet of “building integrated” solar panels–panels that help form the exterior walls. Several floors’ worth of blue squares and rectangles already rise up the middle of the façade. “The solar wafer is recycled from a post-industrial computer chip,” explains Pereira. “It’s a hard drive. It looks like a CD, right? They strip it of all the plastic and circuits, and they cut it and dye it blue and make it into a solar wafer. They’re taking a product that would have been thrown in the ground somewhere, and they’re using it for something really cool–a solar electric system.”

According to Pereira, a growing number of New Yorkers are agreeing that solar is cool. “If you called me for a residential system today,” he says, “you’d have to wait 10 or 12 weeks to get it on your house.” Solar installations increased 80 percent nationwide in 2001 alone. But as Pereira notes, the industry is still in its infancy. “It will be about five years before we see any significant amount of solar every day, in everybody’s life,” he predicts. “In 10 years, it’ll be all over the place.”

In New York State, government has stepped up to help entrepreneurs like Pereira along. In his State of the State address this January, Governor George Pataki announced a “renewable portfolio standard” of 25 percent within the next 10 years. That means that by 2013, New York utilities must get a quarter of their electricity from such sources as the sun, the wind, rivers, tides and the heat of the earth. (The current figure is 17 percent, most from large dams, such as the one near Niagara Falls.) Pataki’s latest initiative comes on the heels of his Executive Order 111, which in June 2001 directed that all state agencies strive to get 10 percent of their energy from renewable sources by 2005, with the figure rising to 20 percent by 2010.

State subsidies also pay for many renewable-energy projects, and they remain essential. The New York State Energy Research and Development Authority (NYSERDA) gave a $150,000 grant to the Battery Park City system, which will cost $500,000 in all. In return, the building will get 33 kilowatts of electricity–5 percent of the power used by its elevators, hallway lights and common rooms.

“It seems expensive,” admits Pereira, “but it’s really that coal, gas and oil are too cheap. Society has not put a price on pollution. You have to pay to dump your garbage, but you don’t have to pay to put a smokestack in the air and pollute.”

New York State isn’t charging for air pollution yet, but Pataki’s latest action gives it one of the most aggressive of the nation’s 14 state renewable portfolio standards. Over the next 6 to 12 months, the Public Service Commission (PSC), which regulates utilities statewide, will meet with utilities, consumer groups, generators of renewable electricity, and other interested parties to work out the rules that will govern the standard.

Advocates for renewable energy see great hope in Pataki’s order, not only for their cause, but for New York State as a whole. David Wooley, northeast representative of the American Wind Energy Association, envisions a potent economic force coming to life: “New York is a fossil fuel–poor state. When we develop our indigenous renewable resources, we avoid sending our dollars on a one-way trip down a gas well or a coal mine somewhere else.”

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Solar power is one of a number of increasingly popular types of renewable energy–so-called because the source of electricity doesn’t get used up as coal and oil and natural gas do. Though the sun will burn out eventually, we can count on a steady stream of its light for the next few billion years or so. Wind power is also renewable, as are hydropower, tidal power, and geothermal power (created by drilling deep into the earth for scalding water to make steam to turn turbines). Fuel cells and biomass round out the renewable portfolio. Biomass refers to the burning of fast-growing wood, crop waste, landfill gas, and other abundant biological matter. Fuel cells run on hydrogen–which is often generated by burning natural gas, and therefore not technically renewable but they use the fuel two to three times more efficiently than a power plant does. Research continues on ways to separate the H from H2O, so a fuel cell can run on water–making it completely renewable.

The main appeal of renewable energy, aside from the fact that it never runs out, is that it is so much cleaner than energy from fossil fuels. According to the Union of Concerned Scientists, conventional power plants emit one-third of all nitrogen oxide nationwide, two-thirds of all sulfur dioxide and one-third of all carbon dioxide. All three are so-called greenhouse gases, and all are increasingly blamed for global warming and other changes in the climate. The emissions from power plants rose 25 percent between 1990 and 2000, more than those of any other sector of the economy. Fossil fuel plants also emit pollutants such as carbon monoxide, hydrocarbons and soot. Most renewables, by contrast, generate energy emissions-free, or virtually so.

As with any industrial product, the construction and operation of renewable facilities does cause some environmental damage. Manufacturing solar panels often involves toxic materials such as cadmium and arsenic. Unless it’s tightly controlled, the burning of biomass causes air pollution and greenhouse gas emissions. Hydroelectricity is technically renewable but not always considered green, because the dams impede fish passage and destroy riverine ecosystems. And wind turbines can kill large numbers of birds, though the industry has gotten better at addressing the problem through design and siting.

But the harm pales next to that of wresting coal, oil and natural gas from the earth and transporting it around the country–or around the world. Advocates of renewable energy point out other benefits in the post-9/11 world, too, including decreasing the number of terrorist targets, closing nuclear reactors such as the ones at Indian Point, and lessening the strain on an overloaded and vulnerable electricity grid.

That last problem is particularly severe in New York City because it’s a “load pocket”–a geographically isolated area to which a great deal of electricity must flow through very few transmission lines. Electricity use in the city is rising rapidly: Five days last summer were among the top 10 ever for electricity use in the city, with a peak of 10,587 megawatts, according to Chris Olert, a spokesperson for Con Edison. [See “What’s a Megawatt?” below.] Con Ed projects that peak demand will grow 1.3 percent a year for the next five years; that, coupled with other factors such as the need to retire aging plants, will result in a shortfall of 2,000 to 3,000 megawatts by 2006, according to the New York Building Congress, a trade group. And though New York requires that 80 percent of the city’s power be generated within the five boroughs, no major power plants have been built in the city since 1977, and only half a dozen expansions are in the pipeline.

Mayor Michael Bloomberg’s Economic Development Corporation would not discuss renewable energy with City Limits, calling it “premature” until the administration releases its overall energy plan. But in a city starved for power, renewable energy is gaining a foothold, bit by bit. In 1996, New York City Transit installed one of the largest rooftop solar arrays in the world at the Gun Hill Bus Depot, in the Bronx. The 300-kilowatt system provides 15 percent of the depot’s electricity, saving $60,000 a year. The agency already had 30 kilowatts worth of panels on a warehouse in Queens, and it’s now installing solar panels in the canopies of two outdoor subway stations–Roosevelt Avenue/74th Street, in Queens, and Stillwell Avenue/Coney Island, in Brooklyn. Two maintenance facilities in Queens will be getting 100 kilowatts of solar panels and a 200-kilowatt fuel cell each. “On a good sunny day,” says A.J. Singh, chief of special projects at New York City Transit, “they will be off the grid”–producing all the electricity they use.

Solar panels also perch atop the Bronx Veterans Administration Hospital and a recycling center on Rikers Island. They line two sides of the 48-story Condé Nast building, at 4 Times Square. In October, the Greenpoint Manufacturing and Design Center, a Brooklyn nonprofit that houses small manufacturers, installed 115 solar kilowatts on two buildings–the largest commercial installation in the city. “Industry is generally associated with environmental damage,” says Paul Parkhill, who coordinated the $900,000 project. “We wanted to combine industrial uses with environmentally friendly work. And it was a means of insulating our tenants from huge fluctuations in electricity rates.” The project received two $300,000 grants, one from NYSERDA and one from a nonprofit consortium called Clean Air Communities.

The Whitehall Ferry Terminal, at the tip of Manhattan, will soon have solar electricity, as will New School University, the New York Aquarium, the Brooklyn Children’s Museum, the Queens Botanical Garden and the Museum of Jewish Heritage. And four new ferry terminals will feature a New York City rarity: windmills, eight in all.

Fuel cells, though still quite expensive, are also growing in popularity. In New York City, they power the Central Park police precinct and its patrol cars. Parts of 4 Times Square, the North Central Bronx Hospital, the New York Aquarium, and St. Vincent Catholic Medical Center use fuel cells, too. Two cells owned by the Sun Chemical Corporation, on Staten Island, hold the national record for continuous operation: more than 40,000 hours.

New York is also the scene of the nation’s first foray into tidal power: A Virginia company is testing a water turbine in the East River. Modeled after a wind turbine, it’s designed to turn with the tide and to avoid the environmental damage of a dam. In five years, the company hopes to have 500 “free-flow” turbines 12 feet under the water off Roosevelt Island, producing 10 megawatts of electricity in all.

Even biomass may make an appearance on the city scene within the next decade. A nonprofit called Earth Pledge is working on a plan to use some of New York’s food waste–almost 1 million tons a year–to produce energy. One of its projects aims to use wastewater from the Brooklyn Brewery to fuel the brewery itself and/or its delivery trucks. In the long term, the group wants to build an “anaerobic digestion facility” in the city that would capture the methane produced by decaying food and use it to power fuel cells. The methane, a potent greenhouse gas, would otherwise be released into the atmosphere.

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Renewables have been much slower to develop on the residential side of the street. Fuel cells are currently impractical for single-family homes, but a local nonprofit called the Community Environmental Center is hoping to site one in an apartment building on Roosevelt Island soon. The 200-kilowatt unit will provide 25 percent of the building’s electricity and heat 20 to 30 percent of its water to boot–for a cost of $1.2 million. “We’re doing this not because it’s economically feasible at this time,” says Rick Cherry, the center’s director, “but to demonstrate it, to monitor it and prove that it can produce the kind of energy we think it can.”

Solar cells are somewhat more established. The first residential photovoltaic, or “PV,” system, installed on the terrace of a Manhattan apartment, was recently dismantled after its owner passed away. (Her family, however, is planning to fund a solar installation in her name at New School University.)

The second residential system is still working. The two-story brick home of its owner, Sholom Gootzeit, faces Cooper Park, in Williamsburg. His 1.3-kilowatt system, installed in 2002, consists of two arrays of six panels each, set about six feet apart. Gootzeit, a physician, says he and his wife get about a third of their power from the sun. “The problem is,” he says, “if you want to do it as an individual, it’s just a lot of trouble.”

That is a complaint echoed by other solar panelists in New York City, and it seems to stem from the pioneering nature of their undertaking. Standard systems are designed for the shingled roofs of the suburbs; the city Department of Buildings is not used to issuing permits for photovoltaic panels; some solar installers are not used to working in New York; and Con Ed engineers must inspect each system to make sure it won’t endanger line workers during a blackout. All of this adds up to delays for homeowners.

Ben Baxt spent more than two years getting his 2-kilowatt photovoltaic system up and running. Solar panels have a 20- to 30-year lifespan, but, as Baxt learned, components don’t always work properly; he just had some replaced. He and his wife are both architects. “One of the reasons we did this was to be guinea pigs,” he says. “There are a lot of kinks in the system still. We’re not ready to push it hard yet, but once we’re satisfied that it makes sense, we will.”

He’s already satisfied with his purchase, though. “From a straight economic point of view, it doesn’t make sense,” he admits. “At today’s electricity rates, it probably costs us $20 a month more. But we’re active in some environmental advocacy organizations where we donate far more than that. Why not do something directly? This could save several thousand pounds of greenhouse gases a year.”

Pablo Calero, a school teacher in Queens, also owns a 2-kilowatt system, which powers his entire apartment and then some. “I got the system installed in August,” he says, “and I haven’t paid a bill since!” That’s because of New York State’s “net metering” law, which requires utilities to buy at retail price any excess power generated by a residential photovoltaic system. Calero, who’s a live-in landlord, saves $43 a month. His tenants’ apartments upstairs are powered conventionally.

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Being a tenant, however, does not prevent anyone from buying green power. About 100 resourceful pioneers get it from Con Edison Solutions, which is currently the only company selling renewable electricity in the city. The power doesn’t come from solar panels or fuel cells, which lend themselves more to “distributed,” or on-site, generation. Instead, 20 to 25 percent comes from the 30-megawatt Fenner wind farm, near Syracuse, New York, and the rest from two “run of the river” hydroelectric plants upstate, one in Walden and one in Chateaugay, near Quebec.

Run-of-the-river hydroelectricity is considered greener than most because it doesn’t involve storing large amounts of water behind a dam and releasing it in a torrent to meet power demands. Typically, a run-of-the-river dam was built decades earlier, for some other purpose; later, an owner decided to use the water that sometimes flowed over the dam to generate electricity. New York State has about 4,400 megawatts of run-of-the-river capacity, though many projects generate 10 megawatts or fewer.

The other commercial green alternative in New York State is wind energy. New York has only three wind farms at the moment, for a total of 48.2 megawatts. Five more in the planning process would add about 315 megawatts. (A study by the American Wind Energy Association indicated some 5,000 megawatts of wind potential in the state.)

Wind is currently more expensive than hydro, which is why Con Ed Solutions’ product is weighted more heavily toward the latter. That gives the green power a price markup of only half a cent per kilowatt-hour. For the average residential customer, the difference is about $21 a year–or as Christine Nevin, head of public relations, puts it, “the cost of a cup of Starbucks coffee, per month.”

The company attributes its low number of green customers not to price but to a lack of marketing; it’s been waiting for the green product to be certified by Green-e, an independent nonprofit based in San Francisco. Green-e’s mission is to keep power companies honest: to make sure they buy as much renewable energy for their customers as they say they’re buying and don’t “sell” the same electricity to more than one customer. Green-e approval of an electricity offering also indicates that the organization has audited a company’s contracts, invoices, and billing statements and has determined that its “green” electricity is in fact green.

Since New York operates a statewide electricity grid, the actual electrons coming into your house are probably not the exact ones generated by, say, the local wind farm. It’s all part of the same pool. But Anne Marie McShea, the mid-Atlantic coordinator for Green-e, says it’s important to get as much green energy as possible into the mix. “Think of the power pool as a bathtub: How much clean water is going in, versus dirty, polluted water?”

One other power company, 1st Rochdale Cooperative Group, plans to sell New Yorkers green energy–primarily wind and run-of-the-river hydro, plus some landfill gas and solar–starting this spring. Since 1st Rochdale was originally created by cooperatives, which still constitute about half of its customers, the company wants to keep its electricity as affordable as possible. It will offer various green products, with a price differential ranging from 1 cent to 2.5 cents per kilowatt-hour. The more expensive products will have a greater percentage of wind energy. “But our second and more effective strategy,” says Tom Thompson, vice-president for sustainable energy, “is to help buildings reduce their energy consumption,” through measures like new lighting and appliances. That should save enough to cover the higher cost of the green power.

Thompson cautions, however, that the current supply of renewable energy is limited: “If we could get one-half of 1 percent of the residential customers in New York City to come to us for green, we’d be able to sell all of the output of all of the windmills that have been installed in New York over the last five years. We’d gobble it up, just like that.”

So the third option for those who want clean power is to buy a “tradable renewable certificate,” also known as a green tag. It’s a complicated concept, but essentially you end up with two electric bills. You buy your actual, conventionally generated electricity from your regular supplier. Then you buy the “attributes” of green power from another supplier. McShea explains, “If the going price for electricity in New York is 10 cents per kilowatt-hour, and green electricity costs 12 cents per kilowatt-hour, you’re going to pay your 10 cents to your base electricity provider, and 2 cents for a certificate from a renewable-energy provider. What that 2 cents ensures is that the renewable-energy provider can sell its power into the pool at the going rate and collect the difference from you.”

Five companies sell green tags in New York State–Community Energy, Sterling Planet, American Wind, the Bonneville Environmental Foundation, and 3 Phases Energy Services. (Businesses can also buy from Aquila.) The Manhattan-based Natural Resources Defense Council (NRDC) covers half of its electricity use with tags from the Madison Windpower Project, in central New York. Ashok Gupta, director of the NRDC’s air and energy program, calculates that the wind purchase keeps 60 tons of carbon dioxide out of the atmosphere every year.

It also brings cash back to the wind producers. Wooley, of the Wind Energy Association, explains how the business model works: “Wind projects sell their electricity into the wholesale grid–that’s one set of revenues–and then sell green tags, or emission credits, to a Con Ed Solutions or a Community Energy.” The federal government kicks in 1.5 cents a kilowatt-hour for the first 10 years, through a production tax credit.

So far, these revenue streams alone have not been enough to make investors leap up to fund wind farms. Before the renewable portfolio standard, says Wooley, “It was very difficult to finance, build, and sell renewables in New York. If you put up a wind farm that costs about $1 million per megawatt of installed capacity, and the equipment has a 25- to 30-year lifetime, you need to have long-term contracts in order to finance and build.” The governor’s plan, Wooley and other renewable advocates believe, will finally push utilities to sign long-term contracts with wind farmers–who will then be able to attract low-cost financing to erect more windmills.

Larger generators may decide to get in on the action, too. “Anything that encourages a clean environment, we support,” says Ed Yutkowitz, a spokesperson for Keyspan, which has helped install three fuel cells in the city. “As a proponent of distributed generation, we may want to get involved with some of the technologies ourselves. There’s been talk in the company for years about wind power. This may give some impetus to doing something about it.”

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Most observers agree that the renewable portfolio standard will have a sizeable impact on the wind industry, but the outlook is less clear for distributed technologies. Solar panels and fuel cells tend to be bought by the end-user of the electricity, not by a utility. And end-users still encounter a number of roadblocks to generating their own electricity. For one thing, commercial and industrial users can’t recoup any of their costs by selling excess power back to the utility; net metering is limited to residential solar arrays of 10 kilowatts or less.

Renewable contractors in New York City also cite onerous fees and regulations for connection to the utility grid. “The people in charge of interconnection at Con Ed are more used to independent power producers–small power plants connecting to the grid,” says Tom Leyden, vice-president of California-based PowerLight, which installed the Greenpoint Manufacturing and Design Center system. “So all the technical rules are written around power plants, and there’s this slew of regulations and hoops we have to jump through in order to get permission to connect.”

Utilities, for instance, can require numerous studies and modifications to a system before they’ll allow interconnection. “They don’t want a renewable-energy system putting power out on the grid at the same time that linemen are working on restoring service,” explains Fred Zalcman, director of the Pace University Energy Project. “It’s a valid concern, but there’s a cost issue, too. What level of protection is adequate? The installers have asserted, with some validity, that Con Ed has gone overboard in terms of what it’s requiring.”

Another complaint regards standby charges, which compensate a utility for standing ready to provide power if the renewable source doesn’t generate enough. But Leyden maintains, “That’s completely ridiculous in the case of PV,” which tends to generate power during peak demand times, when the utility most needs it, and only draw power from the system in the off hours–at night.

The Public Service Commission is currently considering a new rate structure for independent generators in New York City and Westchester County, RA-14, which would raise the standby rate and subject small systems to the charge for the first time. Submitted by Con Edison last June, the proposal has generated fierce opposition from manufacturers and users of distributed generation (both renewable and not), including hospitals, apartment houses, and manufacturing facilities. “The concern is that what will come out of this process will be a standby charge that really destroys the economics of these types of systems,” says Zalcman. He maintains that the costs to utilities don’t merit a rate hike: “It’s like your local fire department. They have to be prepared to put out a fire in any house in the community, but they don’t need a fire engine for every household.”

Ironically, if a price-structure change is approved by one state agency, it could kill some of the showcase projects funded by another. Starwood Hotels and Resorts, for instance, received a $920,000 grant from NYSERDA to install a 250-kilowatt fuel cell at its Sheraton Towers, in Manhattan. “Con Ed has been saying they need more supply in Manhattan, and several companies, like Starwood, answered the call. Many of these projects were made possible by grants from NYSERDA,” wrote Starwood spokesperson Mark Ricci in an email to City Limits. But then, he added, “ConEd submitted a special stand-by rate to the PSC that could make all generation projects economically unfeasible. We thought they needed more generation????” The Sheraton project has effectively ground to a halt, because by the time the rate hike is decided, the state grant will have expired.

The NRDC’s Gupta attributes the utilities’ interest in such regulations to perverse incentives. “Utilities have a huge incentive to increase sales. If people generate their own electricity, that reduces their revenues and profits,” he contends. “So they go out of their way to make it harder for people to do this, by having standby charges and interconnection rules.” He suggests changing the rate structures for utilities, so the big companies don’t see renewable generation as a threat. “Con Ed’s costs are pretty much fixed,” Gupta notes. “They have the infrastructure, and the wires into everybody’s homes and offices. Their revenue shouldn’t change based on how much they put through their system.”

In the end, however, the biggest barrier to renewables remains the cost for consumers. Traditional hydroelectricity is competitive with fossil fuels, and wind and biomass are getting there, but solar and fuel cells still have a ways to go. “If things make economic or financial sense, you see the private sector investing in them,” explains Ken Stern, a partner at KPMG who specializes in the chemical and energy industries. “Since we don’t see that happening with renewable energy, you have to conclude that the economic sensibility is not there. Frankly, that’s because of low energy prices.” With electricity from conventional sources selling for 12 to 14 cents a kilowatt-hour in the city, it’s hard to justify spending $10,000 a kilowatt up front for solar panels, or $4,000 to $6,000 a kilowatt for a fuel cell.

“I don’t particularly care where my electricity comes from,” says Jerry Taylor, director of natural resources for the libertarian Cato Institute, “as long as it comes from the cheapest available source. And I think most people feel the same way. In fact, when consumers are given the option of specifically signing on for green power, we’ve found that if it’s more than a couple of percentage points more costly than conventional energy, they won’t buy it–despite what the polls say.”

A lot of advocates for green power say that government initiatives like Pataki’s are essential to help level the playing field. “Many technological changes, particularly those that are infrastructural in nature, couldn’t occur without government support,” says Ira Rubenstein, who heads the Environmental Business Association of New York State (and sits on the board of City Limits‘ parent organization). “People forget that the subways in New York City were built as private-initiative systems. They were taken over by government because the private operation could not make them operate. There was much more of a public purpose than simple profit and loss could deal with.”

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So what is the public purpose of renewable energy? In New York City, it’s a question particularly worth asking. Power-plant emissions contribute to levels of air toxins in the city that are 100 to 420 times higher than the Environmental Protection Agency’s “safe” level, according to an NRDC analysis. Another recent study linked air pollution in New York City to low birth weight and small skull size in African-American babies. The consulting firm Abt Associates attributes 1,870 city deaths a year to power-plant emissions.

Then there’s the specter of global warming: New York City, sitting at sea level and surrounded by water, is at certain risk of flooding and erosion. As Chicago has already learned, the heat alone could be devastating. “Climate change has a disproportionate impact on low-income communities and on developing countries,” points out Peggy Shepard, director of West Harlem Environmental Action. “More vulnerable people will be hit–people who have less access to cooler apartments, less access to air conditioning.”

Of course, the city can contribute only so much to the international effort to curb global warming. But when it comes to a more immediate predicament, New York has the capacity to help itself. Each summer, hundreds of thousands of air conditioners run at the same time–not to mention computers, copiers, refrigerators and light bulbs. The grid strains under the load. In the summer of 2001, when electricity demand skyrocketed and state officials feared a blackout, the New York Power Authority set up 10 emergency natural gas–fired plants in New York City, for a total of 440 new megawatts of power.

That’s only a fraction of the 10,587 megawatts the city was using, but it was enough to avert danger. Renewable advocates argue that there’s no reason that solar panels can’t fill the gap during future summers. Richard Perez, a research professor at the University at Albany, has shown that the peak demand in New York City coincides almost perfectly with peak conditions for solar-energy production. “In all the cases I’ve looked at,” he says, “where the grid was either near failure or actually failed, the photovoltaic output was within 90 percent of ideal.”

He estimates that in order to avoid future blackouts, the city would need to get 5 to 10 percent of its total energy from photovoltaic sources, at least 500 megawatts. Even though New York’s current solar capacity is less than 1 megawatt, Perez sees no technical problems in achieving that goal. “If you work out the numbers, you find that there is plenty of solar resource on the New York real estate,” he says. “Using all the available space–low-structure roofs, residential roofs, maybe parking lots in the future–I’d say we could produce 20 to 30 percent of what we consume right now.”

At the current average price of $10 a watt, however, 2,000 megawatts of photovoltaic energy would cost $20 billion to install. On the other hand, 500 megawatts could be attainable within five years, says Gupta, in “an aggressive program.” In fact, the city’s in good shape to try it: According to the National Renewable Energy Laboratory, because of the high cost of conventional electricity, the state incentives available (NYSERDA made $15 million in grants for renewables last year), and the amount of sunshine, New York is one of the five best states in the country in which to invest in solar power.

Fuel cells may have a role to play as well. Yan Kishinevsky, a program manager with the New York Power Authority, says, “When the fuel is free, fuel cell electricity is competitive with grid electricity in New