Why this is worth real money

The exceedance penalty under 1 RCNY § 103-14(h) is the difference between the building's limit and its actual reported emissions, “multiplied by $268.” So every tonne of CO2-equivalent that the coefficient removes from the reported figure is worth $268 a year to a building that is over its limit.

Work it through in the direction that matters. A heat-pump system consuming a million kilowatt-hours a year earns a deduction of 1,300 tonnes at the pre-2027 coefficient, or 650 tonnes at the post-2027 one. The difference is 650 tonnes. For a building over its limit, that is a difference of roughly $174,000 a year in penalty exposure, and the coefficient applies for the rest of the 2024–2029 compliance period.

We are describing how the coefficient operates, not calculating any particular building's position — that depends on the building's limit, its actual consumption, its occupancy groups and its other measures, and it is work for the board's energy consultant. The point is the shape of the incentive: the rule pays a premium for moving early, and the premium expires at the end of this year.

What that means for a board's decision calendar right now

A New York City board that is currently deciding whether to electrify in the 2027 capital plan or the 2028 one is deciding, without necessarily knowing it, whether to take the full credit or half of it. Three consequences follow.

The lead time is the binding constraint, not the budget vote. To have equipment installed and operating before January 1, 2027, a board needs the design done, the filing approved, the equipment procured, the electrical service confirmed with the utility, and commissioning complete — in three and a half months. For most buildings that is not achievable from a standing start, which makes this a question about projects already in flight rather than projects being contemplated. A board with a heat-pump project mid-installation should be asking its team one question: can we be operating before January 1?

Electrical capacity is where these projects die. The rule's own mitigation provisions recognise it: one of the good-faith-effort alternatives under § 103-14(i) is electric-readiness work underway, evidenced by a contractor work request received and/or “load letter approved by the utility,” plus a timeline. A board that cannot finish by January 1 can at least be inside the mitigation framework.

The federal subsidy is already gone. The residential clean energy credit under Internal Revenue Code § 25D ended for expenditures after December 31, 2025, and the alternative fuel vehicle refueling property credit under § 30C ended for property placed in service after June 30, 2026. A board budgeting 2027 electrification work should not assume a federal credit offsets it. Our New York EV charging page covers the charging side of the same question.

Two related provisions that also exist

The decarbonization plan route, and its price. One of the mitigation alternatives in § 103-14(i) was a decarbonization plan certified by a registered design professional, submitted “No later than May 1, 2025” — so that window has closed. But its terms are worth knowing because they show how DOB thinks. It required an energy audit no older than four years, a full equipment inventory, and a list of alterations reaching net zero by 2050 with timeline, capital plan and estimated reductions. It carried two hard constraints, verbatim: “Compliance strategies may not include the removal of a tenant”; and “An owner who files a decarbonization plan in accordance with this clause may not claim emissions deductions associated with the purchase of renewable energy credits (RECs) for the 2024-2029 compliance period.” It also required follow-through: work done within 24 months of submission, and “By May 1, 2028, provide evidence that a complete application has been approved.”

The Affordable Housing Reinvestment Fund. The rule defines it as “a third-party fund established by the Department in collaboration with the New York City Department of Housing Preservation and Development (HPD) to receive, encumber, and distribute funds for qualifying building electrification projects and generate offsets for such activities” — a route to offsets for buildings that cannot electrify directly.

And one source of money that did just go up

On the charging side rather than the heating side, NYSERDA's Charge Ready NY 2.0 programme page states: “As of February 2026, NYSERDA added $15 million to the Charge Ready NY 2.0 program, bringing the total budget to $28 million.” Rebates are $3,000 per Level 2 charging port for multifamily properties, with an additional $1,000 per port in a Disadvantaged Community. Condominiums and co-ops are expressly eligible, subject to a minimum of ten total units on site.²

Two traps in that programme: stations “must remain in operation for at least five years,” which is a commitment that belongs in the reserve study and in the vendor contract; and a board that installs first and applies afterwards has only 90 days from installation to file. Pre-installation applicants get 180 days after approval to install and submit final documentation.

One honest caveat on the figure: NYSERDA's two programme pages disagree, with the “How the Rebate Works” page stating a $12 million commitment and giving no per-port figures. The landing page is more recent and more specific, but a board relying on a number should confirm it with NYSERDA. Our reserve studies page covers how a five-year operating covenant lands in a funding plan.