The Role of Clean Energy Credits in Local Law 97 Compliance
New York City is on a mission to reduce its carbon footprint and combat climate change. A major part of this effort is Local Law 97, also known as LL97 New York. This law sets strict limits on greenhouse gas emissions from large buildings. To meet these limits, building owners must make energy improvements—or find smart ways to offset their emissions.
One of the most effective strategies for meeting NYC Local Law 97 requirements is through the use of clean energy credits. These credits, such as Renewable Energy Credits (RECs) and green power purchases, can play a vital role in helping buildings stay compliant with the law while transitioning toward a cleaner energy future.
In this article, we will break down what clean energy credits are, how they work, and how they help in Local Law 97 compliance. We’ll also explore how The Cotocon Group, a trusted Local Law 97 Consultant Service, helps building owners navigate these options with confidence.
Understanding Local Law 97 and Its Emission Caps
Local Law 97 is part of New York City’s Climate Mobilization Act, aimed at reducing building emissions—the city’s largest source of greenhouse gases. The law applies to most buildings over 25,000 square feet and requires them to meet specific emissions caps starting in 2024. These limits become even stricter by 2030.
Failing to comply with LL97 New York can lead to steep fines. So, for building owners, it’s not just about doing the right thing for the environment—it’s also about protecting their investment.
What Are Clean Energy Credits?
Clean energy credits are certificates that represent the environmental benefits of generating electricity from renewable sources. There are two main types:
1. Renewable Energy Credits (RECs)
A Renewable Energy Credit (REC) is issued when one megawatt-hour (MWh) of electricity is generated and delivered to the power grid from a renewable energy source, such as wind or solar.
RECs allow building owners to offset their own emissions by financially supporting clean energy—even if the energy is not produced on-site.
There are different types of RECs, but for Local Law 97 compliance, only Tier 4 RECs are currently allowed. These are tied to renewable energy generated in or delivered directly into New York City’s grid.
2. Green Power Purchases
Green power purchases involve buying electricity that is certified as coming from renewable sources. These purchases are often made through utility providers or third-party vendors.
While similar to RECs, green power purchases may not always qualify for LL97 NYC compliance unless they meet specific criteria defined by the New York State Energy Research and Development Authority (NYSERDA).
How Clean Energy Credits Help with Local Law 97 Compliance
NYC Local Law 97 allows building owners to use clean energy credits to offset a portion of their emissions, especially in the early years of compliance. Here's how it works:
Offset Emissions When On-Site Changes Are Difficult
For some buildings, making immediate upgrades like switching to electric heating or installing solar panels isn’t feasible. These upgrades require time, money, and in many cases, structural changes. Clean energy credits offer a short-term solution by allowing owners to purchase offsets while they plan for long-term improvements.
Meet Emission Limits Cost-Effectively
Buying RECs may sometimes be cheaper than overhauling a building’s HVAC system or retrofitting lighting systems. In these cases, RECs can serve as a cost-effective path to compliance, especially during the first compliance period (2024–2029).
Support the Green Energy Market
When you buy a REC, you are not only complying with the law—you’re also supporting the generation of renewable energy. This financial support helps build more clean energy infrastructure, leading to a greener power grid for everyone.
Tier 4 RECs: The Only Credits Allowed Under LL97 NYC
Under current rules, only Tier 4 RECs can be used for Local Law 97 compliance. These credits are part of a state-led effort to bring renewable energy into New York City. For example, large hydroelectric or wind energy projects upstate might feed power directly into the city’s grid, and each megawatt-hour of that power can generate a Tier 4 REC.
This restriction ensures that the clean energy being supported is actually lowering emissions within the city’s boundaries, not just elsewhere in the state or country.
The Cotocon Group stays up to date on all NYSERDA guidance regarding RECs and helps clients choose compliant, high-impact options.
Limitations of Using RECs
While clean energy credits are helpful, they are not a permanent solution to compliance.
Here are a few limitations:
-
Limited to Grid-Based Emissions: RECs can only offset emissions that come from electricity use. Emissions from fuel-burning systems like boilers or gas stoves cannot be offset this way.
-
Not a Long-Term Fix: NYC wants buildings to reduce their real emissions—not just buy credits. Starting in 2030, Local Law 97 places more focus on actual building performance.
-
Price Volatility: The cost of RECs can vary depending on market demand. This can make it harder to plan budgets year to year.
Because of these factors, a well-balanced compliance plan should include both energy efficiency upgrades and strategic use of clean energy credits.
The Cotocon Group: Your Local Law 97 Consultant Service
Understanding and complying with NYC Local Law 97 is not easy. That’s where The Cotocon Group comes in.
As an experienced Local Law 97 Consultant Service, we help building owners and managers:
-
Evaluate building emissions and identify compliance risks
-
Explore clean energy credit options, including Tier 4 RECs
-
Create energy efficiency roadmaps for long-term compliance
-
Optimize costs by balancing upgrades with credit purchases
-
Ensure all credits meet LL97 NYC rules and NYSERDA standards
Our team guides you every step of the way, helping you make smart choices for both compliance and sustainability.
Creating a Compliance Strategy: A Blended Approach
To meet LL97 New York goals and avoid fines, buildings need a custom compliance strategy. Here’s what that might look like:
Step 1: Emissions Assessment
Understand your building’s current emissions using data from benchmarking (required under Local Law 84).
Step 2: Building Audit
Review where emissions are coming from—heating, cooling, lighting, etc.—and assess which systems can be upgraded.
Step 3: Offset Planning
Work with a Local Law 97 Consultant Service like The Cotocon Group to determine how many RECs may be needed to offset excess emissions.
Step 4: Upgrade Implementation
Invest in energy-efficient lighting, HVAC improvements, insulation upgrades, or fuel switching.
Step 5: Monitor and Report
Track emissions year-over-year and adjust the strategy as needed to stay within legal limits.
Clean Energy Credits and the Bigger Picture
Using clean energy credits not only helps with Local Law 97 compliance—it also contributes to New York’s broader climate goals. The city aims to reduce greenhouse gas emissions 80% by 2050. Supporting renewable energy projects is essential to that mission.
By investing in clean power through RECs or green power purchases, building owners become part of the clean energy transition.
Conclusion
Clean energy credits—especially Tier 4 RECs—are a valuable tool for Local Law 97 compliance. They offer a flexible, cost-effective way to offset emissions while preparing for bigger building improvements.
However, RECs alone won’t be enough in the long term. A comprehensive strategy that includes both emission reductions and clean energy support is the best way forward.
The Cotocon Group is here to help you every step of the way. As a leading Local Law 97 Consultant Service, we provide expert guidance on clean energy credits, energy efficiency upgrades, and compliance reporting. Whether you manage one building or an entire portfolio, our sustainability consultants make LL97 compliance easier, smarter, and greener.
Get in touch with The Cotocon Group today to start building your Local Law 97 strategy—and move your property toward a sustainable future.
