Remodeled by Steadfast Companies, the Villa Nueva Apartments are a 400 unit Affordable housing development in San Ysidro, California. The 42 buildings consist of 40 residential buildings and 2 community centers. Steadfast recognized the advantages of including renewable energy in the remodel of the development in the early stages of the property renovation. In addition to the solar installations, they outfitted the facility with new paint and updated the amenities such as sewer and windows.
The residential division has been involved in the acquisition and refurbishment of over 20,000 properties throughout the US and Mexico. About 15,000 of those properties are also managed by their in-house property management company, Steadfast Management Co. In addition, Steadfast Companies employed their own construction affiliate, Pacific Coast Land and Construction to complete many of the renovations at the facility.
The facility’s unique design with six main electric meters allows their solar system to offset more than just common loads such as outdoor lighting. The system supplies 70% of the entire facility’s electrical needs. The 687kW solar power installation is one of the largest single-site affordable housing solar projects Borrego Solar has completed to date. The system was completed in six phases. Each of the six sections were connected to the grid one by one on a weekly basis from the first week in May to the last week in June. The array is also outfitted with a data monitoring system that allows Steadfast and Borrego Solar access to real time solar production data.
The San Diego Housing Commission approved its largest-ever loan for the acquisition and renovation for this project. Tax-exempt bond financing was arranged by Centerline Capital Group in conjunction with Freddie Mac as a 4% tax credit deal. Centerline also provided the tax credit equity for the project.
The Villa Nueva Apartments will produce roughly 79,011 kilowatt-hours of electricity per month, enough to power 88 single family homes. In addition to the 4% tax credits (Section 42 LIHTC) the $5 million project made use of investment tax credits for solar energy (Section 48 ITC). Congress, encouraging the private sector to provide a public benefit, allows a participating taxpayer a dollar for dollar reduction of their tax liability for investments in projects that probably would not occur but for the credits. The value of these credits is over $1.5 million. The State of California will pay rebate monies to Steadfast over a 5-year period, amounting to over $1 million. When depreciation is factored in, over 90% of the system is financed by government incentives. Operating expenses are drastically reduced with solar offsetting 70% of the estimated utility bill, or over $145,000 the first year of operation. The yearly savings are expected to increase as the utility rates rise, and over 30 years a savings of over $10 million is expected. Steadfast can expect to have a positive cash flow after 5 years.