energy savings

LED Lighting: Both Art and Science

JulieBy Julie Lundin, Founder,
Director of LEED Process Management for Emerald Skyline Corporation

As a registered commercial interior designer and as a LEED AP (Leadership in Energy and Environmental Design Accredited Professional), I balance the aesthetics of lighting, the “art” and the technical knowledge the “science” when finding solutions for our clients project needs. Lighting is for people, so there must be an understanding of the visual quality users need for health, safety, productivity and enjoyment. Combining the needs of people, with the aesthetics desired and the rapidly changing technical knowledge are key when specifying lighting for any project. In addition, today’s buildings also require the need to consider the economics, sustainability and impact on the environment when making our decisions.

“More and more, so it seems to me, light is the beautifier of the building.”
Frank Lloyd Wright – Architect

Whether you are an individual homeowner or a business involved in commercial spaces you have probably noticed the rapidly evolving lighting product market. The standard incandescent bulbs that Edison invented and we all used for years are no longer available. They are being phased out by the federal government. Next, CFL’s (compact fluorescent lights) became the go to option for customers seeking an inexpensive, energy efficient replacement for the standard incandescent bulb. However, CFL’s have had issues with the quality of light which was perceived as harsh by users, they were slow to warm up and difficult to dim, and contain mercury. CFL’s are now also being phased out. General Electric announced earlier this year that they will stop making and selling these bulbs in the U.S. by the end of 2016. “Now is the right time to transition from CFL to LED,” said John Strainic, chief operating officer of consumer and conventional lighting at GE Lighting. Per Mr. Stranic, retailers are also moving away from CFL’s which will have a harder time qualifying for the Energy Star rating under regulations proposed for next year.

Initially LED’s were expensive but gained customer support because they offer better light quality. As with many emerging technical and consumer products, prices for LED bulbs have dropped steadily as manufacturing has increased and the products have been embraced in the mainstream. Manufacturers and retailers have also used coupons and rebates to further bring down the cost. Even as the prices are dropping the technology of LED’s has improved over the years.

There is no denying the energy efficiency of LED’s but other performance factors should be taken into consideration when deciding which product will work best for the intended use.

LED Glossary and Performance Factors

Efficacy – the rating for lumen output per watt, an easy measurable metric that compares the energy consumption and output of different light sources. Per Eric Lind of Lutron Electronics, the efficacy rating is starting to lose its relevance in favor of overall performance measurements. “If I’m trying to evaluate how much it costs to operate a building, lumens per watt is a good measurement,” says Lind. “The challenge is that buildings are there for a purpose and the color and quality of light have an impact on the people inside”.

Color Rendering Index – CRI is a measurement of a light sources accuracy in rendering different colors when compared to a reference light source with the same correlated color temperature. The closer a light source is to a score of 100, the better its color rendering. The higher the CRI, the better the visual perception of colors. Energy Star requires eligible fixtures to use lamps with a CRI above 80.

Lumens – Lumens are the perceived brightness of a lamp (bulb) and one part of a light sources distinct character.

Color Temperature – The other part of a light sources character, color temperature is a description of the warmth or coolness of a light source. Color temperature is measured on the Kelvin scale and is not the ambient hot/cold temperature of our surroundings. Confusingly the Kelvin scale goes backwards, the higher the color temperature, the cooler the light gets and the lower the color temperature, the warmer the light gets.

An example of color temperature application in a commercial building interior, a warmer (i.e. lower color temperature) light is often used in public areas to promote relaxation, while a cooler (higher color temperature) light is used to enhance concentration in offices. Lighting is one of the most important items that should be addressed in every space. An improperly lighted space can cause accidents, eyestrain, impact the occupant mood, and even how people look.

Color temperature and lumens are the new specifications that people need to know when choosing LED lamps.

Watts – Watts are what we used to measure brightness in the use of incandescent and CFL’s. With LED’s, lumens are the indicator of indicator of brightness.

Controllability – the option of changing light levels and color temperature to suit individual needs and important to user satisfaction.

color temperature kelvin scale

LED Lighting Retrofits – The Low Hanging Fruit

In commercial facilities, lighting efficiency improvement is the simplest energy saving strategy, “the low hanging fruit”. Lights consume from 15 to 40 percent of the annual energy use for most buildings and are usually less expensive to change than other systems. Often there is more than energy savings in most lighting improvement projects:

  • Lower Cooling Costs – Lights generate waste heat, improved lighting efficiency can lower your air conditioning costs.
  • Demand Savings – Reducing the amount of electricity used for lighting may reduce peak demand billing costs.
  • Increased Occupant Productivity – Better lighting may permit faster work patterns with fewer errors and increased productivity.
  • Reduced Absenteeism – Improper lighting can cause glare which results in fatigue, headaches and absenteeism.
  • Increase Safety and Security – Proper light levels reduce the possibility of as well as improve the safety of the employees and vehicle traffic. LED retrofits of parking garages and parking lots are important for employee safety and security.
  • Lower Maintenance Costs – LED light sources have a longer lamp life than incandescent and CFL’s resulting in lower lamp replacements and labor costs.

Lighting is one of the most important items that should be addressed in any building. It has the capability to impact the occupants, the cost of operations and the environment. The Emerald Skyline team can assist you with your LED lighting retrofit project resulting in energy savings, lower cooling costs and most importantly occupant health, safety and productivity. Lighting has the ability to positively transform any space, a true blend of art and science.

 

G.E. to Phase out CFL Bulbs

http://www.nytimes.com/2016/02/02/business/energy-environment/ge-to-phase-out-cfl-light-bulbs.html?_r=0

Long Lasting LED Bulbs Now 90% Cheaper

http://time.com/money/3831356/cheap-led-lightbulb-philips/

Industrial Assessment Center – Energy Web Tool

http://iac.missouri.edu/webtool/TaskDocuments/lighting/lighting.html

Hotel Continues Sustainability Efforts

Boston’s Westin Copley Place upgrades its HVAC system and reaps savings.

By Paul Lin
View the original article here

February 14, 2014

Excluding labor, energy is typically the highest cost that hoteliers face and is the single fastest-growing operating cost in the hospitality industry.[1] According to Flex Your Power and ENERGY STAR statistics, the hospitality industry spends approximately $4 billion per year on energy, with electricity accounting for 60 to 70 percent of the utility costs. And the HVAC system accounts for more than 50 percent of a lodging property’s energy costs.[2] All of which significantly affect the bottom line.

The Environmental Protection Agency has calculated the associated cost savings and concluded that even a 10 percent improvement in energy efficiency is equivalent to increasing average daily room rates by 62 cents and $1.35 for limited-service and full-service hotels, respectively.[3]

Energy Efficiency and Hotels’ Bottom Line

In the hotel sector, reducing energy costs while continuing to meet the diverse needs of guests, owners and corporate requirements is challenging but by no means impossible. Energy efficiency provides hotel owners and operators cost savings that benefit the bottom line. Efficiency also improves the service of capital equipment, enhances guest comfort and demonstrates a commitment to climate stewardship. Environmental friendliness can be a market strength for a hotel brand, which can lead to a better reputation among consumers.

A report by Deloitte, “Risks and Rewards for Building Sustainable Hotels,” cites that both financial incentives and consumer demand are likely to encourage the hospitality industry to continue developing more environmentally friendly hotels, resorts, spas and convention centers. According to the report, “Travelers are increasingly considering sustainability in making travel plans. Business travelers increasingly consider a hotel’s sustainability in making their selections, and 40 percent of those surveyed are willing to pay a premium for it.”[4]

Companies in the lodging industry have realized that environmentally sound practices not only help the environment but can also lead to cost reductions, business expansion and profit growth.

Westin Copley Place

One such company, Starwood Hotels and Resorts Worldwide, is dedicated to integrating enlightened environmental practices and sustainability principles into all aspects of its business strategy. By collaborating with hotel owners, franchisees, suppliers and business partners, the company actively works to reduce the environmental impact of hotel operations. The company recently set a target of reducing its energy consumption by 30 percent and reducing its water consumption by 20 percent by the year 2020. The goals are company-wide and apply to Starwood-owned and managed hotels.

Westin, one brand of Starwood Hotels and Resorts Worldwide, incorporated a number of sustainable elements during a renovation of Westin Copley Place in Boston. This 803-room, 37-story hotel is not only determined to provide guests with a phenomenal stay, but the management also understands its responsibility to the environment. The hotel is a recipient of the prestigious Green Key Award in 2010 and one of four hotels in Massachusetts to be recognized as a Green Seal certified hotel.

Glenn Ralfs, Westin Copley Place’s director of engineering and an industry veteran, is constantly on the lookout for ways to improve energy efficiency. He recently participated in an upgrade to the hotel’s HVAC system by installing energy-efficient motors to the heating and cooling systems in the guestrooms. This entailed replacing existing motors with Regal Genteq Eon 42 ECM motors in all 803 guest rooms as a way to provide improved guestroom temperature resulting in a more satisfying guest experience.

Hydronic fan coils are heating and cooling devices that utilize hot and/or cold water as a thermal source. That water is typically provided by a central system, consisting of a boiler, chiller and other ancillary equipment. Fan coils are extremely quiet and reliable, have low operating costs and remarkably long life cycles. The Westin Copley Place utilizes a two-pipe system which circulates chilled water to provide cooling and an electric strip for heating.

“The benefits of this system are threefold: increased guests’ comfort, energy savings and motor controllability,” says Mike Rosenkranz, Gexpro energy specialist. Gexpro, an electrical distribution company, specializes in energy efficiency solutions which range from lighting, power quality, solar, energy management, drives and motors. Gexpro teamed up with JK Energy Solutions, a provider of energy efficiency services, to engineer a turnkey solution to help the Westin Copley Place achieve its energy efficiency goals.

The designers expect the guestroom energy management system is 80 percent more energy-efficient than the previous HVAC system and plan on saving the property an estimated 400,000 kWh annually. Additionally, due to the high kWh savings, the property expects a return on investment in approximately 2.3 years.

“In a hospitality property, unlike in some other commercial buildings, updated HVAC systems must be achieved with a high priority on quiet operation and good air quality to complete the guest experience,” says Ralfs. “Additionally, as the director of engineering, I need to be knowledgeable of ways to reduce our energy costs and consumption; ECM motors are an excellent way to meet all of these objectives.”

 

  1. www.cpr-energy.com/energy-awareness
  2. Joel Hill, “Boosting HVAC energy efficiency,” Lodging, February 13, 2013.
  3. www.energystar.gov/ia/business/EPA_BUM_Full.pdf (accessed 10/10/13).
  4. The Staying Power of Sustainability, Deloitte Publication, 2008.

10 sustainable innovations: from solar-powered suitcases to floating classrooms

Laura Storm, the guardian, Wednesday 29 October 2014 03.00 EDT

View the original article here

The 2014 Sustainia Awards, chaired by Arnold Schwarzenegger, attracted more than 900 submissions for projects and technologies representing 10 different sectors from food, fashion and, city development to transportation and healthcare. Collectively, these projects are deployed in more than 84 countries.

The runners up for the award are showcased here and the winner will be announced in Copenhagen on Thursday 30 October. The ceremony will celebrate these innovations ahead of the release of the Intergovernmental Panel on Climate Change’s (IPCC) anticipated report on climate change, due to be finalised 31 October.

  1. Food finalist: Netafim (Israel) – gravity-powered irrigation

Netafim offers low-tech irrigation. Photograph: Netafim

Netafim is behind a low-tech irrigation system for smallholder farmers in developing countries which increases and secures yields while saving water and cutting costs. It drips precise quantities of water and nutrients right at the root zone of crops while an elevated tank distributes the water using gravity.

This minimises the need for electricity and investments in infrastructure. The UN estimates that 500 million smallholder farmers provide over 80% of the food consumed in the developing world. Irrigation systems are vital to sustain agriculture as it addresses water scarcity and soil erosion. The solution is commercially viable with a payback-time of about a year, making it fit for microfinance projects.

  1. Transportation finalist: 8D technologies (Canada) – bike sharing app

Spotcycle bike-sharing app. Photograph: 8D Technologies

As a mode of transport, the bicycle is one of the lowest emitter of greenhouse gases – even with the CO2 emissions of the food you need to power a bike. This helps explain why bike-sharing systems are being adopted increasingly by cities. The Spotcycle app from 8D technologies aims to make bike-sharing more convenient and smartphone-friendly. The app locates nearby bike stations and communicates availability, maps out bike paths and helps with navigation. The app is already in sync with cities in North America, Australia and Europe.

  1. Buildings finalist: Advantix (USA) – air-conditioners which use saltwater

Advantix’s saltwater air conditioning system. Photograph: Advantix

Air conditioners use about 5% of all electricity produced in the US. As a result, 100m tons of carbon dioxide are released each year. Advantix’s air conditioning system uses saltwater which means it needs 40% less energy than normal systems. Whereas air-conditioning systems normally chill the air to remove humidity and then reheat it in a highly energy-intensive process, Advantix’s air-conditioners funnel the air through non-toxic fluid saltwater instead. The process dehumidifies the air without the need for re-heating.

  1. Fashion finalist: I:CO (Switzerland) – textile recycling

An I:CI clothing drop-off recepticle. Photograph: I:CO

Clothes are often discarded after the first or second life cycle, and apparel accounts for up to 10% of a western consumer’s environmental impacts. Through an advanced take-back system, I:CO works to keep apparel, footwear and other textiles in a continuous closed-loop cycle. Used shoes and clothing are collected in stores and retail outlets, where customers are financially rewarded for depositing their used items. Once collected, the textiles are sorted according to more than 350 criteria for designation. Used clothes can be labeled suitable for: second-hand sale, recycling into fibres and paddings for new products, or upcycling.

 

 

  1. IT Finalist: Fairphone (Netherlands) – A smart-phone with social values

Fairphone conflict-free phones. Photograph: Fairphone

Through development, design and production, social enterprise Fairphone works to create positive social impact in the consumer electronics supply chain – from responsible mining, decent wages and working conditions to reuse and recycling.

Fairphone began by redesigning the processes behind the production, making phones that use conflict- free minerals and are assembled in a factory with a worker-controlled welfare fund. To date, Fairphone has sold nearly 50,000 phones from its first two production runs.


 

  1. Health finalist: We Care Solar (USA) – solar suitcases giving life

The Solar Suitcase provides lighting for medical professionals. Photograph: Solar suitcase

Preventable causes related to pregnancy and childbirth claim 800 lives daily and 99% of cases happen in developing countries. We Care Solar has created a sustainable solution. The Solar Suitcase provides solar electricity for medical lighting, mobile communication and essential medical devices for rural areas and humanitarian settings. This enables safe and timely obstetric care, which ultimately improves maternal and neonatal outcomes. Additionally, the innovation allows emergency surgeries to be conducted around-the-clock in rural hospitals. The Solar Suitcase has been introduced to more than 600 healthcare facilities in 20 countries.


 

  1. City Finalists: Wecyclers (Nigeria) – Pedal-powered recycling

Wecyclers collectors. Photograph: Wecyclers

In Lagos, Nigeria, Wecyclers is fuelling social and environmental change by enabling people in low-income communities to make money from unmanaged waste piling up in their streets.

It is a response to the local waste crisis; the municipal government collects only 40% of city garbage. The Wecyclers initiative has deployed a fleet of cargo bicycles to pick-up, collect and recycle garbage in low-income neighbourhoods. Families are encouraged to recycle their bottles, cans and plastics through an SMS-based programme. For every kilogram of material recycled, the family receives Wecyclers points on their cell phone. Families can then redeem points for goods such as cell phone minutes, basic food items or household goods. The initiative adds to the local economy by hiring personnel locally.

  1. Resource finalist: Newlight Tech (USA) – carbon-negative plastic

Carbon-negative plastic. Photograph: Newlight

With its novel technology that converts greenhouse gases into plastic material, AirCarbon has disrupted the market by replacing oil-based plastics with a sustainable product that is competitive in both price and performance. It is made from a process where carbon in the air is captured and used in manufacturing. AirCarbon uses pollutants as resources to make products otherwise made from oil. Products made from AirCarbon are carbon-negative even after calculating the emissions from the energy used in production. AirCarbon is currently used to make chairs, bags and cell phone cases.


 

  1. Education finalists: Shidhulai Swanirvar Sangstha (Bangladesh) – school boats combatting climate change

Floating school rooms. Photograph: Shidhulai Swanirvar Sangstha

More than one million Bangladeshis could be displaced by rising sea levels by 2050. One consequence is that children cannot attend school for long periods of time, making it harder for them to escape poverty. By building a fleet of solar-powered school boats, the Bangladeshi initiative Shidhulai Swanirvar Sangstha has secured year-round education in flood-prone regions of Bangladesh. Each floating school boat collects students from different riverside villages, ultimately docking at the last destination where on-board classes begin. Solar lighting makes the schedule flexible, which provides for additional educational programs in the evening. Shidhulai’s floating schools model has been replicated in Nigeria, Cambodia, Philippines, Vietnam and Zambia.

  1. Energy Finalists: Opower (USA) – personal energy-efficient expert

Utilities use Opower to share money-saving insights with custumers. Photograph: Opower

Through use of big data, Opower has given energy utilities a new way of engaging with customers in order to improve energy efficiency. The software solution combines cloud technology, big data and behavioural science to produce data analyses and personalised information on how to save energy. To motivate reductions in energy consumption, utilities use Opower to share money-saving insights with custumers. Opower can also show households their energy usage compared to neighbours; an effective method in motivating people to save energy. Opower has enabled savings of over 4TWh of energy, which is equivalent to $458m (£283.1) in bill savings.

Laura Storm is executive director at Sustainia

A Multi-Pronged Approach to Building Efficiency

December 11, 2013

Part 1: Five Years of Advancing Deep Retrofits

View the original post here

 

Since 2009, RMI’s work to advance deep energy retrofits has focused on a multi-pronged approach to scaling: 1) collaborate with project teammates, owners, and other fast movers who learn from and copypioneering deep retrofit projects, 2) engage entire portfolios and campuses of buildings to impact more than scattered singular building retrofits, and 3) develop new, better, and more comprehensive ways of assessing risk and value associated with deep green buildings, to drive greater investment by financial decision makers.

In today’s part one of a three-part series, we take a look at RMI’s work advancing deep retrofits. (Read parts two and three.)

Five years ago RMI embarked on a body of work to advance what we call deep retrofits, energy-efficiency retrofits that save 50 percent or more of a building’s energy consumption. Half a decade later, it’s time to reflect on how far we’ve come with our Retrofit Initiative … and how far we still have to go.

First, though why a focus on such profound energy efficiency? For starters, we care a lot about eliminating wasted energy, and that’s what most building energy consumption is: waste. But this is about more than simple waste. Done well and timed right, eliminating that waste makes good money. Further—and maybe most importantly—a highly efficient building (whether new or upgraded) is more comfortable, healthier, enables higher productivity, and generally entices people to stay in it longer. Finally, it’s increasingly important for employers and institutions alike to be able to say, and show, that they occupy high-quality, green buildings that perform both financially and environmentally. Real estate markets, especially in certain regions, are waking up to a new and powerful competitive dimension that RMI is helping create!

Our Buildings Practice is working on all these dimensions, mostly in commercial buildings. Five important examples form the core of our retrofit work on individual buildings; work aimed at “Making Old Buildings Better Than New (Ones).” They are:

  • Empire State Building (New York City)
  • City-County Building (Indianapolis)
  • IMF Headquarters 1 (Washington, D.C.)
  • Byron Rogers Federal Building (Denver)
  • The Clark Museum (Williamston, MA)

And while our initial engagement on such projects was funded by the projects themselves, everything that followed, including educating the buildings industry and scaling solutions, comes form donor-funded dollars. Buildings work is often slow to show results. The work only just starts with the conceptual and system-level interventions that RMI has pioneered. Several years often pass before the physical work is done and the “verdict” is in with real measurements showing results. Fortunately for RMI, some of our focus has also been on helping advance the role of sophisticated modeling tools that give a very good sense of what to expect. For some of our fab five examples, the full story is still not in, but the answer is pretty clear. And the change we expect in the world is beginning to happen because of these results.

The Empire State Building

As one of the most famous buildings in the world, the Empire State Building (ESB) is well known, and so is its deep retrofit, one of the first ever in the world on a commercial building. While not yet completed in all tenant space, it is already clear that the retrofit will save more energy than the 41 percent modeled—and command far higher rents.

But the project was notable as well for what followed—RMI’s subsequent work crafting a replicable methodology for deep energy retrofits, sharing lessons learned, building free tools for service providers, and meeting with government officials about the economic benefit of promoting deep energy retrofits. This follow up profoundly moved the market. Over the past two years, ESB design team members alone have begun the process of replicating their own versions of the deep retrofit model in close to 100 large buildings across the country, many in New York. Inside sources say the Empire State Building energy retrofit was a key factor in launching New York City’s groundbreaking Local Law 84: Commercial Building Energy Benchmarking. New York’s benchmarking efforts have spurred eight more municipal and state building energy disclosure policies in major U.S. cities, with more emerging. And RMI helped shape other city and New York state programs aimed at energy savings in buildings.

The City-County Building

Our next project after ESB was a famous—but infamously inefficient—government office building in Indianapolis. Many had tried to fix it. But both money and ideas were limited, and it was still a potential gold mine of energy waste when RMI was invited to help. That was in 2009. One year later, Indianapolis mayor Greg Ballard announced energy-efficiency upgrades for the building expected to reduce energy consumption 35 percent annually. Design-build firm Performance Services executed the retrofit under a performance contract that guaranteed $750,000 in energy savings per year for 15 years, completing the $8 million project at no cost to taxpayers. By 2012, the City-County Building had reduced its annual energy use by 46 percent and earned prestigious ENERGY STAR certification.

 

The Byron Rogers Federal Building

The Byron Rogers Federal Office Building followed on the heels of our City-County Building work. RMI teamed up with a major contractor, Mortenson, in 2010 and presented an aggressive plan to aim for net zero. This mid-century modern office building renovation—largely completed, but not yet fully re-occupied—is a powerful case study for dramatically improving performance of existing buildings through integrative design, regardless of barriers such as misaligned government mandates, historic designation, multiple tenants, hazardous materials, and poor orientation. This project work also formed the foundation of donor-funded focused studies and educational material on managing plug loads.

Building upon the Byron Rogers project, RMI worked further with the U.S. General Services Administration (GSA) to better understand tenant issues. Working on another important accelerator—the service industry that executes the work—RMI teamed again with the GSA to prove that energy service companies (ESCOs) can be primary drivers and implementers for achieving deeper energy savings in buildings. Funded partly by donors, this effort intervened with sixteen of the largest ESCOs in the U.S. with a goal to introduce them to strategies for deep energy retrofits and to identify and overcome barriers to achieving the deepest efficiencies. Over the course of our partnership with GSA, average projected energy savings from the deep program’s ESCO engagements at GSA has already more than doubled to 39 percent from 18 percent. This marks a significant positive change in the “MUSH” institutional and government market that seldom achieved more than shallow savings and has in recent years been using ESCOs largely for lighting and equipment finance only—a case of leaving barrels of money on the table!

IMF Headquarters 1

At the same time as Byron Rogers, RMI had an opportunity to reshape how things are done in the nation’s capital, a sea of opportunity in the form of large, inefficient office buildings crowding the streets around the government buildings on the Mall. The client was the International Monetary Fund. Once again, RMI played a different role, not as a bidder for a project, but as part of a team to shape the brief for those bidders—to tell them what to do, in other words. After extensive option and life-cycle cost analysis the pre-bid team came up with a doozie: a winning project would need to cut energy use in half and meet other explicit financial and performance targets. Here is how the proud client talks about it: “The improvement under way will provide a more modern and energy-efficient setting. Energy bills will fall by nearly half—saving between $2 million and $2.5 million per year…”

The project is under construction now, to be completed in 2016. Importantly, the execution team, led by architect Skidmore, Owings & Merrill and engineer WSP Flack and Kurtz, will drive the insights and processes into the Washington real estate world and beyond.

The Clark Museum

One final test project was a real challenge: the Clark Museum on the campus of Williams College in Massachusetts. The opposite of the IMF project, where RMI helped shape what bidders would be asked to do, at Clark RMI was brought in after a design for a significant addition and retrofit was already almost complete. Way too late, we thought. But we wanted to test what was possible in this “worst case” situation where the key was a motivated owner (supported by a significant donor).

The problem in a building such as a museum—as in a laboratory as well—is achieving energy savings while maintaining a strictly controlled internal environment that protects art and artifacts in a curatorial environment. RMI identified and recommended opportunities to double HVAC energy savings compared to the design team’s energy model. Needless to say, the Clark (and RMI) donor backing the work was very happy … and recently sent a note saying so. The results are in, and the energy savings are rolling in as expected.

Scaling Our Impact

These exemplary projects are commendable, but the real goal is to spread their lessons and ideas far and wide. That’s why we created the RetroFit Depot as an extensive and compelling Web-based resource for building owners and professionals considering energy retrofits, including our acclaimed Deep RetroFit Guidelines. One consulting firm in Chicago says they used our guidelines as a foundation for twenty deep retrofit roadmaps within the Retrofit Chicago – Commercial Buildings Initiative. Our Buildings Practice staff members have presented over 100 educational sessions on how to plan for and conduct deep energy retrofits to a total combined audience in the tens of thousands in the past four years.

RMI also worked closely with the American Institute of Architects to develop Deep Energy Retrofits: An Emerging Opportunity, a guide for architects. The guide was launched during AIA’s annual conference in June in conjunction with a well-attended all-day seminar on deep energy retrofits. This industry intervention was donor-funded. RMI also teamed with the National Renewable Energy Laboratory to help produce a set of retrofit guides for different buildings categories (office, retail, healthcare, etc). Finally, RMI has shaped an educational agenda, one where we play specific roles to help all others understand the learning available, and the major holes still left to fill. Based on this agenda we have conducted half a dozen deep training sessions, focusing largely on a specific leverage point: engineering firms and ESCOs.

We’ve also testified to the U.S. House Subcommittee on Investigations and Oversight on the impact and importance of fossil-fuel reduction targets and green building rating systems, and written almost 100 blog posts and web articles on energy-efficient buildings and campuses. Deep retrofits are one area of innovation and promise in driving greater building efficiency in order to enable a fantastic, sometimes better-than-new building, and even more importantly, foster a vibrant clean energy economy. We cannot lay the path nor spread that message without donor funding. If you believe that efficiency and clean energy must be priorities globally, and that organizations like Rocky Mountain Institute are critical catalysts, please consider supporting our work or joining our team.


 

Part 2: RMI Scales Deep Retrofits Through Portfolios and Campuses

 

Since 2009, RMI’s work to advance deep energy retrofits has focused on a multi-pronged approach to scaling: 1) collaborate with project teammates, owners, and other fast movers who learn from and copy pioneering deep retrofit projects, 2) engage entire portfolios and campuses of buildings to impact more than scattered singular building retrofits, and 3) develop new, better, and more comprehensive ways of assessing risk and value associated with deep green buildings, to drive greater investment by financial decision makers.

Engaging portfolios and campuses and better assessing risk and value are both new and challenging topics, and our donor-funded work to advance them is by no means complete. But we believe we must aggressively accelerate the nature and quality of retrofits of all sorts in most commercial buildings—and it is imperative that we do so in order to rapidly drive down energy use and CO2 impact.

In today’s part two of a three-part series, we take a look at RMI’s work on portfolios and campuses. (Read parts one and three.)
Portfolios and Campuses

Deep energy retrofits are not for every building, and cannot be efficiently or economically done at random. Our portfolio and campus work—a significant thrust for four years now—has been revealing insights into this area and helping major players shape plans, standards, and processes. We have continually moved the bar higher on expectations for energy savings in a well-run portfolio or campus of buildings, especially when taken as a whole. Universities and corporate campuses are now leading the way toward zero carbon emissions—in fact, they can be re-envisioned as renewably powered microgrids.

Car Dealerships

Shortly after we wrapped up our work on the iconic Empire State Building, we began another influential—if less sexy—project focused on car dealerships. These are small buildings, not very valuable or appealing, metaphorical islands in seas of parked cars under powerful lights.

Working with Ford Motor Company and a big energy services company (ESCO), we selected three dealership facilities and executed our standard deep energy retrofit diagnosis and whole-system design effort. The resulting build-outs saved 60–80 percent of the energy with good economics. Despite three different geographies, RMI identified a common package of energy-saving measures focused on indoor and outdoor lighting, mechanical controls, commissioning, weatherization (plugging leaks), and when-it-fails HVAC equipment upgrades. This package saved the vast majority of the energy and could be scaled up—a lot.

There are currently more than 17,500 new-car dealers with total energy use exceeding 50 trillion BTU/year. Only a handful have been upgraded for energy efficiency. Many ESCOs and several financing players have discussed this opportunity with us, and some players have recently begun their own rollout of dealership retrofits complete with financing options, all taking advantage of relatively short paybacks available because of the heavy role lighting plays in the car sales business. The ball is rolling, though it could use a big push.

Malls, Retailers, and Supermarkets

Car dealerships represented a huge portfolio of reasonably similar buildings, but they comprised a portfolio with many (many!) owners. What about other large portfolios, but with fewer owners?

We realized that retailers and the mall owners that housed them presented another opportunity. The largest players in this arena had thousand of buildings, huge energy demands, and well-structured processes for setting standards and driving change. And, we had already worked with two big names: SuperValu, a northeastern supermarket chain, and WalMart, back when it was first beginning to consider what a more energy-efficient store might look like.

We quickly found and executed two more projects with large supermarket chains, Kroger and HEB, where tiny margins make energy savings a very, very big deal. In both cases we helped develop designs—now built and running well—for new test bed stores. These not only formed the new standard for all new stores, but, on a component basis, serve to pre-qualify equipment for retrofits or upgrades. Energy upgrades are one of the most profitable investments available to both store chains, and an RMI speech on the topic at the Food Marketing Institute in 2011 confirmed that these examples and their value are now well understood by the supermarket industry. Finding capital for projects remains a challenge, however.

A Focus on the Owner-Occupant

We then reached out to other retailers and major office building owner-occupants to look into more diverse (and less energy intensive) buildings portfolios. After discussions with many, The Exchange, which runs department stores, quick-service restaurants, and convenience stores on military bases, answered our call. So did Kaiser Permanente, one of the country’s largest and best-regarded health care organizations with a fleet of hundreds of office buildings and dozens of hospitals. As did telecommunications giant AT&T, which boasts a huge portfolio of more than 60,000 structures, courtesy of its Bell System heritage.

In all cases, our scope was research, planning, and limited testing focused on a central question: How to save the most energy from a large set of buildings, over time, with the most compelling economics?

RMI found that AT&T had huge opportunities requiring multiple strategies integrated carefully with workplace upgrades and equipment replacement cycles. Given corporate capital allocation requirements, it was also vital to bundle many projects together to leverage external, efficiency-focused capital to speed impact. At Kaiser, it became clear that efficiency provided a fantastic path toward meeting the company’s goals of a 30 percent absolute reduction in its carbon and energy footprints, but new governance, funding, and other mechanisms had to be created to capture it. Work at The Exchange, still underway, has revealed deep and broad savings opportunities, but economics, even in very similar buildings, vary widely. Project returns are best when linked with equipment upgrade cycles; much poorer when they are not.

These findings are among many that are universally applicable in larger owner-occupied portfolios, including almost all the large retailers like Target, Best Buy, Macy’s, and WalMart, as well as mall owners like Simon Property Group, with which we have built relationships over the last few years. These insights, and other practical advice, are integrated into RMI’s tools sets and frameworks on RetroFit Depot. It is clear that the impact potential in these large portfolios is huge but challenging to plan and capture.

Working with the Nation’s Largest Landlord

In 2010, RMI partnered with the largest and most influential office owner of them all: the U.S. General Services Administration (GSA). Long a real estate leader—and well recognized as such within the industry—the GSA’s 80-million-square-foot portfolio must become net zero by 2030 and three percent more efficient every year, according to Executive Order 13514.

The GSA does not have the capital to do this, however. So RMI has teamed with GSA leadership to define how performance contracting can be optimized, in order to drive broader and deeper retrofits. Rallied by a Deep RetroFit Challenge Summit in Boulder, Colorado, in 2011, energy service companies (ESCOs) have already roughly doubled the amount of savings (39 percent vs. 18 percent) they expect to deliver to GSA, though projects are not yet completed. We expect continued GSA leadership in expanding the potential of ESCOs.

State governments are another institution with significant building portfolios. In a still-evolving effort, we have advised government staff that are shaping, or practitioners serving, no fewer than six states planning or executing energy saving programs in state buildings. For instance, we contributed ideas and experiences to planners designing Governor Cuomo’s New York State program to improve energy efficiency in state buildings 20 percent by 2020. Meanwhile, the contractor supporting Missouri’s highly effective two percent (additional) savings per year program approached RMI to consider how to learn from and expand the Missouri program to other states.

After the 2011 release of Reinventing Fire, our book highlighting the longer-term fossil-fuel-free potential of the U.S. economy, it became clear that “what to do Monday” was a key question, so we executed the first (we hope) of a number of smaller “Reinventing Fires.” This first one was with the state of Connecticut. Connecticut’s leading state building efficiency program became a key part of the resulting 2013 comprehensive energy strategy focusing on efficiency, natural gas, and renewables.

University Campuses

RMI has a long history of studying universities as many are perfect test beds, and properly led, are capable of moving quickly. They have high diversity of buildings, but half or more of the energy use is often centered in three key areas: labs and hospitals, dining facilities, and data centers. All three are areas where RMI has done design work for new facilities, thus providing insights relevant to retrofits.

Some of our early work with campuses set the scene. Our Accelerating Campus Climate Initiative study and book with the Association for the Advancement of Sustainability in Higher Education (AASHE) dug into the challenges and opportunities of setting aggressive climate strategies, and gave us significant insight into the complexities of university campus decision making.

At Penn State, we learned of the vast gulf often present between facilities, research, and teaching in larger universities. At the University of British Columbia, we discovered potential solutions to bridging those gulfs, using very clear and active governance mechanisms. With Appalachian State and the University of North Carolina system, we have learned about the huge differences in campuses within large public university systems, and the benefits from shared learning like the annual UNC Energy Summits we co-host. At the University of Southern California we have learned that with patience, the sources of value and drivers of change can be found even for universities where sustainability and climate are not shaping important agendas. And our long-time links to our local university, the University of Colorado at Boulder, helped us realize that there was a timing opportunity. Many of the key academic buildings in this country were built during a boom time—part of the reaction to Sputnik—in the 1960s and 70s, and now constitute one of the “ripest” sets of buildings for retrofit anywhere.

These all have led to our current, capstone university project: a partnership with Arizona State University and Ameresco to develop an explicit roadmap to deliver a net-zero carbon university by 2025, one of the most aggressive climate commitments from any major university. Initial details of the program were released in October, but results will not be made public until summer 2014 when ASU, Ameresco, and RMI finalize the university’s climate neutrality implementation plan.

RMI has very high hopes and has made initial plans on how to rapidly spread insights from ASU and other leading universities because of a simple fact: universities are not only great test beds; they also shape and execute research. And the research opportunities in the areas of efficiency and renewables are tremendous, as we have found when serving as reviewers for government research grants and as judges for commercial real estate management company CBRE’s recent million-dollar research grant program. Finally, and perhaps most importantly, universities shape the knowledge, attitudes, and careers of their boards, alumni, leaders, students, and staff. They in turn shape the cities and regions in which they live and work. Universities are one of the most powerful leverage points we have in driving energy transformation, and we are launching programs to do just that.


 

Part 3: RMI Scales Deep Retrofits Through Deep Retrofit Value

 

Since 2009, RMI’s work to advance deep energy retrofits has focused on a multi-pronged approach to scaling: 1) collaborate with project teammates, owners, and other fast movers who learn from and copy pioneering deep retrofit projects, 2) engage entire portfolios and campuses of buildings to impact more than scattered singular building retrofits, and 3) develop new, better, and more comprehensive ways of assessing risk and value associated with deep green buildings, to drive greater investment by financial decision makers.

Engaging portfolios and campuses and better assessing risk and value are both new and challenging topics, and our donor-funded work to advance them is by no means complete. But we believe we must aggressively accelerate the nature and quality of retrofits of all sorts in most commercial buildings—and it is imperative that we do so in order to rapidly drive down energy use and CO2 impact.

In today’s part three of a three-part series, we take a look at RMI’s work on risk, value, and decision making. (Read parts one and two.)

Risk, Value, and Decision Making

In our earliest work on the Empire State Building and car dealerships, much of the key analysis and decision-making about whether and how to execute was financial. In those efforts, we used relatively simple life-cycle costing models, and since few good ones were available, we built better ones and made them available for all on our website.

But we also realized that life-cycle costing was the tip of the iceberg. If the goal was to dramatically improve the economics of retrofitting existing buildings and driving far more capital into the attractive opportunities that resulted, we had to do a lot more. Reviewing all the levers for improving retrofit economics, it became clear that RMI could add the most significant value in reducing the risk and cost of executing the complex design and build process of a retrofit. With that we set to work.

 

The Role of Building Energy Modeling

The first step was to develop and host the first-ever workshop for all the leaders of the U.S. building energy modeling (BEM) community. Called the BEM Innovation Summit, this two-day workshop sought ways to capitalize on the biggest opportunities for building energy modeling to support widespread solutions for achieving low-energy buildings. RMI has been involved in advancing how energy modelers can help improve confidence in efficiency investments. Most recently, RMI teamed with two research facilities to demonstrate methods for quantifying uncertainties, and thus risks, of modeled performance estimates.

RMI is also addressing owners’ needs to understand risk, which allows them to manage it. For instance, through DOE-funded work, RMI authored Building Energy Modeling for Owners and Managers, a guide to specifying and securing services. Equally important, these efforts have made RMI a go-to source for key thinking about risk reduction and access to less-expensive capital. In the end, our work on finance is about risk reduction and value increase to enable far more money to flow into making buildings better and more efficient; to “making older buildings even better than new ones.”

With 80 billion square feet of existing commercial buildings, and an ongoing new-build market equaling the best one to two percent of that, this is essential and must happen on a massive scale. We are determined to overcome the nontechnical barriers with the same drive as the technical ones.

Overcoming Split Incentives

Encouraged by a donor who had his own real estate portfolio, RMI teamed up with the influential Building Owners and Managers Association International (BOMA) to develop a practical new report, Working Together for Sustainability: The RMI-BOMA Guide for Landlords and Tenants. The report detailed the conclusions of a workshop on how to overcome the classic split incentive issue, which inhibits owners from making efficiency improvements that a tenant benefits from but will not pay for, and vice versa. Owners, landlords, tenants, and brokers all contributed and detailed ways to work together to overcome this hurdle. The free report has been aggressively and broadly distributed by BOMA and other channels (BOMA is a 100-year-old organization with 114 active branches in the U.S. and Canada) and RMI continues to work with BOMA to get new messages and ideas out today.

Small But Important: Retrofits in Smaller Commercial Buildings

Encouraged by BOMA, and cohosted with the Northwest Energy Efficiency Alliance (NEEA), RMI in 2011 also took a first look into the challenges of planning and financing retrofits in smaller commercial buildings, those under 50,000 square feet. This represents the vast majority (90 percent) of all commercial buildings and more than 50 percent of the space in the country. These buildings are considered too small to study extensively, with owners or managers too busy to navigate the complexity of any but the most urgent retrofit projects, much less the challenges of utility rebate and government tax credit paperwork.

The workshop found that 75 percent of these buildings are zombies whose owners cannot afford or have no interest in investing in their upkeep, even though rents, comfort, and longevity would all go up if they did. This is a massive opportunity for cities and local utilities to encourage, and local entrepreneurs to serve, ideally with turnkey solutions. The results have been leveraged in RMI’s community and electricity work and Reinventing Fire projects ever since.

Identifying Comprehensive Deep Retrofit Value

The small buildings Retrofit finance work also provided the final stimulus to look not just at risk and its links to financing, but more broadly at value. Good, deep green buildings such as those resulting from a deep retrofit are more comfortable, productive, marketable, attractive to recruits, supportive of corporate sustainability-linked brands, and many other great things. Many such values are hard to quantify. But since the real estate industry has very well established techniques for handling other hard to quantify but still vital factors—such as location, or marble lobbies, or fast elevators—why not get these value drivers into the decisions? Everyone would be better served if we did: owners, brokers, tenants, and the planet.

Scott Muldavin, who literally wrote the book on this topic, joined RMI in 2011 to help us and now serves as an advisor and collaborator. Our RetroFit Value Model, in a first version aimed at owner-occupants (half of the market), is due out in January 2014. Thoroughly reviewed and very well received by those in the field of sustainability and real estate finance, it lays out the logic, research, insight, and clear methodologies for capturing all the value components of a highly efficient building, to enable better and wiser deals to be made. RMI is of course using the framework in its own real estate planning. And we plan to share the work broadly with the help of friends like Urban Land Institute, BOMA, CoreNet Global, and many others. We also hope to find support to expand this approach to investors and brokers and specialty markets like universities and the GSA, where the tools will need some adjustment.

We are by no means done with the process of driving more capital, more portfolio strategy, and more aggressive campus goals and progress into the U.S. energy system. The stakes are huge and the timing is critical. Without strong savings in buildings, U.S. electricity and gas use will continue to grow, and new, long-lasting but regrettable investments in fossil-fueled electricity and natural gas distribution systems will be made. Those would be investments we do not need, because less money can bring permanent savings via efficiency, with no inflation or risk. Such fossil-fuel investments would likewise be ones the planet cannot afford, because the unnecessary electric plant WOULD of course be used, to the detriment of all who could have been richer, more comfortable, and more productive without it.

Right-Size Your Ventilation Needs

Learn how demand control ventilation can reduce energy use

By Jennie Morton
View the original article here

Can ventilation requirements and energy conservation go hand in hand? They can if you implement demand control ventilation (DCV).

There’s no reason to waste energy conditioning air for people who aren’t in your building. Instead of supplying air at fixed rates, DCV automatically adjusts ventilation levels based on real-time occupancy measurements. This strategy allows you to meet code and reduce energy use without sacrificing indoor air quality.

EXHAUST YOUR OPTIONS
The problem with traditional ventilation is that it cannot distinguish between actual vs. projected occupancy. As outlined in ASHRAE 62.1-2013, Ventilation for Acceptable Indoor Air Quality, ventilation rates are calculated using two factors: square footage and peak occupancy.

Since square footage is a constant, any fluctuations on the occupancy side of the equation give rise to energy waste. With travel, sick days, vacation, and inclement weather, your building is rarely at capacity. In fact, human resources data shows an average of 75% of workers will be in attendance at any given time.

Without a way to calculate the actual headcount, your HVAC system operates as if maximum occupancy occurs on a continuous basis. If you can eliminate the excess air supply whenever fewer people are present, however, you have an opportunity to capture energy savings.

To have a responsive, intelligent HVAC system, you need to implement demand control ventilation. This strategy recognizes when a space has fewer people than scheduled and drops ventilation levels accordingly, explains Daniel Nall, senior vice president with Thornton Tomasetti, an engineering firm. Air supply is calculated using verified headcounts rather than occupancy projections. DCV is no different than using occupancy sensors to control lights – both ensure energy is conserved when there’s no activity in a space that justifies its use.

For example, offices need to supply 5 cubic feet per minute (cfm) per person in addition to a baseline of 0.06 cfm per square foot, Nall explains. Unoccupied, a 250-square-foot office needs 15 cfm to meet the ASHRAE standard. With one individual present, this increases to 20 cfm. Using DCV to sense when the room is empty, you can scale back the ventilation from 20 to 15 cfm, a 25% decrease in air supply. These savings are then multiplied across any room that has DCV capability.

If your occupancy variations are known in advance, DCV may be as simple as using a basic schedule in a building management system, says Jules C. Nohra, manager for energy efficiency at SourceOne, an energy consulting and management firm. Those with irregular or unforeseen occupancy fluctuations, however, will require sensors that can determine how many people are present. These include education, retail, conference areas, performance venues, lobbies, and offices with a mobile workforce or flex hours.

Carbon dioxide monitoring is by far the most common way to determine occupancy, says Thomas Lawrence, senior public service associate with the College of Engineering at the University of Georgia. The technology is well-established and straightforward to implement. CO2 isn’t treated as a contaminant that needs to have its levels controlled (a common misconception), but as a representation for the number of bodies in a space.

“Carbon dioxide measurements act as a surrogate for occupancy because humans generate an average volume per hour,” explains Nall. “By calculating the concentration differential between internal CO2 volumes and the outside air, you can estimate the number of people in your building. For example, if your CO2 concentration doubles, then occupancy has doubled.”

Occupancy sensors, such as the infrared ones you pair with lighting controls, can also be used. These are the most effective in individual work spaces and private offices, Lawrence observes. For a zone with multiple workers, however, they don’t offer fine enough measurements to calculate total attendance.

For example, think of an open floor plan that houses 30 people. The occupancy sensor will trip when the first person arrives, but it can’t scan the room an hour later to see if all 30 workers showed up that day. It also can’t detect if 15 of those employees move to another part of the building for a two-hour meeting, leaving the space over-ventilated during that period.

Entertainment venues may be able to use ticket sales to confirm a headcount. Other facilities can derive occupancy by counting cell phone signals present in the facility, Lawrence says. It’s also possible to have IT report the number of active computers, assuming that each device fired up represents a person in the space. If you use an access control system and it can interface with your BAS, each card swipe, keypad entry, or turnstile rotation can count toward occupancy.

INSTALL WITH AN AIR OF CONFIDENCE
Integrating demand control ventilation is heavily influenced by your existing HVAC system, such as whether your ventilation is combined with heating and cooling or is a standalone function.

“For example, adding DCV to a packaged rooftop unit may be as simple as including the CO2 sensor with a controller that has the DCV control logic built into it. Such a system likely serves only one or a few occupied zones, making it simpler to control CO2 levels,” explains Lawrence. “A larger building with central air handling, however, may serve many occupied zones. Determining the proper amount of outdoor air to bring in at the central air handling unit is also complicated by the variable occupancy patterns within the multiple zones.”

Say your VAV system supplies air to a large conference area and a group of private offices. To scale back the ventilation when the conference room is empty means that you risk the possibility of underventilating the offices at the same time. To avoid this scenario, you will need air flow sensors that measure the amount of air going to each space as well as the outside air that’s being drawn through the air handling unit, says Nall.

CO2 sensors are typically installed in the occupied space instead of ductwork because return air is an average of all conditioned spaces rather than an individual area, state ASHRAE members Mike Schell and Dan Inthout in their article Demand Control Ventilation Using CO2. Duct sensors can be used if all ventilated spaces share common occupancy patterns; otherwise, sensors should be wall-mounted.

“Avoid installing in areas near doors, air intakes or exhausts, or open windows,” advise Schell and Inthout. “Because people breathing on the sensor can affect the reading, find a location where it is unlikely that people will be standing in close proximity (2 feet) to the sensor. One sensor should be placed in each zone where occupancy is expected to vary. Sensors can be designed to operate with VAV-based zones or to control larger areas up to 5,000 square feet.”

Switching to DCV will typically require additional building management system points, new setpoints, and new control codes for dampers, Nohra notes. This may include a controller or DDC programming to communicate either directly with the economizer controller or a central control system, specifies the DOE in its 2012 report on demand control ventilation.
You should also make sure outdoor dampers are operable and not stuck in fixed positions, stresses Lawrence. It’s not unusual to find air intakes blocked in a misguided attempt to save energy. There may also be missing equipment, such as economizer controls with modulating air dampers that were specified but never installed.

Once the DCV sequencing has been established, the system requires minimal maintenance. CO2 sensors should be recalibrated periodically as their accuracy will drift over time. Consult your manufacturer guidelines, which may recommend recalibration every five years, annually, or every six months. Lawrence also recommends sensor testing prior to launch in case the product is deficient or was damaged during installation.

A BREEZY SOLUTION
Demand control ventilation isn’t a flashy energy efficiency project, but it consistently generates payback under five years or less. Paybacks can also be achieved more quickly if the system incorporates lighting and electrical outlets (vampire energy) controls. For upfront investments, owners can expect to pay less than $100 for occupancy sensors, Nall estimates. CO2 sensors can cost several hundred dollars per unit, adds Lawrence.

“The installation costs for a DCV project vary significantly depending on building size, existing infrastructure, and control requirements. An owner can expect to pay approximately $1,000 to $2,000 per point on average,” Nohra adds.
Nall was recently involved with a renovation project that incorporated DCV by using occupancy sensors. A series of perimeter offices and those adjacent to an atrium were paired with a dedicated outside air system and variable speed fan coils.

Each 160-square-foot office has a two-position damper. The default setting for an unoccupied office delivers 10 cfm of outside air. Anticipating occupant diversity when the office is in use, the secondary position is configured for three guests at 25 cfm.

“This ensures that we’re providing the minimum ventilation for the maximum expected occupancy,” Nall stresses.
Whenever the system senses the room is unoccupied, it can scale back ventilation to 40% of peak flow. The project cost less than $1,000 per office and since the occupancy sensor controls ambient lighting and power receptacles, the payback is under five years. The DCV capability also meets the LEED credit for increasing ventilation by 30%.

Lawrence also oversaw a DCV project at the University of Georgia. The retrofit converted a single classroom, but has seen great success since its installation. Payback was achieved in less than two years and there are plans to adapt more areas in the future.

“Regardless of the actual design standard, energy savings with a DCV retrofit should focus on a comparison to the existing ventilation patterns, even if they do not match current codes or standards,” emphasizes Lawrence. “If a building is not providing ventilation that meets existing standards, then the primary benefits of DCV are indoor air quality.”

Jennie Morton jennie.morton@buildings.com is senior editor of BUILDINGS.

Change Your Perception of Financing and Reap the Energy Savings

An overview of funding options for your next project
By Eric Woodroof, Ph.D., CEM, CRM
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Psychologically, when most people hear the word “financing,” they have a quick and negative reaction about cost. I understand the perception. If you look at the total financing cost on your home, you pay an amount over 30 years that can be twice the purchase price!

But most energy projects are different from your home mortgage. The savings is greater than the finance cost (especially with today’s low interest rates). Yet lack of capital and financing cost are the most common reasons why good energy projects are delayed or cancelled.

An energy project can have a rate of return over 30% – higher than most investment opportunities and many companies’ profit margins. Even with a 10% financing cost, you are still 20% ahead compared to doing nothing.

Lack of capital is solvable for many projects. I will outline solutions, some old and some new. I hope this article inspires you to challenge anyone who tries to block a good project based on the premise that money is not available and the financing cost too high. The truth is, you are probably throwing bags of money out the window – and that money cannot be recovered, even if you do a conservation project at a later date.

Innovative Options

Among recent financing innovations are Utility Energy Service Contracts (UESC), Power Purchase Agreements, on-bill financing, and Property Assessed Clean Energy (PACE) financing.

Utility Energy Service Contracts are basically performance contracts that are developed and implemented by utilities. The contracts offer some streamlining because utilities can provide the project funds and make deals with neutral cash flow.
Power Purchase Agreements (PPAs) are commonly used for solar PV and wind generation. In a PPA, solar is put on the roof at no upfront cost to the building owner, who agrees to purchase the kWh produced over a long-term contract. The PPA is typically structured so that the building owner is paying about the same price for the solar kWhs as they would for power from the grid. This works well when the grid price is high, the utility is cooperative, and local incentives are available.

On-bill financing is offered by some progressive utilities, typically as part of a Demand Side Management Strategy that benefits the utility. As the name implies, building owners repay the installation costs with an extra charge on their future utility bills. The deal is structured so that the monthly savings is larger than the extra charge. The improvement can be linked to the meter, so that if the owner sells the building, the savings and the repayment are taken over by the new owner.

PACE is very similar to the on-bill financing concept except that the savings and repayment are linked to the property tax, so that if an owner sells a property, the new owner would assume the property tax amendment (i.e. extra payment). However, any new owner also reaps the savings cash flow. In recent years, PACE has become very popular. This financing vehicle has now been enabled by legislation in 31 states.

Traditional Financing

There are also many traditional financing options available to facility managers. If you decide to finance a project with a loan, bond, true lease, capital lease, or other leasing variation, you may have some new vocabulary to learn. You may also need an accountant to evaluate such things as depreciation. (And note that there are some new tax regulations for depreciation in 2014.) Take a little time to understand this information as well as the view from the CFO (or whoever signs the contract). To get approved, the CFO has to say “yes.” Try to make it easy – or even irresistible – for him.

Performance contracting has been around for decades and allows projects to be developed by an Energy Service Company (ESCO) that offers a performance guarantee on the savings in which the savings are greater than the finance payment, which is usually handled by a third-party financier. This approach can be attractive because, in theory, the savings are risk free due to the guarantee.

Performance contracting is more common with government, institutional, and educational facilities because financiers are more comfortable lending money to organizations that are likely to survive a recession and other difficult business cycles. Contracts can become complex (for both the ESCO and the facility) and it takes time to understand them as well as get legal endorsement, which adds time and cost.

Local incentives and rebates from utilities can be substantial and improve the return on investment if you are willing to do some before/after documentation. For example, my utility will give a $10 rebate on LED lamps that cost $20. A list of free rebates, tax credits, and other incentives is available at www.dsireusa.org. Also ask your local government, chamber of commerce, and economic development office because they may have special grant money. Because the local community benefits, I have seen funding available to help pay for solar, energy efficiency, and water conservation projects.

Additional Resources

It is clear that energy financing options have increased, leaving more choices for the facility manager – a great situation if you know where to look and how to leverage your options.

If you want some basic information about financing and performance contracting, I have a free webinar entitled Financing for Engineers that is available here. There is also information on the energy.gov and EPA websites.
For career-focused individuals that want to earn accreditation, you can look at a new certification program from the Association of Energy Engineers, the Certified Performance Contracting & Project Funding Professional. I think this type of training will help many facility managers and ESCO professionals navigate their options and accelerate project approvals.

Eric A. Woodroof, Ph.D., is the Chairman of the Board for the Certified Carbon Reduction Manager (CRM) program and he has been a board member of the Certified Energy Manager (CEM) Program since 1999. His clients include government agencies, airports, utilities, cities, universities and foreign governments. Private clients include IBM, Pepsi, GM, Verizon, Hertz, Visteon, JP Morgan-Chase, and Lockheed Martin.

600 Brickell office tower is now downtown Miami’s green giant

Paul Brinkmann, South Florida Business Journal, 1/23/2014
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If you work at the new 600 Brickell office tower in downtown Miami, you don’t have to take a car or walk a block to grab lunch. One of the building’s features is a large golf cart that shuttles people to popular lunch spots.
The idea is part of the building’s green image because it stops people from firing up their gas-guzzlers just to make a short trip. But it’s also a nice amenity.

It’s a benefit offered by the new king of green among Miami’s environmentally friendly office buildings. The first LEED Platinum-certified office tower in Florida is so far living up to its ranking, the U.S. Green Building Council’s highest rating of a building’s sustainability.

Loretta Cockrum, chairwoman and CEO of Foram Group, developer of 600 Brickell, isn’t shy about the benefit to her and her company.
“Our leasing is at a record pace, and we are getting the highest rates in the market,” she said in a recent interview. “I think tenants who are looking for this type of building recognize the Platinum level of quality.”
For example, Cockrum recently signed Northern Trust Bank to relocate to the building. The bank said the LEED Platinum rating was an important factor in the decision.

“The decision was influenced by 600 Brickell’s infrastructure and amenities, including an internationally certified information technology security system, expandable IT capacity and a green environment that benefits the health and well-being our employees,” said John Fumagalli, president of the bank’s Florida operations, in a news release.
‘It just makes sense’

Getting the USGBC’s highest certification was important to Cockrum, but building quality was more important, she said.
“Forget about LEED; it just makes sense,” Cockrum said. “If someone said to you, ‘I can save you 3 million gallons of water a year for X number of dollars,’ would you do it? I said, ‘Why wouldn’t I?’” Cockrum says she is surprised such standards are not required for all buildings.

“We are diverting 3 million gallons of water a year from the city’s systems,” Cockrum said. “If you believe fresh water may be a precious commodity, think about how important that will be. But you can’t renovate a building to have that. It has to be built that way.”

Based on her experience, the most valuable feature for occupants is the quality of air and light in the building. Many studies have shown fewer sick days in LEED-certified buildings, and Cockrum said her company has noticed that impact on the staff.

Edwards & Zuck, the engineering firm on the project, said the building is one of three LEED Platinum-certified high-rise buildings on the Eastern Seaboard, and one of only 13 of its size in the world.
THE DETAILS:

600 Brickell’s green features
• 14 percent lower energy costs than average code compliance.
• 30 percent less water use than an average office building.
• 10,000-gallon tank for rainfall and condensate collection used for landscaping and fountains.
• Energy use is monitored through a building automation system and adjusted to maximize efficiency.
• 18 percent reduction in energy costs from CO2 sensors and dampers, adjusting ventilation to make HVAC systems more efficient.
• 15-foot perimeter of outer office space uses “daylight harvesting” to lower lighting costs by using sunlight on bright days.
• 2.5 million square feet includes 614,000 square feet of office space, retail space, parking and outdoor space.
• Motion-censor lighting turns off lights when no one is present.
• Ultra-low-flush fixtures and waterless urinals.
• Impact windows rated at up to 334 mph.
• Green housekeeping.
• Lunchtime shuttle.

With Temperatures Dropping, Interest in Energy Savings at Multifamily Properties Should be Heating Up

By Tal Eyal, FirstService Residential, 1/15/2014
Click here to visit original article

While winter made its official debut on December 21, the cold weather has been upon us for some time now and has gotten to extreme levels, including 20-year record lows across the country at the start of the year.
For boards, managers and other key decision-makers at multifamily housing properties, the dropping temperatures bring a rising interest in energy saving strategies, and a renewed focus on negotiating better utility rates. Facing a host of pressing management challenges throughout the year tends to put the issue of energy efficiency on the back burner. But each year, as the cost of heating common areas rises and fluctuates, the questions flare back up again: how can we save on costs and reduce our carbon footprint, and how can we help residents do the same? The fact is, by helping residents reduce their energy costs, properties are more likely to gain buy-in for those critical capital projects that come along.

With this in mind, some condo associations and executive groups have created energy committees to explore potential infrastructure improvements to common areas that create efficiency, and to determine how to negotiate better energy rates. Other HOAs—and rental property managers—have worked with their management companies to take concrete steps toward savings: conducting energy audits, implementing comprehensive energy conservation plans, and leveraging their collective purchasing power.

At FirstService Residential, for example, through our affiliate FS Energy, which focuses exclusively on energy management and advisory services, we have implemented a benchmarking and energy savings program for nearly 600 of our multifamily properties. The program, which began in New York City, has expanded to properties in Florida, and is launching in Chicago. In essence, the approach involves analyzing a building’s energy use and comparing it to similar structures; developing an energy maintenance plan to reduce consumption based on the findings of the initial analysis; and in the case of our northern properties, integrating an Energy Aggregation Purchasing Program to reduce natural gas and electricity costs.

The simple fact is that energy conservation is not just an important environmental goal, it should be a critical financial goal for every multifamily property. The correlation between better energy practices and real savings is irrefutable. Our program in NYC has realized more than $19 million in cost savings, while reducing the carbon footprint of our buildings by 68,630 metric tons, or 15.6 percent. We expect a similarly positive result in other regions of the country.

Ultimately, every multifamily property can benefit from some basic energy planning, along with some long-term infrastructure considerations. Some of the most important steps for properties to take include:
Conduct an energy audit: By assessing current energy usage patterns and costs, and by determining where conservation opportunities exist within a property, management can begin to develop a plan for savings. Every property that has not conducted a comprehensive energy audit should get one under way.

Pursue efficiency: Not only should boards and managers implement a procurement policy that prioritizes energy efficient products—including lighting, water heaters, and water saving devices—for common areas, they should develop a communications plan to encourage individual residents to take similar actions. Building management should consider offering regular energy savings tips in communications with owners and residents, along with opportunities to purchase energy efficient products at wholesale prices.

Train property management staff in energy conservation: Simple steps such as programming thermostats in common areas around usage patterns, and turning off lights in unoccupied rooms, can lead to savings. Staff should be trained to pursue strategies that reduce energy use.

Consider infrastructure improvements: Based on the outcome of their energy audit, properties may want to undertake more significant energy saving improvements, such better insulation, insulating window film, landscaping changes, and automated systems that monitor energy use.

While the winter weather puts energy use in the hot seat, the fact is that conservation and savings are year-round endeavors. Just consider the fact that in warmer climates, such as Florida and Southern California, cooling is the greatest expense. Even in New England, A/C use in the warmer months is a significant energy drain. With this in mind, decision-makers at multifamily properties should keep energy issues high on their list of priorities.

Tal Eyal is founder and president of FS Energy, the energy management subsidiary of FirstService Residential which advises residential property management clients of ways to reduce energy consumption, costs and emissions while improving property values and quality of life. Eyal oversees FS Energy’s operations, energy procurement business, as well as the data analysis and reporting of energy usage.