Evaluating risk in HVAC sustainability initiatives isn’t as simple as you think!
By: Zach Denning
Hiring an Energy Services Contractor or ESCO is typically the first step towards achieving your sustainability goals. In a commercial building they evaluate energy consumption and recommend potential upgrades with quantifiable payback – Often times leading to low-risk investments that drive the value of the property and guarantee savings – Well, at least for the first year.
In commercial buildings HVAC has historically consumed 50% of your utilities, or around $1-3.00 per square foot annually in energy costs, making it a prime target for savings. Owners and tenants typically invest $2-3.00 per square to drive down HVAC related costs under the impression of a 2-4 year payback – That’s $100-150k in a 50k sq. ft. building and almost $6k in estimated monthly savings! But do you know how those savings are broken down? Or were the lump sum savings and payback enough for you to make the investment?
A recent interview with asset managers regarding their sustainability initiatives revealed several inconsistencies with how they evaluated and approved their investments in utility savings. Reviewing initial contracts and line itemizing HVAC returns exposed that the majority of their savings centered around controllability of the equipment – Not high-cost replacements or upgrades. Although modifications to the existing building technology or “temperature cruise-control” yielded more than half of their estimated returns, it also came with the highest amount of neglected risk!
If I buy a brand new Toyota Camry that’s expected to get 35 mpg on the freeway and take away the cruise control I may be lucky to get 25 mpg on my way to work. Building automation, or your building’s “cruise-control,” is the leading cause of return impact and risk in sustainability projects. In our $150k investment above, nearly $40k of the annual savings are driven from the building automation. Breaking down the different building automation measures reveals that on average each measure makes up 7-10% of your total returns! So why would the technology be considered a risk?
Servicing HVAC and its related technology can be a challenge after implementing sustainability-based projects. Control of the HVAC equipment becomes complex. Incorporating more advanced algorithms to properly measure and control to the load in your building – No longer does the HVAC just turn on and off. The same way cruise-control in your car adjusts the throttle up and down to account for hills, HVAC ramps up and down to account for loads like weather and occupancy.
When servicing these newer, ASHRAE Title-24 and LEED based systems, technicians can find themselves overwhelmed and unable to decipher the new algorithms when challenged with solving an HVAC related issue. If a door consistently blows open the fix is not as simple as flipping a switch. Reverse engineering code to predict and repair a problem is often replaced with local, physical overrides or even worse software-lockout of routines – All leading to substantial, untraceable losses in your return.
Maintaining HVAC-related investments is much different than maintaining the actual equipment. Owners and tenants are beginning to realize that more advanced monitoring is necessary to ensure savings and forecast problems before they impact the bottom-line. Traditional preventative maintenance contracts in building technology and HVAC equipment are necessary, although their primary function is not to evaluate, forecast and repair problems as they relate to your investment. The shift to financial-based HVAC management is leading building owners to find more technological ways to measure equipment performance real-time, in order to forecast repairs and curb losses.
My name is Zach Denning and I’m the CEO and owner of EnerDapt, Inc. We’re an HVAC engineering firm that utilizes cloud-based technology to bridge the technical and financial gaps commonly found in HVAC management strategies. Our OCMS EnerVise platform keeps customers knowledgeable about their building from life-cycle costs to forecasted maintenance, upgrades, and equipment replacements. You can reach me at firstname.lastname@example.org or visit our website at www.enerdapt.com