Facility managers are turning to new solutions as a way to ease the costs associated with their buildings’ HVAC systems.
Officials at Duquesne University in Pittsburgh, PA, wanted to slash the amount of energy their university’s HVAC systems were consuming. Energy costs were a significant expense at the university, and in difficult economic times university officials needed to reduce spending however they could.
The university turned to thermal energy storage to do this. Working with CALMAC, a New Jersey–based manufacturer of thermal energy storage systems, Duquesne University now stores electricity generated during the less-costly evening hours—which has a lower impact on the school’s budget—in the form of ice. During the day, when electricity is generally higher, this ice, stored in tanks in the basements of university facilities, is melted, cooling the university’s buildings.
The thermal energy storage system works well with the university’s existing combined heat and power plant, says George Fecik, executive director of facilities management at Duquesne University.
Fecik doesn’t know yet how much money the university is saving in HVAC costs thanks to its thermal energy storage system, but he did say he was pleased with the early results.
“This is the first full year of service [with the system], so we haven’t had a chance to put all the numbers together yet,” says Fecik. “Basically though, we feel that we have added an equivalent of a 1,200-ton chiller without increasing our peak demand, so the savings would be substantial.”
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Photo: Lennox Commercial
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Fecik and Duquesne University are far from alone. Facilities managers with schools, corporations, manufacturing plants, and municipal buildings are all looking at ways to save money on heating and cooling their buildings. HVAC systems can suck a substantial amount of money from a business’ or government agency’s budget. And with energy costs fluctuating so wildly, it can be difficult to estimate from one year to the next just how much it will cost to heat and cool a building.
That’s why so many facility managers are turning to new solutions as a way to ease the costs associated with their building’s HVAC systems. And this is a trend that few in the HVAC industry say will lessen anytime soon.
Just ask Fecik. He says he expects more facility managers to embrace combined heat-and-power systems, thermal energy storage, and other technologies as energy prices continue to swing so wildly from year to year.
“I’m surprised that more don’t use this technology already,” he says. “The one big advantage for us is that we added 6,000-ton-hours of cooling without adding a cooling tower. This is significant for us because of space limitations. I just think the people get scared of something they are not experienced with, and would rather rely on old, familiar equipment.”
Other industry professionals expect more companies, facility managers, and building owners to search out new solutions for the problem of rising HVAC costs.
Denise Ernst, director of commercial marketing for Lennox Industries, the heating and cooling company, says that her company’s commercial customers are discovering that they can immediately reduce their HVAC expenses by as much as 40% by replacing 12- to 15-year-old rooftop units with high-efficiency equipment.
“By combining the immediate payback of lower monthly energy bills with an equipment-leasing program, many customers are able to see the payback begin in as little as one month from the equipment installation,” says Ernst.
A growing number of Lennox customers are investigating installing higher-efficiency HVAC equipment, Ernst says. They’re willing to swallow the upfront costs for the hope of lower energy bills in the immediate future.
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Photo: Lennox Commercial
Companies and facilities managers have always been focused on controlling the amount of energy their HVAC systems consume. |
“Our customers are extremely focused on reducing their energy consumption, because it just makes good business sense,” she says. “Certainly, lowering operational expenses is more important than ever in this economy, and reducing HVAC-related energy costs allows our customers to save money without affecting the quality of their product or their customers’ experience.”
For Mark MacCracken, chief executive officer of Fairlawn, NJ-based CALMAC, the easiest way for building owners or companies to reduce the amount of energy their HVAC systems consume each day is to switch from using electricity generated during peak hours to that generated during off-peak hours.
This happens to be the business of CALMAC, which manufactures thermal energy storage systems. These storage tanks—larger buildings can boast more than 40 tanks in their basements—store electricity generated during evening hours in the form of ice. During the day, when electricity is generally higher, this ice is melted, cooling the building.
It’s a way for building owners to reduce the amount of energy they spend cooling their facilities by as much as 20% to 40% a day, MacCracken says.
“There is only one form of energy that has not gone up in costs in the last 30 to 40 years,” he adds. “And that’s off-peak electricity. On-peak electricity has consistently gone up in price. Off-peak electricity has stayed the same or gone down during the last three to four decades. To me, that says to building owners that the most important thing that they can do to stabilize energy costs for their buildings is to install systems that can shift their power to nighttime electricity usage.”
Controlling energy costs has always been a priority for building owners and company executives, MacCracken says. But today, it is even more important, he says.
There are two reasons for this: As the national economy continues to struggle, companies are looking to save as many dollars as possible. Firms that once were not as focused on studying their energy costs are now looking more carefully at how much energy their buildings and facilities consume, and how much this energy usage impacts their bottom line.
At the same time, energy costs have become more unpredictable. It’s difficult for companies to budget in a reasonable estimate of how much money they’ll spend each year on energy costs. This has become a growing problem for companies working on budgets that boast little breathing room.
By taking steps to reduce the amount of energy their HVAC systems consume, building owners and company financial officers can at least gain some control over their energy budgets, MacCracken says.
He says companies are so focused on controlling energy costs today, that they’re more willing to invest in technology and systems that come with a longer payback period. This is a new development, and one that MacCracken hopes to see more of.
“Are energy costs more important now?” asks MacCracken. “They absolutely are to many companies. I think that one of the true benefits that will come out of this economic downturn is the death of the focus on the three-year payback. For 33 years, I’ve been hearing that whatever systems a company invests in, they have to pay back their initial costs in three years, or it doesn’t make financial sense. That’s a very high bar for any system to meet. But I think this is finally changing.”
MacCracken says that he’s finally seeing more companies willing to invest in HVAC systems that have a longer payback period of four years or seven years. That’s because forward-thinking companies are more cognizant of how expensive energy costs can be each year. If an HVAC system can reduce these energy costs enough so that in seven years it pays back the initial cost of its purchase and installation, these companies can then enjoy several years of reduced energy costs as a financial bonus, MacCracken says.
To convince companies that might be skeptical, MacCracken and his fellow company officials will meet with their chief executive officers and chief financial officers to show them how much money a Thermal Energy Storage system will save them each year, and how long it will take for those savings to exceed the initial cost of the system.
By appealing to companies’ bottom lines, MacCracken says, it’s easier to convince executives to invest in newer HVAC technology such as thermal energy storage systems.
“I’ve tried to figure out where that three-year-payback mindset came from. I have yet to figure out the reasoning why someone would be more hesitant to invest in a product that comes with a 25% return on your investment each year, which would be a four-year payback,” says MacCracken. “I don’t understand it. I know it’s not a sexy investment. It’s just an energy expense. But I’m hoping that we’ll see less emphasis on that three-year payback time.”
Companies and facilities managers have always been focused on controlling the amount of energy their HVAC systems consume, says Neil Maldeis, energy engineering manager with Trane, the giant HVAC manufacturing company. But Maldeis, who manages on Trane’s corporate side, says he, like MacCracken, is seeing an even greater focus on this in today’s sluggish economy.
“Because of the economic situation, our clients are looking at any way possible that they can save money,” says Maldeis. “They are looking at anything that will help the bottom line.”
There are several approaches that Trane’s clients are taking, he says. Some are looking to reduce HVAC energy consumption with basic short-term strategies. Companies taking this approach call in firms such as Trane to make sure that their air-conditioning and heating systems are working as efficiently as possible.
A simple tune-up of these systems can dramatically reduce the amount of energy they consume on a daily basis, Maldeis says.
Other companies are asking HVAC professionals to retro-commission their heating and cooling systems, he adds. Trane engineers, for instance, will often discover that the HVAC systems in a building are running 24 hours a day, even though the building itself is only occupied eight to 10 hours a day. That’s a lot of wasted energy spent on a mostly empty building.
By retro-commissioning their HVAC systems, building owners can either reduce the amount of time heating and cooling systems operate when the building is nearly empty or cut off the systems entirely in the latest hours of the evening or earliest of the morning.
These short-term solutions are usually arrived at following a building audit, Maldeis says. In a building audit, engineers can study the HVAC systems to make sure they are operating as efficiently as possible. They can also quickly discover easily fixed problems—such as damper operators that aren’t functioning and, therefore, are leaving dampers open and sucking hot air into the building during the summer months—that can save a significant amount of money in energy costs each month, he says.
Ernst, from Lennox, says that energy audits can uncover such simple problems as dirty evaporator and condenser coils and filters, improper refrigerant charges, and dusty blower components. These can all reduce an HVAC system’s performance, driving up monthly energy expenses.
An energy audit can also convince facilities managers of the wisdom of installing a simple programmable thermostat, Ernst says. These thermostats allow businesses to only heat and cool areas when it is needed, again saving a significant amount of HVAC costs every year.
Maldeis is happy to see, too, that a growing number of businesses are taking a longer-term approach to managing their HVAC costs. To him, the long-term solutions, which may not result in as much immediate payback, are often more valuable as the years pile up.
When working with Trane engineers to create long-term HVAC cost-saving measures, building managers have to look at how their facilities influence their company’s mission, Maldeis says. That may sound rather philosophical, but he can explain it in more grounded terms, too: If a building is comfortable year round, employees tend to be more productive. Companies, then, are able to get more work done and accomplish more in a given year.
The same holds true for school buildings, Maldeis says. Today’s school districts are under increasing pressure to raise the standardized test scores of their students. Many public schools also face scrutiny when their students’ grades drop.
However, if schools invest in HVAC equipment that does a better job of cooling and heating their buildings to proper temperatures, their students will be more comfortable. It stands to reason, Maldeis says, that comfortable students will perform better and will learn better. Their grades should rise if they’re working in comfortable buildings.
“It’s all about how the building and operations support the outcomes you want from your business or school,” he says. “Schools want to improve test scores. Look at your building design and operations and go with the systems that help you reach the outcome you desire.”
This applies to office buildings, too, Maldeis says. Company owners want their employees to be as productive as possible. If a building is heated and cooled properly, these employees will be more comfortable.
“It makes sense to try to drive employee productivity up as much as you can,” he adds. “Making them comfortable helps do that. We are seeing more progressive and visionary companies viewing their buildings as more than just pure cost. They are viewing their buildings, and the HVAC systems inside them, as supporting their core missions.”
Ernst recommends that companies investigate the many rebates that are available from utility companies and government agencies that will make the purchase of high-efficiency HVAC equipment more affordable. Building managers should explore some of the leasing programs and discounts that are available from HVAC manufacturers; these can be helpful to customers who need to improve their cash flow and reduce their energy consumption.
Ernst also recommends that building owners schedule a load assessment to determine how much HVAC capacity their facilities really need. An oversized RTU doesn’t work efficiently.
Finally, she advises building owners to choose HVAC equipment with options such as economizers, which allow buildings to take advantage of free cooling when possible, and look for standard features such as thermostatic expansion valves to provide peak cooling performance.
Businesses and facilities that reduce their HVAC costs can see dramatic benefits, MacCracken says.
As an example, he points to schools. If school districts can reduce the operating costs to heat and cool their buildings, they can then employ a greater number of teachers. They can, in essence, increase the quality of education for their students by reducing their infrastructure costs.
The amount of energy savings a building can experience each year depends on several factors such as the size of the building and the price of electricity in the region, MacCracken says. But some school districts can save as much as $100,000 a year by taking steps to reduce their HVAC energy consumption, he says.
Schools are actually some of CALMAC’s more reliable customers, MacCracken says. That’s because they’re more willing to invest in HVAC equipment that comes with a longer payback period.
“Schools and universities generally have a longer time horizon than most commercial buildings do,” says MacCracken. “You know that the school will be occupied for the next 30, 40 years. Making investments that are four-year or five-year paybacks is not an undoable thing. I think that will become more common, too, though, on the commercial side. At the same time, I think the acceptable payback level for schools will move even higher into the five-, six-, seven-, or even, eight-year range.”
In addition to saving energy costs each year, systems such as thermal energy storage systems are also friendlier to the environment and can help buildings seeking LEED status from the US Green Building Council.
For instance, while buildings that operate a thermal energy storage system won’t necessarily reduce the amount of kilowatt-hours of electricity the building consumes, it will save a significant amount of energy at the power plant itself, MacCracken says.
It’s more efficient for power plants to create and deliver electricity in the night than it is to do the same during peak daylight hours, MacCracken says. By shifting to off-peak electricity then, a building saves a tremendous amount of source energy at their local power plants.
Like MacCracken, Maldeis has seen a growing number of clients willing to invest in HVAC equipment that comes with a longer payback period. These companies do have one caveat, though: The HVAC systems must make a noticeable difference in the amount of energy their buildings are consuming, and it must be an effective and efficient system that keeps the facility comfortable year-round.
“The government buildings, especially, are willing to absorb a longer payback period with their HVAC systems,” says Maldeis. “When it comes to the private corporations though, we are seeing a wide variety. Some groups are more strategic than others.”
Many of Trane’s clients are interested in exploring more innovative ways to provide heating and cooling to their buildings, Maldeis says. For instance, a growing number of building and facility managers are interested in learning more about solar hot water heating.
“A lot of customers are more interested in renewable energy solutions,” he adds. “Traditionally, these have been expensive. But a lot of our clients are now interested in including them in their solutions, and they’re willing to accept a longer payback period for them.”
In the northwest part of the country, many Trane clients are installing biomass boilers, Maldeis says.
Also, in the future, buildings may rely more on LED lighting, he says. This will save office buildings a significant amount of money in yearly energy costs. It may also have an impact on a building’s cooling costs, because LED lights give off less heat than standard lighting.
“The big message here is that there is a lot more interest in customers on reducing their HVAC energy consumption,” says Maldeis. “People are reading about alternative ways to heat and cool their buildings. They are asking us about it. It’s becoming part of the conservation strategy for buildings.”