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Saving Energy In Existing Residential Buildings

By: Richard Leigh, P.E. & Eduardo Guerra

January 04, 2007

Recent initiatives in energy efficient new construction such as Local Law 86 and the rise of LEED certification are valuable first steps toward a sustainable future. However, the stubborn fact is that New York City and the rest of the U.S. are filled with residential buildings that date from the pre-global heating days of cheap fuel and cold winters, and an energy-efficient future is only possible if these buildings can also be improved. Experience in a program aimed at residential multifamily buildings shows that real reductions in fuel and electric use are possible and cost effective, but several key lessons have also emerged.

Recent initiatives in energy efficient new construction such as Local Law 86 and the rise of LEED certification are valuable first steps toward a sustainable future. However, the stubborn fact is that New York City and the rest of the U.S. are filled with residential buildings that date from the pre-global heating days of cheap fuel and cold winters, and an energy-efficient future is only possible if these buildings can also be improved. Experience in a program aimed at residential multifamily buildings shows that real reductions in fuel and electric use are possible and cost effective, but several key lessons have also emerged. These include:

  1. On average, observed fossil fuel savings are in excellent agreement with audit projections
  2. Electricity savings commonly are not fully realized, usually due to a change in usage by some building system not included in the audit
  3. Building management must be enthusiastic and competent
  4. Follow-up inspection and interaction are important since they uncover problems and allow the corrections that will ensure ongoing savings
  5. Without incentives, economic payback on energy investments, even at current energy prices, is often too slow to interest owners unless they have some other reason to implement the measures, especially in the hot market downstate
  6. Advancing energy efficiency in existing buildings will therefore continue to require incentives in some form or other for the foreseeable future

Three case studies will illustrate both the strengths and remaining issues in programmatic efforts to decrease fuel and electric use while providing the same or improved building services. The economic experience here leads us to some harsh economic realities.

For five years the Assisted Multifamily Program (AMP) was funded by the New York State Energy Research and Development Authority (NYSERDA) and administered by Hamilton, Rabinowitz and Alschuler, with technical management by the Community Environmental Center (CEC). Projects ranged from privately-owned five- and six-unit row houses to the 15,000+ units in Coop City. Standardized Energy audits incorporating computerized building modeling were performed by CEC and eight other engineering firms across New York State, resulting in a recommended scope of work for each project, accompanied by estimates of capital costs and energy and financial savings. The audits for low-income and assisted housing were funded by NYSERDA, and owners were also eligible for scaled incentives to offset a portion of the needed investment. The incentive payment was made in full only after a series of inspections confirmed that the measures had been installed in accordance with standards established for the program.

Annual inspections and a review of fuel and electric bills followed completion of construction for the first projects to finish the program. Overall statistics on eighteen of these projects were reported during the summer of 2006 and showed that on average the projected fuel savings of 24% had been realized (with an exception we'll discuss below), while for electricity we had projected savings of 38% in electric energy on average, but realized only 29%, which is still respectable. Let's look at three New York City projects from this group to tease out some reasons we did as well or not as well as we thought we would.

A Modest Winner
This vintage Brooklyn apartment house has thirty-five units and is owned and operated by a local non-profit. A moderate rehab was underway when the non-profit brought the building into AMP. An energy assessment by CEC recommended a condensing boiler for the existing gas-fired hydronic heating system as well as better controls, high performance windows, improved roof insulation, weathersealing, and flow restrictors on showers and sinks. Electric measures consisted of replacing old common area fluorescent lights with T-8 bi-level fixtures, putting a timer on the exhaust fan, and replacing refrigerators with Energy Star models and incandescent lights with compact fluorescent lights (CFLs) in the apartments. The measures were duly installed and inspected, and were expected to result in decreases of 33% in fuel use and 67% in electric energy (kWh) in the common areas. The assessment also predicted an average drop of 940 kWh/year in each apartment, but lacking sufficient individual electric bills we could not convert this to a percentage or verify it.

A year later we examined the building's fuel gas and common area electric bills. The gas usage was down by 40%, with the savings substantially exceeding our projections. Because the price of gas had risen more than we projected, the financial savings were even greater. Under these circumstances, people rarely demand explanations and we did not spend much time studying the discrepancy. The simplest reason would be that the old boiler was even less efficient than we assumed. In fact, our inspection found that the new energy management system (EMS, a boiler control system) had been disconnected during the summer, leading to excessive firing. With this corrected, the savings should be even greater.

Common area electric use was disappointing, however: it was essentially unchanged. The annual inspection uncovered two problems with the measures: the sensors in the bi-level lights had not been adjusted, leading them to turn on and off erratically, and, due to eccentricities in the wiring system, the timer for the roof fan could only turn three of the six fans off for the night. Although these problems would lower savings, there still should have been some reduction in electric usage. The explanation was found in the basement, where the control for the hot water circulation pump had failed, leading the pump to run at all times and increasing usage.

We informed the owner of these problems and will see in our next inspection whether it was possible to rectify them. Similar troubles with the bi-level lighting elsewhere have led us to recommend more stringent oversight of these installations, including a clear statement of who is responsible for individually setting the sensitivity of the sensors. Due to the fuel savings, the overall project was still cost-effective, with a simple payback of 9.5 years. The owner received an incentive, but some of the savings went directly to the resident's electric bills. Including only the owner's costs and savings results in a simple payback of 9.4 years, essentially unchanged, and too slow a return to interest many owners.

A Big Winner
This ninety-unit coop in the northern suburbs of New York City entered AMP very early. Taitem Engineering of Ithaca, one of AMP's "Technical Service Providers", audited the building and recommended replacing the inefficient oil-fired boilers that were heating the building and providing hot water. Because the fuel was #2 oil rather than gas, a conversion to condensing boilers was not practical, but the new boiler was substantially more efficient. They also recommended insulating many exposed hot water pipes and adding weather stripping to the exterior doors. Electric measures were limited to replacing common area lighting with efficient T-8 bulbs and electronic ballasts, and fixing a photosensor controlling the outdoor lighting. Installation proceeded without major problems.

Examination of the fuel and electric bills a year after completion showed spectacular success in reducing fuel use: the audit had projected a reduction of 12%, and the bills showed a drop of 33%! There is no certain way to ascribe these savings to one measure or another, and all contributed to some degree. However, the 58% of fuel used for heating dropped by 26%, while the remainder baseload (hot water) use dropped by 46%, so the hot water pipe insulation likely played a major role. Boiler replacement would have contributed to both of these areas, while our inspection revealed that the weather stripping had been compromised by a door replacement.

For electric use, the audit had projected an 18% decrease in the common areas, but examination of the bills revealed only a 5% drop. One reason was immediately apparent at the annual inspection: at the insistence of a coop Board member, CFLs in lobby chandeliers had been replaced by incandescent bulbs. This, however, would have only lowered the projected savings to 15%, not 5%. Since the lighting was the only electricity measure implemented, and it seemed to be operating correctly, some unrelated increase in electric use is suspected, but could not be found at the time.

Even ascribing the weak electric savings to poor performance by the electric measure (rather than unrelated changes), the project was a marked financial success. The annual dollar savings to the coop were more than double what had been projected in the audit, bringing a simple payback of 4.6 years. If we could offer these savings to all buildings, energy efficiency would expand like cell phone use!

And a Loser
Sometimes it doesn't pay to get out of bed in the morning. This thirty-four unit coop is located in an economically depressed part of Brooklyn and is managed by a local non-profit. The auditor recommended a standard list of upgrades including an energy management system (EMS), a new burner on the boiler, insulation, and weather sealing. He also recommended a substantial list of needed repairs to the roof, windows, and distribution system and, in the apartments, Energy-Star refrigerators and CFLs. The job was completed in about a year, and came in substantially under budget.

However, the one year examination of the bills revealed a disaster. Fuel use, predicted to drop by 58%, had actually increased by 47%! The inspection provided a host of explanations for this extraordinary finding.

First, the building had gone through three superintendents in as many years. None had been trained to use the EMS and had often disconnected it until it was damaged in a fire. That left the old Heat Timer in charge, and since it too was faulty, the superintendent usually operated the boiler manually, leaving it on until someone complained of excessive heat. The extraordinary level of fuel consumption indicates that this did not happen often. Further, many common area windows were broken, leading to infiltration which mitigated the excessive heat. Finally, visits to a sample of apartments revealed that most flow restrictors had been removed.

No common area electric measures had been recommended, but the electric use had increased by about 10%. This is probably due to incandescent security lighting added by the superintendent. Apartment visits revealed that only 25% of the CFLs remained, the rest having been replaced by incandescent bulbs after they "burned out". Two of the Energy Star refrigerators were also reported to have "burned out" and been replaced. Although not technically credible, these were the only explanations available.

This result indicates a need for some pre-screening of projects. Without meaningful management involvement, reasonable staff training, and basic security, there is no reason to fund an energy efficiency project. The money simply goes down the drain or up the stack, and a program dedicated to energy efficiency cannot, by itself, provide the resources and day-to-day coaching needed to rectify a situation like this. Cooperative interaction with other housing support programs experienced in increasing management and resident capabilities could be part of the answer, but, to our knowledge, does not now exist.

What's to be Done?
Returning to the eighteen buildings in the sample we reported on last summer, there is no question they were an environmental success, lowering greenhouse gasses by 26%, or 32 metric tons of CO2 per 1000 square feet of heated space. (Most of this comes from reduced electric generation, helped by three electric heat conversions not discussed here.) The financial situation is a little less clear. All told, an investment of $3.1 million produced a savings to investment ratio (SIR) of 1.4, corresponding to a simple payback of eight to ten years. This includes all outlays (except the audit cost of $6-8000 and programmatic oversight), and includes all income, including that going to residents. If the residents have their own electric accounts, the owner's return is smaller. In a world where players hope to make 30% return by flipping a building in a few years, this is not very interesting. Also, although increasing prices have led to increased cursing of fuel bills, the annual outlays are still less than mortgage and payroll expenses, leaving energy efficiency with a relatively low economic profile.

This harsh economic reality explains why we have not seen the same explosion of interest in energy efficiency in existing buildings that we have in new construction. There, being "green" is a sales hook and an increasingly useful way to make a new building stand out and bring honor to its architects. But in existing buildings, energy efficiency is a way to save a little money. This is not enough to promote real growth, and since it must be done for the good of the planet, a bundle of carrots and sticks will continue to be needed. For the present, we have carrots in the form of incentives from NYSERDA and federal tax benefits (aimed largely at single family homes). We could really use a stick. How about a gradually increasing carbon tax on fuels and electricity? If the resulting income is applied as incentives, it could be revenue and cost neutral, by promoting investments that are cost-effective, but don't offer a quick enough return to attract investors. The hard truth is that energy efficiency in existing buildings is not ready to grow rapidly on its own, and some combination of pushing and pulling will be needed for some time to come.

Richard Leigh, PE is Senior Engineer at The Community Environmental Center in Long Island City, New York. Eduardo Guerra was an Energy Engineer at CEC and is now at Siemens.

Many thanks to NYSERDA for funding the work described here under the Assisted Multifamily Program and to Nancy Ralph for many useful suggestions. All the opinions are our own and are not necessarily shared by either CEC or NYSERDA.

February 4, 2007; Readers Weigh In

Sallan | Snapshot | Richard Leigh, P.E. & Eduardo Guerra | Comments

Michael Bobker

As a long-time energy practitioner in NYC multifamily housing, I would like to validate Richard Leigh's case study findings. Although our industry does not often enough rigorously document savings results, the range that he finds from "beyond expectation" to "dismal" is probably about right. Finding such a range of results with similar technology applied, tells us something important: that the potential for energy efficiency is very real but is not to be achieved solely by a "technical fix."

There are critical behavioral dimensions that must be addressed before, during, and after installation of equipment. If key behaviors are not changed, then the technical-fix investment will under-perform, perhaps even be wasted. Richard's case study provides an excellent example of this. Published studies by the Texas A&M Energy System Lab of a large sample of retrofitted public buildings show quite conclusively that training and information feedback to operators makes a difference to long-term system performance and savings. The interesting implication of this finding is that some portion of the savings may even be achievable just through behavioral change.

It is all-too-common today for the projected savings of new systems to be accepted as the actual outcome. The fallacy of this must be recognized and taken into account by program design. We'd like to think that the technical-fix installation, substituting capital for energy, is the end of the story but it is not. Knowledge and skilled labor must also be applied, informed long-term by actual performance data. The costs of training, education and performance monitoring cannot be ignored in our energy-saving calculation.

(The author is involved in building performance monitoring and continuing education of building operators through the CUNY Building Performance Lab.)

Adam Hinge

For another evidence rich report on energy efficiency in high performance buildings, here's an analysis prepared for the 2006 ACEEE Summer Study on Energy Efficiency in Buildings.

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