The Building Advisor

Is it us, or does it feel like it’s all about us lately?

Building Retrofits Need an Extreme Makeover -Reuters – “the industry as a whole needs a robust set of data on post-retrofit performance and payback before they will be convinced that the opportunity to reduce operating costs is real, the risks are low, and the ROI is high enough to justify investments in efficiency.”

Image by Ben Heine

How the Fate of PACE Could Influence the Clean Energy Economy – GreenBiz.com – PACE financing is a potentially revolutionary way to retrofit commercial, residential, and industrial properties with energy efficiency and renewable energy technologies. The program overcomes one of the largest hurdles to investment in clean energy — the upfront cost.”

Creating 625,000 jobs and saving $64 billion through energy efficiency – Grist – “Efficiency Works” [PDF], a major new report by Bracken Hendricks, Bill Campbell, and Pen Goodale, finds that a straightforward set of policies aimed at upgrading just 40 percent of the residential and commercial building stock in the United States would:

• Create 625,000 sustained full-time jobs over a decade.
• Spark $500 billion in new investments to upgrade 50 million homes and office buildings.
• Generate as much as $64 billion a year in cost savings for U.S. ratepayers, freeing consumers to spend their money in more productive ways.

Universal Benchmarking Is Essential in the Fight Against Global Warming – Huffington Post – “We need the benchmark numbers to motivate change. Without them, how will we measure progress? How will we create the most effective policies and incentives?”

Image: Ben Heine’s photostream on Flickr

Sauer Incorporated's HQ in Jacksonville, Florida

If the existing building stock of commercial real estate in the U.S. is an agreed-upon goldmine for energy savings, hospitals and health care facilities represent a pot of gold at the end of the efficiency rainbow.

Hospitals use about 2.5 times the amount of energy as a similar-sized commercial building, according to a 2009 estimate published in Environmental Leader. “As a sector, hospitals and health care facilities account for a disproportionate amount of energy use and emissions, EL’s article “Hospitals Due for Energy Efficiency Overhaul” states.

Ed Brady made the healthcare / efficiency connection with BuildingAdvice. Brady, a Service Account Representative for mechanical contracting company Sauer, Inc.’s Columbus, OH location, started using BuildingAdvice in early 2010. In only a few months of using the efficiency platform for commercial buildings, Brady had quoted $750,000 in energy efficiency retrofits to Fayette County Memorial Hospital, a two-building, critical access hospital in Columbus.

“Fayette was ready to think more seriously about their energy spend,” Brady said by phone in August.

Sauer, a four-branch company with an annual revenue of $478 million, had committed to pursuing energy services as part of its overall corporate strategy this year. Sauer, Inc. sister company Ruthrauff Sauer, based in Pittsburgh, PA, recommended BuildingAdvice to Brady and his associates in January of this year. The following month, Brady was putting AirAdvice’s industry-leading energy services platform to work.

“We needed a competitive edge to both maintain existing service agreements and expand new ones,” said Brady. He worked with his AirAdvice support representative, Zack Buquet, to discuss and design a marketing strategy around the product. Together, they agreed that offering free benchmarking was the strategy that best fit Sauer’s needs.

Fayette County Memorial Hospital

“The contract customers weren’t biting on the energy services,” said Brady of his existing client base. “We found that by offering free benchmarking, you will definitely get potential new clients and some nice first meetings,” Brady said. “It doesn’t really take that much of my time to do the benchmarking.”

Brady had done roughly seven benchmarks for a variety of property types when he approached Fayette County Memorial Hospital, whose leadership showed a very favorable reaction to the energy benchmark – especially considering one building scored the lowest on the EnergyStar ratings scale possible, the other very low.

After performing a complete canvas of all mechanical equipment, Brady and associates found boilers from 1974, outdated cooling towers, and rooftop units near ASHRAE end-of-life. Sauer budgeted replacement costs, estimated paybacks and used a BuildingAdvice Energy Audit to propose, among other retrofits:

• $500,000 to replace old boilers and pipes
• $185,000 for rooftop unit replacement
• $20,000 for lighting

The meeting went well, and the hospital is seeking funding by to pay for the bulk of the work by early 2011. In the meantime, the hospital will use in-house resources to address the low-cost recommendation from BuildingAdvice’s Energy Assessment to replace the lighting system. Savings from these upgrades will be show results to be evaluated in January, particularly in electrical usage. The hospital is then eligible to push the lighting retrofit through the local utility to become eligible for rebates.

Brady is clear that his relationship with Fayette is due 100% to starting the energy conversation and following up with BuildingAdvice reports. Doing the assessment allowed him to get in the door, survey the entire facility and identify all of this project work.

Ruthrauff Sauer, Pittsburgh, Pennsylvania

Moreover, Brady has discussed ongoing continuous energy monitoring – another service available through BuildingAdvice – after the hospital has its equipment replaced, to monitor, manage, and ensure ongoing energy savings “in real time,” as Brady puts it.

“BuildingAdvice not only gets people’s attention, it’s useful,” said Brady. “We have had some great successes already.”

A month ago,Chris H., Assistant Global Energy Solutions Manager at Solutia Inc., posted “Five Overlooked Building Improvements with Quick ROI that Increase Energy Efficiency” to myfacilities.net.

In it, he touches on a variety of utility-saving solutions, the most pertinent to The Building Advisor being number 3, Energy Management Systems.

He writes,

Greg Galusha of MacDonald Miller in Bellevue, WA

“An energy management system consists of a combination of building management systems and advanced software solutions that work together to control a building’s HVAC operations…The system ensures optimal energy usage, resulting in greater efficiency and lower utility costs.”

He then posted the post to the Building Owners and Managers (BOMA) International LinkedIn Group under the question header, “How can you increase energy efficiency and reduce utilities?”

To date, there have been 56 comments.

Some of them have been from blog spotlightees before, like Greg Galusha of MacDonald-Miller Facility Solutions (“MacDonald-Miller Finds BuildingAdvice Perfect Fit for Energy Efficiency in Small to Midsize Buildings“) and Zack Buquet, one of our own here at AirAdvice and a Building Advisor contributor.

The long and the short of it is this: talk of replacing HVAC units, building envelopes, window film, demand response, lighting, and reflective insulators, elevator motor “soft starters.” From the short and sweet to vociferously verbose, there is no shortage of ideas out there on how to save dough on energy. We just need to DO it.

Great comments from Gary Markowitz, President, Kilojolts Consulting Group, Inc. & KCG Energy LLC. Gary touches on culture – shifting the mindset of a company toward energy efficiency as a priority. Julius Walcyznski at Canada’s Pulse Energy has some great things to say as well regarding occupant engagement.

Zack Buquet, Energy Services Business Consultant at AirAdvice

But here at AirAdvice, we’re looking at the causes of energy waste in buildings, and work with HVAC contractors to attack the problem. Those contractors in turn work directly with the building owners and managers BOMA serves, the decisionmakers behind energy efficiency decisions. Until those owners and managers recognize that they are throwing money away unnecessarily, the building’s occupant engagement can’t happen.

BOMA’s LinkedIn discussion also contains quite a bit of chatter around energy benchmarking, assessments and audits; it’s great to hear these words being used with knowledge, even if it is within a fairly specific community.

Mike Zimmerman, CEO of BuildingIQ in Sydney, Australia, wrote:

Mike Zimmerman, CEO of BuildingIQ

“…Energy Reporting systems such as Lucid Designs provides energy-use metrics from meters and the BMS [Building Management System?]. There are also now Energy Optimization technologies that supervise how the BMS runs and and make the building much more intelligent. Our system, called BuildingIQ…is a Predictive Energy Optimization system that incorporates energy prices, weather forecasts and ASHRAE comfort models to optimize energy use, cost and comfort. This type of proactive system that interacts with the BMS can save 10-20% of total building energy and is paid for on a subscription basis…”

Throughout the conversation, claims of savings between 10-30% on utility bills are made.

Where do you think a realistic savings percentage average from the use of energy management systems looks like?

And is this savings driven more by occupants or building systems?

Drop us a comment!

Shell Ridge Property Management Co., Inc. maintains approximately 300,000 square feet of commercial space in the San Francisco Bay Area. Since 1980, Shell Ridge has specialized in asset management strategies for small medical offices. Its 15 buildings range from 40,000 to 100,000 square feet.

Shell Ridge’s medical office properties represent a desirable portfolio for mechanical contractors. Marina Mechanical, a 50-year-old company headquartered in San Leandro, Calif., began maintenance for a Pleasanton, Calif. Shell Ridge property five years ago. In the ensuing years of service, energy conservation was rarely discussed.

But when Marina began feeling heat from its competitors in the middle of a down market, it turned to its best customers to expand relationships.

Marina had obtained training on the BuildingAdvice energy services diagnostic platform in November of 2009, and began the process of leveraging its action-oriented reports as a differentiator.

Gamechanging Energy Services Offering

“We offered to show both the property manager and owner at Shell Ridge, some sample energy benchmarking and assessment reports,” says Denny Mann, Vice President of Service with Marina Mechanical, when explaining how he got the energy conversation started. “The property manager was actually very educated on energy benchmarking, and as a result, very interested. Once she saw the type of information the BuildingAdvice reports gave, she was extremely interested.”

“BuildingAdvice differentiated Marina from other mechanical contractors waiting to get their foot in the door,” says Denny.

Denny offered to do complimentary energy assessments on two Shell Ridge buildings. Shell Ridge has several buildings where Peak Day Pricing, a program of local utility Pacific Gas & Electric (PG&E), would come into play.

Peak Day Pricing (PDP) is PG&E’s demand response program, which acts as an incentive for business owners to curtail their facility’s energy use during times of peak usage. During the summer, PDP substantially raises energy prices on “event days” (above 98 degrees); businesses have a 24 hour notice when there will be an event to lower their energy usage for that day.  By charging a very high rate on event days, PG&E motivates customers to invest in strategies that will lower their consumption overall, and especially on the peak days.

Peak day pricing is specialized to the PGE territory, but not a unique phenomenon.

“Peak day pricing is definitely acting as a market stimulator for energy services and spurs client interest,” Denny said. “I think soon people will be lined up to get involved with energy reduction conversations.”

Taking Action

In going over the results of the assessment reports, conversations began about what Marina could do to help Shell Ridge avoid demand charges across the company’s property portfolio.

Which led to a second meeting with the owner, and an agreement to generate Energy Benchmarking Reports on all of the Shell Ridge properties to determine Energy Star scores.

“BuildingAdvice reports marked our transition from just being their mechanical contractor to forming a partnership. It completely transformed the relationship,” says Denny.

With portfolio-wide benchmarks on the docket, Marina took recommendations from the first two properties’ energy assessments to Shell Ridge ownership.

“BuildingAdvice helped us identify that the building was running when it didn’t need to be,” said Denny. Supply and reset strategies were created, so that the building was not not pouring 55 degree air into the interior when clients were not there, all of which were identified in the report.

Two low- and no-cost recommendations were approved and completed April of this year. Shell Ridge made the decision to complete the service based on the return on investment outlined in BuildingAdvice’s Energy Assessment Report. In addition to revisions to lighting and HVAC schedules based on peak day pricing, the report showed a seven-year payback on a demand control vent.

“We’re letting those changes take effect,” said Denny. After a 12-month period, savings achieved will be tabulated.

Next Steps and the Advent of Mandatory Energy Disclosure

As of late June, Marina wrapped up the energy benchmarking process on all of the Shell Ridge portfolio. Based on buildings’ Energy Star scores, Marina will make recommendations on which properties need energy assessments.

Looking ahead, the mandates of California’s Assembly Bill 1103 (AB 1103) state that non-residential business owners or their agents are required to input energy consumption and other building data into the Environmental Protection Agency’s Energy Star Portfolio Manager system, which generates an energy efficiency rating for the building.

As of January 1, 2010, AB 1103 mandated disclosure of a building’s energy data and rating of the previous year to prospective buyers and lessees of the entire building or lenders financing the entire building. That deadline has since been pushed back, and the task of devising a disclosure schedule has fallen to the California Energy Commission (CEC). The CEC is in the process of drafting a new compliance schedule; January 1, 2011 is speculated to be the new required disclosure date.

New York City, Washington DC and other regions have adopted similar required energy data disclosure. Smart owners and managers are on the move to meet deadlines.

Net Impact

The ability to offer energy services differentiates providers. Marina knew a competitor was making an aggressive play for service agreements in Shell Ridge’s multiple locations. Yet, in the same timeframe Marina stayed in discussions with Shell Ridge by centering their meetings around energy services through BuildingAdvice.

“After going through BuildingAdvice training, we quickly realized that being able to offer our customers a systematic, low-cost / no-cost approach to reducing their energy consumption would change the way we were viewed.”

BuildingAdvice has “helped us retain current business and significantly raised the bar on the services we offer.”

Portland-based PECI has won an $18.8 million contract from the California Energy Commission to manage an “EnergySmart Jobs” program that will create more than 200 California jobs.

The “EnergySmart Jobs” program will provide energy efficiency training throughout California to implement efficiency upgrades on commercial buildings. The company will also hire and retain over 200 contractor and energy surveyor positions. The program will focus on regions within California with lots of opportunity for efficiency savings and high unemployment.

The 18-month program is paid for with American Recovery and Reinvestment Act funding and is slated to deliver $13.9 million in initial energy savings for electricity rate payers during the first year and a half.

The program will also create three jobs in Portland, Sustainable Business Oregon reports.

Additional program partners include private contractors, utilities, manufacturers, and the California Conservation Corps. “The Conservation Corps ‘Corpsmembers’ are comprised of unemployed or otherwise economically disadvantaged people between the ages of 18 and 25, with the intention of helping those in greatest need get a ‘head start’ in the employment market,” according to PECI’s press release.

PECI has a longstanding relationship with the State of California, having delivered energy efficiency programs throughout the state for 20 years and employing 28 in the state.

Contractor Magazine recently published an article titled, “What Bad Looks Like” in which it described the state of the mechanical contracting industry.  It lists the largest contracting firms and provides breakdowns by markets served, type of work, and geography.  Not surprisingly, the bottom line is that the bottom line isn’t so good these days.

A “tough year.”  Yes, it’s been a bit tough.  And the only markets predicted to improve in the near term are healthcare, educational, public safety and transportation.

Fine, yes, the contracting business is a difficult one these days.  I think we all knew that.  But, what did we at AirAdvice take from this article?  I zeroed-in on two quotes from industry leaders:

• “As I’ve talked to our MCAA affiliates, I’ve said [energy savings retrofits] is the industry that we should own.  While we are going through this slow period, now is the time to renew ourselves and focus on green and sustainable initiatives. MCAA President Bob Armistead is taking the same charge and pushing it forward.” - Lonnie Coleman, president of Coleman-Spohn Corp., Cleveland, and past president of the Mechanical Contractors Association of America.
• “We’ll focus our energy on where the work is.  We’ll get in front of customers with good energy-saving ideas on how to take cost out of their businesses.” – Tony Guzzi, President and COO of EMCOR Group.

Could be just me, but I think they’re saying that energy savings is where it’s at for contractors right now.  So, there’s the bright spot and it is bright indeed.  The vast majority of buildings that are going to be here in 20-25 years are here now.  Retrofitting those buildings to new standards of energy efficiency, and driving down their operating costs, is THE opportunity for contractors.  Lonnie Coleman is right – contractors should own this business.

Image courtesy of Blue Ridge Blue Collar Girl blog

New York is definitely where its at these days, what with those mandatory benchmarking laws swinging into effect and the Empire State Building’s and sustainable upgrades showing folks how it’s done.

Rep. Carolyn Maloney (D-NY) posted a byline in the Huffington Post on the iconic spire (did you know it is officially a Wonder of the World?), outlining the genius of the Empire State Building’s overhaul:

“…the retrofit will deliver improved windows, high-efficiency light bulbs, and among many other things, renovated heating and cooling systems at a cost of $13 million after netting out other savings. By 2013, this plan will have reduced the Empire State Building’s energy usage by 40%. The $4.4 million in annual energy savings will have completely paid for the costs of the retrofit project 3 years after completion.”

The story behind the retrofits is told at the Empire State Building sustainability exhibit, where a glowing cube and other interactive elements beckon visitors to look underneath the landmark at the energy saving innovations beneath.

Right now, the Empire State Building consumes the energy equivalent of 40,000 single-family homes.

Rep. Maloney writes about how she convened a hearing to learn more about the Empire State Building’s energy efficiency progress. She emerged learning a few things, one of them being,

“…government has a role to play in shining a spotlight on the economic, environmental and consumer benefits of retrofits, but it is the private and non-profit sectors that will roll up their sleeves, nail down the economics and make these retrofits happen.”

Across the Empire State, buildings are smartening up, with no little thanks to OptimumEnergy. The Sun-Herald.com picked up this press release from OptimumEnergy, maker of software to increase energy efficiency through HVAC, which trumpets the company’s latest New York state deals (including the 1271 Avenue of the Americas building in New York City; a GE Healthcare manufacturing facility in Troy; and Westfield Group’s Sunrise shopping center in Massapequa). OptimumEnergy estimates its reduction software to save 9.9M kWh annually across the building portfolio.

In honor of that The Building Advisor offers you this break from our regularly scheduled programming.

“Empire State of Mind”

In other news this week, EarthTechling decided to accentuate the negative in its coverage of the recent report from Pike Research, “Commercial Green Retrofit Interest Low.” Yes, they do point out the $41.1 billion potential savings from retrofits for new construction over the next 10 years. On the downside, nobody cares, apparently.

New York will fix that!

Images courtesy Doobybrain.com, Inhabitat and YouTube.

Summer must be here because it’s even hot in Oregon. All over the country, HVAC technicians are working their fannies off to keep tenants cool.

And news of worldwide efforts to increase energy efficiency in commercial buildings keeps rolling like sweat down an AC technician’s temple. Such as Australia’s Labor Party announcing that it will offer a 50% tax deduction bonus for “green building work” from July 1, 2011 completed for buildings of two stars or less to bring them up to four stars or higher. This from The Fifth Estate, which called the energy efficiency sector “his consistently touted as offering the cheapest and fastest route to greenhouse gas reduction” and quoting the Labor Party’s web site estimate that the incentive will offer a $1 billion boost over the life of the scheme.

Last week Pike Research issued a report estimating that a full $41.1 billion could be saved in energy expenses every year by instituting a 10-year retrofit program, Environmental Leader reported and BEPN picked up. Pike’s report states that more than 80% of commercial buildings in the US are over 10 years old, and a 10-year retrofit program would cost only $22.5 billion. That’s almost a 50% profit margin – not a bad bet.

Last week, ASHRAE President Lynn G. Bellenger testified on optimizing federal building efficiency before the U.S. House Subcommittee on Government Management, Organization and Procurement to help them examine the federal government’s role in greening buildings.

And The Building Advisor’s poster child of the week award for asset stewardship goes to Brandywine Realty Trust, a REIT that owns, develops, and manages commercial buildings. It earned two U.S. Environmental Protection Agency (EPA) Energy Star labels for its 5 Greentree Centre, Marlton, New Jersey project and its Concord Airport Plaza – a project in Concord, California. Although both buildings had previously earned Energy Star ratings, they were re-commissioned and re-certified again for 2010, according to a press release.

Bring it on, Summer of 2010! BuildingAdvice is ready when you are. And if you’re into coil cleaning, take a deep dive with Green Life Style Magazine’s “Huge energy savings in your commercial HVAC” post. It’ll make you want to get into parts of your air conditioner you never knew you had.

Check out this article in GreenerBuildings on the amount of waste in commercial buildings. Its somewhat baroque yet applicable metaphor likens building operation waste through car-terms, like “commuting solo every day to work in an RV purchased for that once-a-year camping trip.”

The Building Advisor’s favorite part?

“…ICF International estimated that if every commercial building owner in the U.S. did an energy audit of their buildings, it would take 1,000 auditors more than 13 years, working 365 days per year, to deliver recommendations on upgrades for 5 million buildings.”

Hey speaking of, if you missed yesterday’s free webinar, “Energize Your Service and Retrofit Sales,” you can get recordings and slides from the webinar here. And it’s only the first of a three part series – you can still get in on our July 29 and August 5 sessions 10am ET / 1pm PT.

Final reminder that our next free webinar series, “Energize Your Service and Retrofit Sales,” starts tomorrow. This three-part series offers HVAC contractors concise sales strategy on using BuildingAdvice to build business. You can register in under 1 minute here.  Topics include:

Part 1: Use Energy Services to Ensure Maintenance Agreement Renewals

Thursday, July 22, 2010 1:00pm Eastern (10:00am Pacific)

Understanding your service business metrics. What are energy services and how do they fit into a planned maintenance program? What to do in advance of your service renewal date. Meeting with your client prior to next service date anniversary. Qualifying your customers’ interest with automated ENERGY STAR™ benchmarking. Adding energy services to existing service agreements.

Part 2: Winning New Service Business With Energy as the Differentiator

Thursday, July 29, 2010 1:00pm Eastern (10:00am Pacific)

Sales management: getting your team ready. Targeting prospects who you can help with your energy services. Getting a meeting with the right person. Successful prospect meetings. Qualifying prospects up-front with energy benchmarking. Selling an energy assessment. Writing winning proposals.

Part 3: Use Energy Services to Drive Project Revenue

Thursday, August 5, 2010 1:00pm Eastern (10:00am Pacific)

Targeting the right accounts and the discovery meeting. How to ensure retrofits continue to drive savings. Monitoring and verification. Selling an energy audit, closing retrofits using the audit report and partnering with your local utility.

If you’re considering adding energy management to your company’s service offerings or are looking to improve an existing energy service offering, start with this educational series on starting an energy management conversation and building valuable client relationships through a focus on energy cost savings. Register for free here.

How has BuildingAdvice helped other contractors? Read MacDonald-Miller Finds BuildingAdvice Perfect Fit for Energy Efficiency in Small to Midsize Buildings.