2 FM quick reads on Utility incentives
1. Two Types Of Utility Incentives Can Help Optimize HVAC, Other Energy Use
Today's tip from Building Operating Management comes from David P. Callan and Kyle Hendricks of Environmental Systems Design: Two types of incentives can help optimize energy use by the HVAC system, as well as other building systems.
The two types of utility incentives offered for commercial buildings are service incentives and cash incentives. With the service incentive, the utility company pays an engineering firm or other service provider directly for their technical services, such as retro-commissioning or energy assessment. The incentives range any-where from 100 percent of services in cities like Chicago to 50 percent of services in others like New York.
In the case of the cash incentive, the utility provides the commercial building owner with a check based on the size or energy impact of the installation of energy efficient equipment.
Obtaining a utility incentive means working with the utility company or their corporate liaison hired to administer the program, or working directly with an industry professional, such as a consulting engineer, contractor or energy efficiency firm that is an approved provider with the sponsor utility.
Some utility programs offer incentives for retrocommissioning of existing buildings. Those incentives can help justify the cost of retrocommissioning. But retrocommissioning on its own often has a strong economic justification, even without incentives, as does commissioning of new buildings. A study by the Lawrence Berkeley National Laboratory found that:
- The median whole-building energy savings from commissioning is 16 percent in existing buildings and 13 percent in new buildings.
- The median payback time is 1.1 years in existing buildings and 4.2 years in new buildings.
- Projects with a comprehensive approach to commissioning attained nearly twice the overall median level of savings, and five times the savings of projects with a constrained approach.
This has been a Building Operating Management Tip of the Day.
2. Utility Incentives Can Help Cover the Cost of Retrocommissioning
Today's tip: Look to electric utilities for incentives that can help cover the cost of retrocommissioning.
Retrocommissioning is a cost effective way to trim energy costs and improve building system performance. According to Lawrence Berkeley National Laboratory, the median payback time for a retrocommissioning project is slightly more than one year. In other words, the return on investment is nearly 100 percent.
But even an ROI like that may not be enough to win funds to conduct retrocommissioning. At an average cost of thirty cents per square foot, the price tag for a 100,000 square foot building is $30,000.
One way to reduce that cost and improve the chances for project approval is with utility incentives. In some states - notably California — utility incentives have been available to help cover the cost of commissioning. Other states that have offered utility incentives include Colorado, Minnesota, New York and Texas. For utilities the benefit is very simple: By reducing the amount of energy used by a facility, retrocommissioning offers a very cost-effective way to cut the demand on the utility infrastructure.
The retrocommissioning incentives are one element of the growing effort by many utilities to reduce electric consumption among commercial and institutional customers. Those incentives peaked during the 1990s, then dropped sharply as the electric industry deregulated. Since then, however, incentive programs and associated dollars have climbed steadily.
A federally funded website is one way to find out if your local utility offers an incentive for retrocommissioning. The U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy funds a national program called the Database of State Incentives for Renewables and Efficiency - DSIRE, for short. Go to the organization's website, www.dsireusa.org, and click on the state or U.S. Territory to see a list of utility programs in that area.
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