Make Utility Incentives Part of the Energy Upgrades Planning Process
Second of a two-part article explaining the detailed process of planning and executing an energy efficiency project.
Installation costs shown in an audit should be net of available rebates or other financial incentives, or else list them separately. While many programs buy down the cost of an upgrade by 30 percent or less, a few exist that pay as high as 70 percent of total cost. In most states, utilities manage the program, though a few states have agencies that do so. A good starting point to find them is the DOE’s national Database of State Incentives for Renewables & Efficiency, but be sure to check details with your utility (and, if one exists, your state energy office); programs often change.
Incentives may also be structured differently: Some may be direct payments while others work through tax credits. Think through how the revenue may impact your firm’s financial position. Is it, for example, taxable as income?
Be sure to carefully read the eligibility and other rules in rebate applications. Programs may require prior and post inspections, involve additional commitments (such as reporting), and possibly higher labor rates. Project scheduling may also be impacted by paperwork delays. It is best to apply early, and there’s typically no penalty for later withdrawing an application (e.g., due to a change in business or facility operations).
Exercise care when altering a preferred design to maximize a one-time rebate. If cutting lighting wattage too much results in discomfort for occupants, even a very small loss of employee productivity could cost more than years of energy savings.
While it may be easiest to install a more efficient version of whatever already exists, doing so may leave money on the table. A one-for-one replacement of 32-watt fluorescent T8 lamps with 18-watt tubular LEDs with the same lumen output will cut kWh and kW, but does the task being illuminated still need the same light level as before? A classroom converted to a computer lounge may not, for example, require 40 foot-candles.
Many energy technologies have advanced significantly since the original equipment was installed. Making the easiest choice may miss additional savings opportunities. For example, many utilities now offer demand-response programs that pay customers to allow them to request temporary load reductions. Doing so, however, may require more sophisticated equipment. In our lighting upgrade scenario, that could include demand response ballasts that slowly dim lamps by 30 percent (so occupants are unaware of the slight reduction). If ballasts are already being replaced as part of an upgrade, the incremental cost of demand-response-capable units may net extra dollar savings.
For HVAC upgrades, consideration should be given during the design phase to options that significantly alter how heating and cooling is distributed. While total cost may be larger than in-kind replacement, annual savings may be much larger, thus maintaining (or bettering) the allowable rate-of-return or payback period. Use of chilled beams and a dedicated outside air system, for example, may cost more to install than merely replacing rooftop air handlers, but may yield greater savings in several ways, e.g., lower fan and pumping energy, reduced duct leakage, and tighter temperature control.
Commission the upgrade
Most upgrades, especially where controls are involved, need to be independently checked to ensure they are working as planned. Many facilities have found, sometimes years later, that sensors were never properly calibrated, or timing systems were not shutting off units at night, all resulting in lost savings.
A lack of occupant complaints about an upgraded system does not mean it is working properly. Even an occupancy sensor may fail to save much if its cycle time is too long, or its sensitivity set too high to shut off lights when not needed. Professional commissioning may add 5 percent or more to the cost of an upgrade, but is money well spent that should be part of a project’s base budget.
For HVAC upgrades, many details may go unchecked unless occupants complain due to physical discomfort. Stories abound regarding expensive systems that were installed that ended up with simultaneous heating and cooling, variable speed drives stuck on full speed, and pricey energy management systems that raised (instead of lowering) energy bills.
Measure and verify results
How will you confirm the savings you promised to the C-suite? How was the original usage measured so that a reduction can be calculated from new usage data? Using only the electric bill for an entire building is asking for trouble: too many other unrelated changes may occur simultaneously that could mask (or exaggerate) savings from your upgrade. In one case, a lighting upgrade in a hospital appeared to yield no savings on monthly electric bills.
Simultaneous with the lighting upgrade, some hefty medical equipment had been installed whose own electric load nearly cancelled the lighting savings. Only when before-and-after data from a meter measuring usage on the main light feeder was reviewed did the savings from the lighting upgrade become clear.
Several economical ways exist to perform measurement and verification. Before making any changes to a system, sequester its usage by using a clamp-on data logger or other device that does not interrupt power flow. When motion sensors are involved, a before-and-after sampling using lighting loggers may provide proof of reduced burn hours. Light meters may be used to sample before-and-after foot-candle readings.
Similar methods exist for determining savings for other types of upgrades (e.g., adjusted degree-days for savings from a night setback thermostat). For all projects, define in the contract how measurement and verification will be done. Standard procedures exist for all types of upgrades: Check out the resources offered by the Efficiency Valuation Organization, which manages the International Performance on Measurement and Verification Protocol (IPMVP).
Every activity sets the stage for those that follow. A clear and concise executive summary of what was done, what it cost, and what is being saved (both energy and labor) should fit on one page. Its brevity will be appreciated by busy managers. If appropriate, include a short survey (or testimonials) of occupants to demonstrate acceptability of the work and changes.
EPA’s Energy Star program offers ways to recognize successful energy projects. A plaque, award, or photo showing receipt of a commendation, may also enhance the stature of the work and provide positive PR exposure for the facility. A little bit of effort at the end of a project may go a long way to ensuring future support for other energy efficiency successes.
Lindsay Audin, CEM, LEED AP, CEP, is president of EnergyWiz, an energy consulting firm based in Croton, N.Y. He is a contributing editor for Building Operating Management.
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