Energy

Sustainability Could Use a Nudge

August 26, 2010 – 8:09 am

We might all wish for a genie in a bottle or a magic wand to resolve the climate crisis, but Harry Potter sequels notwithstanding, casting spells is unlikely to extricate us from this mess.  That said, the NRDC and Garrison Institute Climate, Mind and Behavior Symposium have suggested that simple “no” and “low” cost behavioral changes could reduce the United States’ carbon emissions by a full 15%!

Whether we are conscious of it or not, much of our consumptive behavior is affected by choice architecture, or how choices are presented to us.  As examples, marketers make cereal packaging bright, certain brands are placed at eye level and candy is placed near the checkout stand. In a study published in Science, Hunt Allcott and Sendhil Mullainathan assert that energy efficiency is not only a matter of technology but of behavior as well. They believe efforts to affect behavior through price changes and information disclosure can be cost-effectively supplemented with behavioral interventions.

Two ideas that have worked quite well – at a reasonable cost while generating tremendous savings – have been utility bill nudges that inform consumers of their utility consumption vis-a-vis their neighbors’.  Recently the city of Antwerp uploaded a government sponsored thermographic view of the city that revealed the energy efficiency of every building, ranging from an energy efficient blue to an energy hog red.  Residents were able to go online and compare their home’s energy efficiency to that of their neighbors.  The imaging was part of a larger effort to encourage homeowners and businesses to “investigate energy efficiency”.  The agency exceeded its goal of insulating 1000 homes during the first year by 20%.  Typical of people’s responses was: ‘We want [our house] to be as blue as the neighbors’.

According to Marc Gunther, studies show 90% of Americans think something should be done about global warming but only 10-12% have acted on that belief.  How can we overcome the wide disparity between belief and action?  Part of the issue with motivating people to act is the overwhelming nature of climate change.  So where should we begin?

A useful guide produced by The Climate Leadership Initiative suggests discussion begin by talking about climate change as the ‘climate crisis’ or ‘climate failure’ rather than as ’global warming’.  Apparently the term ‘global warming’ doesn’t spur people to action, so we need to use words that pack a greater emotional charge.

Next, we can focus on the effects of too much carbon in the atmosphere caused by burning fossil fuels and emphasize the need for carbon-free energy sources.  Of course there are other gases that contribute to the climate crisis, but carbon is the big one.  Remind others that the problem will only get worse and be more expensive to fix if we wait, and present an understandable analogy like ignoring termites until they are munching on a home foundation.

Point out that shifting from a carbon-dependent to a carbon-free economy will create millions of jobs, enhance our national security, reduce our dependence on foreign oil, improve our quality of life and it might tap into the American spirit of innovation and leadership.

If you are thinking about starting a sustainability program of any kind – whether it is based in your office, home, apartment building or company - remember even though 90% of our fellow Americans may think something should be done, we each will have our own thoughts about how best to begin.  Anyone who is interested should be allowed or invited to take part with the understanding that every person’s ideas will be respected, if not immediately acted upon.  I cannot emphasize strongly enough how important it is to wear a smile and have a sense of humor.  Think of yourself as a cheerleader for the effort and keep cheering even when you’re in the defensive zone!

Generally speaking, people tend to be overloaded with information and with their own ‘to do’ lists.  Within your organization or household, pick one or two things to focus on.  When you have those under control try a couple more.  Reward and reinforce desirable behaviors, but be patient. It can take six months to a year for changes to become permanent.

Other Articles of Interest:

Nudge: Improving Decisions About Health, Wealth and Happiness

NAA 2010 Green: Lower the Flow

NAA 2010 Green: Efficiency Is A Fuduciary Duty

 

By Kimberly Madrigal | Tagged , , , , , , , , , | Comments (0)

Grooming Post Recession Energy Habits

August 17, 2010 – 8:00 am

The U.S. Energy Information Administration (EIA), organized as part of the Department of Energy, released its annual energy outlook for 2010, which had a surprisingly upbeat tone.  In fact, here is a passage on human consumption that summarizes  their projections for the next 25 years:

Energy consumption per person has declined sharply during the recent economic recession, and the 2009 level of 310 million Btu per person was the lowest since 1968. In the AEO2010 Reference case, energy use per capita increases slightly as the economy rebounds, then begins declining in 2013 as higher efficiency standards for vehicles and lighting begin to take effect. From 2013 to 2035, energy use per capita declines by 0.3 percent per year on average, to 293 million Btu in 2035.

No recession is pretty, but the very deep recession we are now experiencing just might be powerful enough to change some of our consumption habits permanently. Although our motivation  may have started on a dark note, there is hope that these improved living habits will stick.  The real challenge, of course, will be when the economy improves.  With the current makeup of industries, innovation and the Internet, we should be able to reduce our energy consumption even more effectively.  According to the EIA, growth in U.S. energy use is linked to “increases in demand for housing, commercial floorspace, transportation, manufacturing, and services”, all fueled by population growth.  Unfortunately, our consumerism is not selective.  It is also evident in our energy and water habits.

The majority of our economy is service-based which means we do not produce much in the way of goods ourselves. When we compare the gross domestic output of recent years a trend emerges.  It is carried through by the EIA into their 2035 projections.

In 1990:

  • 74 percent of the total value of output came from services,
  • 6 percent from energy intensive manufacturing industries,
  • 20 percent from non-energy-intensive manufacturing industries (e.g., agriculture, mining, and construction)

By contrast, in 2008:

  • Services accounted for 78 percent of total output
  • Energy-intensive manufacturing was 5 percent.

Projections for 2035 output expect:

  • Services will account for 82 percent of total output
  • Energy-intensive manufacturing will account for less than 4 percent.

How will consumers behave in the future?  Sadly, the government’s projections do not give us much credit.  All of the energy savings projected after the recession ends are based on improved fuel and energy efficiencies, not consumer behavior.  Our pocketbooks may soon allow us to waste again, but do we really want to do that? If you are interested in the full Annual Energy Outlook, you can find the pdf file here.

Other articles of interest:

How to Improve Your Fahrenheit Factor

The Technical Aspects of Comfort Control

The EPA and Multifamily Mid-rise and Highrise

http://greenlandlady.com/site/business/the-epa-multifamily-mid-rise-highrise/

By Elizabeth Madrigal | Tagged , , , , , , , , , , , , , | Comments (2)

Going Green During Those Dog Days of Summer

July 27, 2010 – 6:30 am

Regardless of your position on climate change or the whole green movement, going green means savings to the property owner and the renter; therefore, a partnership between the property owner and resident is very important.  The property manager or owner needs to provide education and an energy efficient living space and the renter needs to use the space wisely.

Efficient living spaces will give the property an edge over other rentals. Working with residents to reduce a property’s environmental impact will help to reduce operating expenses, keep utility bills low for the renter and help save Mother Earth for future generations.  Here are some ‘Going Green’ tips for the dog days of summer so we can stay cool and still save some green.

Dusty air conditioning filters reduce air flow.  Examine filters monthly  and keep a supply on hand.  Better yet, furnish the property with a reusable filter, which can be easily cleaned by vacuuming out or rinsing in water.  Tenants often are happy to change them and everyone can save up to 15% on their electric bill.  If you allow residents to do basic maintenance, be sure to provide them with a manual or some other type of education.

There are many ways to lower energy use that are low  and no cost but they do require modest changes in behavior.  For example, a key to reducing air conditioning costs during hot summer days is to limit the amount of heat generated during the day when temperatures are at their highest.  This can be accomplished in a number of ways.

  • Keep lights off when rooms are not in use.  Lights generate heat which means your air conditioner will have to work harder to keep the place cool.
  • Green renters will want to wash and dry clothes, iron and cook in the morning or later in the evening.
  • Use microwave ovens and patio barbecues for cooking.
  • Be sure to have ceiling fans available in all the rooms.  The air movement helps air circulation and makes it feel cooler without having to lower the thermostat.
  • Encourage residents to set the thermostat to 78°.  This may seem high, but when combined with a fan is quite tolerable.

Also remember to set the temperature in the common areas to 78°.  Just by setting the thermostat down to 72° from 78° increases cooling costs by as much as 45%.  Remind residents to turn the thermostat up or off when they are not home and back down to be more comfortable at night.  Better yet, install a digital thermostat that can be programmed once and never think about it again.

Your staff and tenants may appreciate a gentle reminder not to position heat-producing appliances, such as televisions or lamps, near the thermostat. The heat from the appliances causes the thermostat to read high and causes the air conditioner to run longer than necessary.

Resident comfort will also be enhanced if you install louvers or awnings on the outside of the windows to keep sun out of the units.  Indoors it is up to residents to draw draperies, blinds, or shades to keep things cool.  Keeping storm windows closed is also like having another layer of insulation on your windows in summer or winter.

Insulation is not only about making sure your attic has some pink stuff, it’s about making sure that you save “green”.  When you insulate, make sure that there is insulation in the ceiling rafters, crawl spaces, basement walls and floors and exterior walls, if possible.  Insulating inside walls around light switches and wall receptacles will provide big savings because it stops air leaks. Make sure that building air conditioning vents are also well-insulated and sealed.  Make sure that doors and windows have weather stripping. By the way, if you see daylight around your doors and windows, then you are wasting energy.

As you can see, green property management is truly a partnership between the property owner and the resident.  Keeping cool with these tips will help renters to reduce their utility bills through decreased energy consumption.  Proper care and maintenance of all HVAC equipment will benefit owners as it helps ensure longer systems life.

With education everyone wins. . . owner, resident, and Mother Earth.  That is what Going Green is all about.

This is a Guest Post by A. W. Warner.  He  is the Owner of AW Warner Management, located in Palm City, Florida. Warner has thirty-five years experience in managing multiple properties both in domestic and international markets.  AW Warner Management is a team of professionals, members of the Institute of Real Estate Management and wants to be part of saving Mother Earth for our children and our children’s children.   A portion of all of our profits goes to the American Cancer Society. www.awwarner-management.com

By Kimberly Madrigal | Tagged , , , , , , , , , , , , , , | Comments (0)

A Coffee Break Confession

July 23, 2010 – 6:43 am

Today I dumped a pound of carbon into the atmosphere without even thinking about it.  I didn’t mean to.  I got distracted and left the coffee maker on for an hour.  It’s that simple.  Most of us wouldn’t think of leaving a coffee pot on as an act of pollution, but it is when we’re careless or ignorant of the ramifications of our energy consumption.

Technology can only take us so far.  We will have to change our behavior as well.  At the National Apartment Association Educational Sessions, three eminent and committed multifamily professionals agreed that you need to have committed leadership to get a sustainability program off the ground.  I don’t necessarily disagree, but I will say this:

YOU need to be committed.  If you’re a parent, then you need to show your commitment every day in every way.  Not only because this will help ensure a healthy environment in which your children can grow and thrive, but also because it’s you duty as a parent to prepare your children for the future.  They need to know the simple things like not to leave the coffee pot on and to use a carafe!

YOU need to take that commitment to work with you and be an example for your co-workers.  Will you annoy them? Probably. Sometimes.  But if you can maintain a sense of humor about things, they may eventually come around.

In the meantime, you can contribute a carafe to the break room, bring your own utensils and coffee mug and strategize about how to start a sustainability committee.

UPDATE:

Upon receiving my monthly utility bill, I can conclusively and unequivocally state that the simple act of consistently using a coffee carafe instead of allowing the coffee pot to sit on the warmer, reduced energy consumption by 4%!  In addition, I saved at least 60 pounds of carbon from entering the atmosphere, even with my one distracted morning!

Other articles of interest:

By Kimberly Madrigal | Tagged , , , , | Comments (2)

NAA 2010: Reducing Multifamily’s Carbon Footprint

July 22, 2010 – 7:00 am

At the 2010 National Apartment Association Education Summit, Dimitris Kapsis of American Utility Management and Louis Schotsky of Equity Residential presented a seminar titled, ‘Reducing Your Property’s Carbon Footprint’.

The term carbon footprint is used to express the total set of greenhouse gas emissions (GHGs) caused by an activity, organization,  event or person. To make things simple, the term standardizes the measurement of these emissions by expressing them in terms of carbon dioxide emitted, or its equivalent of other GHGs.

The majority of energy used in commercial and multifamily buildings is for heating, lighting, ventilation and air conditioning (HVAC).  Domestic water heating – which includes household needs and outdoor sources like pools and spas – also comprises a good percentage of building electrical consumption.

Schotsky and Kapsis indicated that the three main ways to reduce a commercial property’s carbon footprint are energy efficiency or conservation, purchasing Renewable Energy Credits (RECs) and developing on-site generating capacity.

They suggested that managers research their needs before an emergency and then focus their attention on the following as budgets allow:

  • Preventative maintenance including cleaning coils, changing filters regularly and maintenance of motors
  • Gear equipment upgrades toward high efficiency factors
  • Stage boiler times
  • Insulate all accessible piping
  • Adjust thermostats according to time of day and day of week
  • Install an Energy Management Control System – Equity Residential has developed their own in conjunction with AUM
  • Reduce domestic hot water temperatures
  • Take advantage of free cooling

The presenters also recommended a lighting evaluation of the property be performed.  Items to consider are over-lighting and under-lighting, lighting run times and light fixture efficiency. In addition to installing CFLs, LEDs and solar powered lights to replace incandescents, a multifamily lighting retrofit should include an investment in timers, motion and daylight sensors.  These measures help shave additional kilowatts off your bill, cut back on maintenance requirements (longer lives of higher efficiency lamps) and reduce greenhouse gas emissions.

Have a pool?  Where municipal regulations allow, cover it.  Reduce the water temperature to 78° and seriously consider installing a solar pool heater.  Although these small changes seem insignificant, a TIAA-CREF case study revealed one property achieved an annual savings of $14,000 just by reducing the pool temperature from 82 to 78°!

Beyond the immediate utility savings, reducing your asset’s carbon footprint may have a  positive affect on its resale and long term value, particularly as the cost of grid-produced power escalates.  Green property management professionals may also want to consider purchasing RECs or investing in a program of on-site generation in the form of solar, wind, geothermal or fuel cell technology. (There are many government credit and tax incentives, rebates and private grants available to finance a portion of these systems.)

There has not been a a great deal of emphasis on the concept of carbon reduction in multifamily, but the same steps suggested for energy reduction and water conservation will reduce greenhouse gas emissions.  In addition to lowering the expenses of managing the property, these practices will help green property managers proactively address the climate crisis.

Guest post by Monica Jean, a student at Columbia University in New York City.  She enjoys writing and wants to make the global community greener.

Related articles:

By Kimberly Madrigal | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , | Comments (0)

NAA 2010 Green: Efficiency Is a Fiduciary Duty

July 20, 2010 – 7:30 am

The theme behind the “green” property management track at the National Apartment Association 2010 Education Conference seemed to be benchmark, benchmark, benchmark then reduce, reduce, reduce = $ave, $ave, $ave!

The EPA’s Alyssa Quarforth reminded participants that utilities are the largest controllable cost, whether the property is master or directly-metered and that, among other things, benchmarking your assets through Portfolio Manager enables property managers to:

  • Make more informed decisions
  • Identify under-performing assets
  • Set investment priorities
  • Assess effectiveness of operations practices
  • Track water consumption and costs

Improving energy efficiency can:

  • Increase net operating income
  • Raise asset value
  • Provide a cushion against rising utility rates
  • Keep your properties ahead of the curve with regard to legislation, competition and public demand

Scott Anderson, Director of Asset Management for TIAA-CREF Global Real Estate, offered a brief, yet compelling account of what can be achieved through benchmarking using Portfolio Manager and then instituting energy and water conservation measures.

Case Study #1: Garden Style, Phoenix, AZ

  • Reducing the pool temperature from 82-78° saved $14,000/year
  • Used CFLs and lighting controls such as motion sensors
  • Where possible, installed programmable thermostats in common areas, leasing offices and model units
  • Trained staff to look for inefficiencies

RESULT: 28% reduction in common area energy consumption
ANNUAL SAVINGS: over $50,000!!!

Case Study #2: High Rise, Chicago, IL

  • Common area thermostats set 5° higher during the summer months
  • Vacant units left unconditioned (no A/C)
  • All staff trained to look for inefficiencies such as lights being left on

RESULT: 13% reduction in common area energy consumption
ANNUAL SAVINGS: over $60,000!!!

The managers of TIAA-CREF’s portfolio feel it is their fiduciary duty to operate their buildings as efficiently as possible.  Think about that: their fiduciary duty.

Other Articles of Interest:

By Kimberly Madrigal | Tagged , , , , , , , , , , , , , , , , , , , , , , , , | Comments (4)

UTC’s Fuel Cell Miracle Breakthrough

July 9, 2010 – 6:35 am

Fuel Cell Arrival at 360 State Street

Erik Robie, UTC Power’s Regional Manager of Sales, would most likely prefer I downplay the ‘miracle’ tone of this article, but that’s not possible. He played a pivotal role in the largest installation of a residential fuel cell in the world, and that will have a huge impact on clean energy production.  Sorry, Erik, but that’s big news.

It’s not every day I get to chat with hotshot engineering types, so I took advantage of the opportunity when Robie returned my call. He had just stepped off a plane in San Francisco and had an authentic quality about him that made me like him immediately. But frankly, what I really wanted to know was how to sell a power system worth over a million dollars to a very savvy developer. Did I mention this application in commercial residential use had never been tried before?

Erik Robie, UTC Power

For  background, installing fuel cell power in 360 State Street – a mixed-use development in New Haven, Connecticut, with 500 residential apartments - didn’t happen overnight. However, it may forever enshrine the developer, Bruce Becker, and UTC Power’s Erik Robie in that land called, “Darn, why didn’t we think of that?”

Certainly the development’s project has no competition in New Haven or anywhere else. The mixed-use development has been lauded by government officials, sustainability advocates and the broader community. Green building people will be drooling over 360 State - which is in pursuit of a LEED Platinum certification under USGBC’s pilot neighborhood development program – for some time to come.  To give you an idea, 360 has so many smart growth and energy efficiencies, their media people sent me the project’s LEED score card for reference.

Most existing building stock is old in New Haven, which has an historically low 1% vacancy factor for multifamily. Within the eco-delirium surrounding this project an excerpt from the developer’s press release actually seems somewhat humble:

“With its break-through utilization of fuel cell power and range of efficiency measures, 360 State has become a new green building model not only for Connecticut, but also for the multifamily housing world.”

Becker is not exaggerating even a tiny bit, as the 400 kW fuel cell power source located on-site is an innovative and exciting application of clean energy technology within a large-scale multifamily development and certainly has been ground-breaking.

GLL: Thanks, Erik, for taking the time to talk with us. Can we start with how and when the 360 State Street project first got started?

ROBIE: Well, it was about 2007 when we got the initial inquiry from the developer, Bruce Becker, and he was really ahead of the curve. His team was investigating alternative technologies and new innovative systems for his project. They were particularly interested in looking at the economics over that first year we were in contact. We’ve been installing fuel cells since 1991, and out of 270 systems, many were commercial uses like Verizon’s 300,000 square foot call-routing center in Garden City, Long Island, Whole Foods Market stores in Connecticut and Massachusetts and a Connecticut Cabela’s store.

GLL: Fuel cells have been around for a couple of decades, which makes me wonder why they had not been used for these large residential purposes before.

ROBIE: First there was a challenge doing a residential installation largely because of utility regulations. Sub-metering in Connecticut and several other states has not been permitted. That hasn’t changed in Connecticut yet, but Bruce is working with regulators hoping to make progress. Another issue is that a fuel cell needs a central hot water distribution system to tie into.  In the absence of a central system, it is very difficult and very expensive to retrofit this system. This is difficult to put into an existing building as it would require a bigger retrofit effort. And thirdly, there are less expensive and simpler systems “PTAC” with individual controls. Although they are not clean energy, we compete against these cheaper technologies.

GLL: So how did you overcome these issues with Becker & Becker?

ROBIE: Bruce [Becker]wanted to use a virtually pollution free system and was willing to work with us. He was also willing to change a few things in his design to accommodate the fuel cells’ requirements. In a new building these are relatively simple to do within the design and, as using the energy efficiently is critical to the economics of the system, the changes made sense.

GLL: Could you give us an example?

ROBIE: Well, Bruce designed the building to accommodate what we needed. For instance, he tied in the water source heat pump system and he made sure that the heat could be diverted to the pool as part of the system.  The cost most of the time for making a change was a small premium, but the payback for these changes was the ‘free heat’ by-product of the system.

GLL:  Before we go on, is there a simple way you can explain for our readers how a fuel cell works?

ROBIE: Sure. Actually, when I started at UTC Power six years ago, my job was pretty much education and really to explain, “This is what a fuel cell is” and “This is how it works.”  The easiest way to understand the technology is to think of a fuel cell as a big battery. It produces clean energy as there is no combustion in our process.

In a regular battery, the chemicals required for the electrical production are contained inside the battery and they eventually require re-charging. In a fuel cell, the chemicals, hydrogen and oxygen come from outside the cell, but the process is basically the same. The main difference is the system takes the chemicals from external sources, so there is no need to be re-charged. All we need is a natural gas pipeline, the same low-pressure line used in homes and businesses.

GLL:  Can you explain how the natural gas is used and how the system works?

ROBIE: We strip the hydrogen from the natural gas. The hydrogen is mixed with oxygen from the air and that electrochemical reaction produces the electricity on site. The heat by-products of the system are used to produce hot water, to heat pools and for space heating or air-conditioning in the building. The pure water that results is used in the production process, so nothing is wasted. The whole process is very efficient and, of course, the thermal heat by-products are free.

GLL: I understand that almost all of 360 State Street’s 500 residential units’ energy needs will be met by the system, but will the system produce any extra energy to sell to the grid?

ROBIE: Yes it will. Actually when 360’s fuel cell spins the meter backwards during off-peak times, it will sell that electricity to the utility at a retail, not a wholesale rate. Another big environmental system benefit is that the fuel cell is 85 percent to 90 percent efficient. The efficiency of the normal grid is only about 33%, which gives you a good point of reference.

GLL: The idea of independent energy production appeals to a Yankee like me for many reasons including national security, but these systems are not cheap to produce. How is the market responding to that and how are your clients financing these large installations?

ROBIE:  First of all, we expect the prices of these systems to come down and there are a lot of engineers working on making that happen within our company and that of our two major competitors right now. In the meantime, UTC Power is focusing on its residential-use large-scale fuel cell installations in just five states: Connecticut, Massachusetts, New York, New Jersey and California. These states have access to natural gas and state funding for alternative energy systems which, when combined with the other federal incentives and available grants, make the cost sufficiently competitive.

GLL: 360 State Street expects its payback to occur in 5.5 years for the cost of the system, but they received grants and state and federal incentives that cut their upfront cost almost in half. Is this typical for this kind of clean energy system?

ROBIE: The payback for the fuel cell production system without government incentives and grants averages about ten years. When available grants and state and federal incentives are used, the payback is essentially halved.  Without that assistance, even though it is a renewable power source and has so many other benefits, the fuel cell cannot compete against the standard fossil fuel system.

GLL: Who are your main competitors and are they pursuing large residential installations?

ROBIE: We do have competition, but there are only two other major fuel cell manufacturers: FuelCell Energy of Connecticut and Bloom Energy, which is on the West Coast. As we developed the large residential installation, we are actually the only company pursuing that sector.

GLL: I understand that a fuel cell has no moving parts, so that maintenance is less cumbersome.

ROBIE: Well, actually, there are moving parts like simple fans but no major ones. The main benefit of the system is that it is an electrochemical reaction as opposed to a combustion process. This makes the entire operation virtually pollution-free. [Editor's Note: It is the burning of natural gas that causes greenhouse gas emissions and burning is not part of the fuel cell process.]

GLL:  A lot of property owners prefer their systems be managed by on-site staff. Would that work with a 400 kW fuel cell like the one you installed at 360 State Street?

ROBIE: Candidly, most people don’t want to be responsible for actual power generation and with our maintenance agreement they don’t need to be. UTC Power is responsible for all power generation and our service contract is bumper-to-bumper. Occasionally we have an on-site or highly skilled maintenance person who wants to see the workings of the cell. Once we take the panels off, it is not something most of them have ever seen. It is just good economics to allow us to service everything.

GLL: Obviously, a different system has unique maintenance requirements, so can you give us an example of what servicing entails?

ROBIE: UTC Power maintenance on-site is comprised of changing air filters, monitoring and testing within specified systems performance ranges and relatively clean tech work. We also remotely monitor and trouble shoot the system, which is pretty instantaneous and keeps things operating smoothly. The fuel cell system can run when the grid has failed, and that is one of the main reasons it has been so popular with commercial users like Verizon and other companies in which power is so critical to their businesses. Obviously, multifamily power accessibility is pretty critical as well.

GLL: Are there any more residential installations planned?

ROBIE: Large-scale residential use hadn’t really been on the radar screen, but now that one project is done, that has changed overnight. Of course, there are a lot of things that have to occur, like legislation that allows sub-metering, but multifamily has become a very attractive market for us.

GLL: What else would you like me to tell people about UTC Power’s fuel cell energy?

ROBIE: Not only does the fuel cell provide energy savings, but it is the cleanest 24/7 technology on the market today and will operate when the grid is down.

GLL: Are you as thrilled about 360 State Street as the rest of us are?

ROBIE: Actually, I am. That development is starting to educate people that these systems are commercially viable. They are cost effective, they are available and they are working. It’s good economics and good, clean, renewable power.

GLL: I think you said it all right there. Thanks so much for the education.

ROBIE: It was my pleasure.

Shortly after our conversation, it was announced by the Department of Energy (DOE) that UTC Power’s affiliate, United Technologies Research Center in East Hartford, Connecticut, would receive two of the DOE’s 12 awards in the category of, “Advanced Building Control Strategies, Communication and Information Technologies, for Net-Zero Energy Buildings”.  Of the total $22,497,833 total awarded in this category, UTC’s two projects will receive $1,866,627 (out of a total cost of $2,333,284) and $1,998, 766 (out of a total cost of $2,498,457) respectively.  As hydrogen/oxygen talk can get a little Star-Trekkie, (see below if you are interested in tech talk for geeks), it is important to emphasize that this is clean, combustionless, power-generating technology available wherever there is a natural gas supply.

Today’s cost of the fuel cell system is expensive when compared to the other conventional technologies - more than a million dollars for large systems like the 400 kW fuel cell installed in 360 State Street –  but incentives and grants can cut up to half the cost. The state and federal incentives that subsidize clean energy production are critical to market acceptance. Many emerging industries are given government assistance and this practice is not without precedence. In fact, it is interesting to note that fossil fuels are still subsized even today. In 2008 the global subsidy for fossil fuels was $557 billion, the last year for which figures are available.  This is an excerpt from the International Energy Agency’s statement on these subsidies:

“The IEA analysis has revealed that fossil fuel consumption subsidies amounted to $557 bn [billion] in 2008. This represents a big increase from $342 bn in 2007. Fluctuations in world prices, domestic pricing policy changes, and shifts in demand can all be responsible for year-to-year differences in subsidy estimates. Since 2008, a number of countries – including China, Russia, India and Indonesia – have made notable reforms to bring their domestic energy prices in line with world prices. These efforts are expected to contribute to a reduction in the cost of energy subsidies to these countries in 2009.”

In the full announcement, the IEA recommended a responsible phasing out of these subsidies in favor of clean, efficient energy subsidies.  GreenLandlady seconds that recommendation.

Contact Homer Purcell or Erik Robie at UTC Power at 360-900-POWER for more information on fuel cell technology for your large commercial or residential project. If you are interested the full technical explanation of fuel cell power, continue reading below:

FACTS FOR ENERGY GEEKS: A fuel cell is a renewable power source that uses an electrochemical process to combine hydrogen fuel and oxygen to produce electricity, heat and water.  The fuel cell is very clean technology even though it uses natural gas as a starting point. What keeps the energy produced clean is that the process merely strips the hydrogen out of the natural gas, but there is no burning of the gas.  This process can be summarized as follows:

  • The fuel processor reforms the fuel (natural gas) to hydrogen gas
  • The hydrogen gas feeds the fuel cell stack
  • Hydrogen gas and air are combined in a ‘magical’ electrochemical process
  • The process produces direct current (DC) power, pure water and heat
  • The byproduct water is used in the power plant operation
  • The DC power produced is conditioned to provide high quality alternating current (AC) power output
  • The usable heat is then redirected to create hot water, space heating, air conditioning and cooling

Fuel cells also operate without combustion making energy production virtually pollution free.  Although the cells use natural gas, because of the system’s high efficiency, they can extract a lot of energy from a small amount of fuel and produce a lot of electricity.  Although this is ground-breaking usage in multifamily, the total system efficiency of this kind of electricity production - including the residual thermal energy produced which gets used for space heating/cooling/conditioning, heating water and heating pools -  makes it a perfect match for residential use. (See UTC Power’s site for the entire technical explanation of how fuel cells work.)

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By Elizabeth Madrigal | Tagged , , , , , , , , , , , , , | Comments (0)

Utility Cost Takeout: A Model For Energy Efficiency

July 6, 2010 – 7:00 am

Benchmarking or measuring should be part of your plan.

At a recent meeting of the Los Angeles Chapter of the USGBC, I had the good fortune to hear Sean Delehanty describe the Utility Cost Takeout (UCT) strategy he’s developed for BAE Systems.  BAE Systems is a manufacturing facility and defense contractor, so it might not seem like apartment renters and multifamily property managers have much to learn from BAE, but ultimately green property management is green property management.

Sean has helped reduce energy consumption at BAE facilities by an astounding 38%, saving his division over a million dollars a year in utility expenses. Sean emphasized the need to understand your utility bill and benchmark your building as a critical first step.

Benchmarking was also emphasized at this year’s National Apartment Association Conference green education track.  As we’ve discussed before,  sustainable operations and management are a process and the energy efficiency process begins with benchmarking (measuring) and then auditing.

The Utility Cost Takeout Audit begins with basic building plans.  An auditor should start at one corner of the building and proceed all the way to the other end of it.  The audit includes the inside and outside of the building and when that has been fully inspected, the final step is an inspection of the roof.  The best auditors will use all five senses, going room by room and carefully noting lighting, signs, sounds of motors running and what’s plugged in and turned on.  A thorough audit will include an off-hours inspection as well. In a residential, commercial or mixed use building, it is often surprising what is left on that should have been turned off.

Once you establish which upgrades you want to pursue and in what order, contact your local utility. Arrange to meet with their sustainability officer or planner and discuss your plan and what rebates or programs may be available to assist you.  Although they don’t advertise it, many utilities have funds set aside for customized plans.  As a back-up, you may also want to check DSIRE, a searchable database by state for renewable energy and energy efficiency incentives of all kinds from utilities and federal and state governments. The incentives change and expire, so it is important to check frequently.  Once you decide on your system, it is also wise to move forward quickly.

Your local utility may also offer some invaluable insight into what other property owners have accomplished and what has been effective in your region.  It is important to remember that water is also an important aspect of the energy efficiency equation, because it requires energy to pump and heat it.

Utility prices increase an average of 6% a year.

In addition, remember that time is also a component of any energy efficiency plan and you may have to re-evaluate or reset timers to maximize energy reductions.  For example, if heating or cooling are required for your clubhouse or leasing office, consider not only the temperature setting but at what moment the building systems are set to turn on and off.  Can you shave off ten minutes or half an hour at the beginning or end of the day and still provide a comfortable environment for your residents and employees?  In my experience, people often balk at the idea of repeated 10 or 15 minute timer adjustments, thinking it doesn’t mean much in terms of dollars spent.  Those pennies add up over the course of a year and affect your net operating income, but as importantly, the greenhouse gases add up as well.

Because standard energy generation is quite inefficient, conservation outcomes have an amazing impact.  For example, a 1% savings by the end user translates into a 10% saving at the power plant.  This is one explanation why energy reduction seems to have an exponential effect on greenhouse gases.  Using less energy facilitates cumulative reductions all the way back to the  power plants and coal mines, making every watt saved a meaningful unit.

Technology, however, is only part of the solution. Behavior is the other and trickier part. Create a sustainability committee and empower your staff to generate ideas, follow up on proposals and reward accomplishments.  Most people want to help reduce greenhouse gas emissions, but they may not know how and change can be difficult.  Although the climate crisis is dire, the reality is that it takes time to implement any sustainability program, so be persistent, but also patient. In fact, I guarantee getting staff and residents on board with waste, water and energy reductions will lead to greater savings.

If you need assistance with auditing your multifamily assets, call us today.  We offer water and energy auditing services, including benchmarking to set you on that path to increased NOI and higher asset value.  We also offer management, staff and resident education programs tailored to further your specific goals.

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By Kimberly Madrigal | Tagged , , , , , , , , , , , , , , , , , , , , , | Comments (0)

Rental Market Outlook: The Elder Lease?

June 7, 2010 – 6:48 am

William Wheaton, Courtesy/William Wheaton

The  CBRE’s report on rental housing was released this spring and its positive outlook was hailed across the industry.

The report indicated the U.S. retail real estate sector was showing signs of improvement and that during the fourth quarter of 2009, “availability rates at neighborhood and community centers recorded the smallest quarterly increase since the end of 2007, ending the year at 12.4%.” CBRE Econometric Advisors now projects that availability will peak at 12.8% in the third quarter of this year.

“After the dismal conditions of the retail real estate market during the past two years there are signs of stabilization,” said Abigail Marks, Economist, CBRE-EA. “A slowing of negative absorption combined with a virtual halt in new construction, should build the foundation for positive activity by year’s end.”

While 2009 was one of the worst years on record for negative net absorption, more than 19 million sq. ft., the negative trend has been diminishing since peaking in [the first quarter of] 2009. In [the fourth quarter of] 2009 negative net absorption was -667,000 sq. ft. While 2010 will continue to see negative net absorption, conditions will turn positive in 2011.”

Rick Graf, Courtesy/NMHC

This is encouraging news for the short term, but it is helpful to understand which groups are producing these renters and whether this is a trend or a merely a phase.

At the 2010 National Multi Housing Council, several panelists attempted to answer that question. Rick Graf, president of Pinnacle,  the largest third-party real estate management company in the U.S., attributed some of the growth in the rental markets to the de-coupling of roommates. Graff admitted he had no data to explain the remainder.

Panel member, Christy Freeland of Riverstone Residential, attributed the increase to three sources: (1) Adult children moving out of their parents’ homes, (2) greater job security allowing parents to feel safer guaranteeing their children’s leases and  (3) the arrival of former commuters - no longer owning homes in the outskirts - newly willing to rent because rents are down.

William Wheaton, Principal at CBRE Econometric Advisors and Professor at the Massachusetts Institute of Technology (MIT), also predicted a bullish rental market for the next few years with an impending fizzle if one demographic isn’t addressed.  With so many aging Baby Boomers, the longer term prospects for the rental market wane.  An aging demographic points to more home ownership, which is a distinct disadvantage for multifamily.

Wheaton pointed out that as older people are more likely to own their homes, it is important to determine what could and would create an enticing rental alternative for them.  Taking into consideration that housing rates peak with 75-year-olds (the oldest boomers are in their middle sixties right now), he indicated the challenge is to gear up for these seniors quickly.  This class of people is ‘risk averse’, particularly with regard to anticipated rental increases, as most of them are on a fixed income.  The professor suggested a new form of ‘Elder Lease’ be created to address these concerns.  As a possible solution a five or ten year lease could have rental increases indexed to Social Security payments.

Certainly capturing a portion of the elder market would help to increase occupancy rates and reduce turnover.  It is also important to remember that a fully occupied building is a sustainable building, economically and environmentally.

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By Elizabeth Madrigal | Tagged , , , , , , , , , , , , , , , , | Comments (0)

PACE Yourself

May 26, 2010 – 7:30 am
$1.4 billion in venture capital flowed to solar companies in 2009 according to the Solar Energy Industries Association.  Although it is doubtful the U.S. can easily regain the lead in solar technology that it lost in the 1980’s, investors are telegraphing the news that solar energy’s time may be here.
The Solar Energy Industry Association (SEIA) couldn’t agree more. In fact, their 2009 annual review of the industry showed the U.S. solar energy industry grew - both in new installations and employment and solar electric capacity from photovoltaic (PV) and concentrating solar power (CSP) technologies  – to climb past 2,000 MW.
To give you an easier visual, that is enough power to serve more than 350,000, energy-hogging U.S. homes.  Although the numbers are still pretty small when compared to the entire U.S. energy market, a doubling in size of the residential PV markets and an increase over 2008 of 37 percent in annual installations is pretty darn impressive.
This growth was aided by three new CSP plants and the American Recovery and Reinvestment Act of 2009 (ARRA), which effectively overturned the public policy losses experienced during the previous administration.
According to SEIA, solar equipment manufacturers were awarded $600 million in manufacturing tax credits under ARRA.  This stimulus resulted in investments in new and upgraded factories of more than $2 billion.  In other words, not only is solar technology an efficient alternative to fossil fuels, but if we are building more capacity this may result in more competitive pricing – or at least better financing.
It surprises many people to learn that when the pollution costs of the goods we buy from other countries are factored into the total sum of the greenhouse gas emissions for which the U.S. is responsible, we ‘win’ as the heaviest polluting country, even outpacing China. (As a side note, China is now leading as the fastest growing green energy economy, leaving us all in the dust.)
In the U.S. solar water heating (SWH) installations are the recurring success story. They continue to show 10 percent year-over-year growth and with the latest technology – such as a back-up on-demand system – can provide most, if not all, the hot water a family would need.

As of last year a new form of financing – called property-assessed clean energy (PACE) - was initiated by the City of Berkeley.  Sixteen states have now adopted this financing mechanism and enacted PACE-enabling legislation. If you are located in any of these states, you may be able to finance a new system without going through the usual bank financing song-and-dance routine:

California, Colorado, Illinois, Louisiana, Maryland, Nevada, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Texas, Vermont, Virginia and Wisconsin

Property managers and condominium associations may do well to consider replacing conventional hot-water heating systems with a solar-based one.  The payback can be easily calculated by an energy auditor, the systems manufacturers or even a local public utility company.  Although individual building use may vary, for the landlord who is paying for water, the payback would probably run between four and six years.  As water is a precious and dwindling resource in many communities, with expected increases in water fees, this payback may occur sooner than we can predict here.
PACE provisions allow all classes of property owners to finance solar energy systems through municipal or other government-backed bonds via an assessment on their property taxes.  Whether your units are singles or residential commercial, that includes you. Not only does PACE eliminate the barrier of high upfront costs, it makes credit readily available for these solar improvements. PACE also allows transfer of the system, the remaining debt and the same financing terms to new property owners when the property is sold. Solar pool heating (SPH) is also a highly efficient system for residential units with outdoor or indoor pools, but these residential installations declined by 10% in 2009, a reflection of the broader construction market.

If you are in a ‘buy American’ frame of mind, many of the leading solar companies are headquartered in the U.S. with existing manufacturing plants, and plans are also in the works to build more here as demand increases.

Any residential apartment owner hoping to decrease energy costs for water heating or a complete conversion to solar energy would be very wise to also check out the Database of State Incentives for Renewables and Efficiency Solar Portal http://www.dsireusa.org/.  You can search by state for tax credits, rebates and other available incentives.
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