Greening your Property Does Not have to Cost a Lot of Green
By Jeffrey S. Lapin, CPM®
Sometimes, despite our best efforts to be responsible stewards of the planet, property managers’ desired green projects do not survive budget discussions with our owners. In my experience, the cause of a rejected proposal is often the way in which they are presented. More about that below.
We want to do certain projects that reduce energy usage and operating expenses, increase net income and value and yes, make the property greener. So we need to get creative and figure out ways to do these projects less expensively or alternatively, package them in more financially attractive terms that our owners can get behind.
Some energy efficiency improvements are classified as “Low Hanging Fruit”. That means that they are relatively inexpensive (relative to the savings attributable to those investments) and therefore provide a return of the initial investment in a relatively short period of time. Some can be completed within our already approved maintenance budgets using in-house maintenance labor.
The payback period for such investments (the time it takes to recover the cost in energy savings) is usually within the “sweet spot” (3-5 years). In this article, we will explore some of these green investments and how they fit in the larger scheme of greening our properties.
The immediate financial benefits of improving our facilities with low cost green upgrades include increased NOI (net operating income), increased value and the extended life of equipment. The benefits that are harder to quantify but are very real are improved tenant comfort and better community relations.
Consider this wisdom – just because it’s working as designed does not mean that it’s working efficiently. Older equipment and fixtures are simply less efficient than newer replacements. That means that replacement with newer, energy efficient equipment usually makes great sense economically. Manufacturers are constantly turning out more and more energy efficient products because the marketplace demands them. Let’s explore some possibilities.
Benchmarking your property – how does it stack up?
The best place to start is to compare your property’s energy usage and expenses to similar buildings. This process, called “benchmarking”, is used by facility managers and asset managers around the world to determine if the subject property is performing better than, the same as or worse than similar properties in the same age range, size range, sub-market, etc.
Fortunately, property managers have a lot of resources available to benchmark their buildings and establish the baseline or current condition of their properties. You don’t have to call around to other managers and ask what their energy usage and expenses are.
Web based sources of comparative expense data include IREM’s ® Income/Expense Analysis Reports (available through IREM’s® web site – www.irem.org) and IREM’s® partnership site with Green PSF® (www.IREMSustainability.org ). These sites and others like them, such as Energy Star® (www.energystar.org), are huge data bases of building data including the age, size and type of buildings and their respective energy costs. Simply sign up, enter your data and compare it to the other properties of similar make up.
In addition to web based information for benchmarking, numerous energy audit providers exist in almost every area who, for no cost or very low cost, will come to your property and conduct an energy survey or audit. Often, these groups work hand-in-hand with licensed electrical contractors and utility providers to provide these services in conjunction with state or federally mandated energy reduction programs.
These programs usually have large pools of government grant funds associated with them and the energy providers are mandated to get those dollars converted into lighting or other equipment retrofits designed to reduce energy usage. In other words, they want to invest in your properties.
The usual energy audit consists of a full inspection of the building(s) by an experienced contractor who will look primarily at lighting and HVAC as these are the largest energy users in a typical commercial building. Then the auditor will use his findings, along with your energy bills to issue a written audit report detailing the findings and recommendations. Expect a lighting retrofit recommendation, along with associated rebate savings offered by a licensed contractor who is working with the utility provider to utilize government funding for at least part of the cost.
The audit report, also usually free, will likely detail the products recommended and guidance on how to implement the program and the projected savings plus payback period analysis. These reports are invaluable to the property manager as they provide an “independent” third party analysis of projected savings for upgrades that really make a difference in the property’s energy bills over the short and long haul.
Heating, Ventilation and Air Conditioning (HVAC)
HVAC is likely the largest single user of energy at your properties. For most commercial properties, HVAC usage comprises up to 50% of the total energy usage. So a retrofit of this equipment will usually have a big impact on utility costs. But even if you don’t have the ability to retrofit your tired, old HVAC system right now, there are positive steps you can take.
Start with your controls, including thermostats. Depending on the age and design of your property, you may have a simple system of package units on the roof providing both heating and cooling to your tenant spaces. In such cases, and depending on the age of the building, these units may be controlled by simple analog thermostats located in the tenant spaces. Many older properties (more than 10 years old) do not have EMS systems (Energy Management Systems). Or if they do have such systems, they are early versions and not much more than time clocks to start and stop equipment.
Consider upgrading your thermostats (T-stats) to digital, programmable units. Digital T-stats have the ability to be programmed to the exact temperature range that you specify (which may be set by ASHRAE)HH. They are also more precise and if locked, cannot be “fiddled with” by your tenants. You can even program a range of temperatures that are available for the tenants to select. This alone will save a lot of money as it prevents the tenants from setting the summer temperatures down to 68 degrees or the winter settings up to 75 and leaving for the weekend. It also will likely increase overall tenant comfort.
If your building has an EMS system, consider yourself lucky. But even sophisticated EMS systems require some maintenance. When was the last time the software running the system was updated to the newest version? If it’s been a while, this may be a great investment. The software is the “brains” of the system and the manufacturers of EMS systems spend a lot of money to constantly upgrade the software to do more and manage better. If your version is more than two years old, consider this upgrade.
And speaking of starting and stopping big equipment, managers should know that their electricity rate is based on peak electrical usage as determined by the meter. So if your big motors, fans, chiller, cooling tower fans or other large energy users are programmed to all start at the same time, you are likely setting a peak usage at a very high level. Instead, use your EMS (or time clocks if that is what you have) to optimize or stagger the start of this equipment so it gradually comes on in the morning instead of all at the same time. And it’s a free improvement!
Solar gain or heat loss from windows, especially older single pane windows, can increase or decrease the temperatures inside the occupied areas of a building more than other sources such as lighting and people load. Take another look at window treatments such as solar film. New technology in such films has vastly improved the look, longevity and effectiveness of such products. 3M’s Prestige® line of film is virtually invisible from inside and outside the building and can greatly reduce solar heat gain.
And while you’re at it, take a fresh look at your window coverings. Are you still using metal mini-blinds? These can often act as a “heat sink”, absorbing and holding onto heat, adding to the amount of heat that your tenants feel when it’s hot and that the HVAC system needs to remove. In such cases, a modest investment in roll down solar shades may drastically reduce solar gain and have a very short payback. These shades allow the tenants to look outside, but block up to 97% of the solar radiation entering your building. They also keep heat in and they look great. Maybe it’s time to change your tenant improvement standards.
When was the last time you had a contractor look at the condition of joint sealant at your property? Over time, sealants wear out, shrink, move and get pecked out by birds. This includes the joints between panels on the exterior of the building as well as the window frame to panel joints and the seals of the glazing itself. Voids left by inadequate or failed sealants allow warm air to escape from the building in winter and cool air to escape in summer. These conditions are easy to fix and will have a dramatic effect on energy usage.
Similarly, all door seals to the exterior should be checked regularly to ensure that weather stripping and gaskets are in place, not damaged and doing what they were designed to do. By the way, do your tenants prop exterior doors open for smoke breaks or convenient no-key entry? You might as well leave the windows wide open.
The reason why retrofitting lighting from incandescent, older fluorescent (T12 style), high-pressure sodium (HPS), halide and other older technologies is usually on the menu for any greening program is that lighting in most commercial buildings is the second largest single user of electricity. Per Energy Star®, lighting averages 25-30% of a commercial building’s energy usage.
Many property managers do not even explore or recommend such programs due to the large upfront cost and inconvenience to tenants associated with such endeavors. It is well worth the property manager’s time however to pursue lighting retrofits because of the “bang for the buck” they provide. And if you are able to take advantage of generous tax dollars which utility providers are mandated by law to utilize for such programs, you can end up with a net cost to savings that results in a very acceptable payback period (often 3-5 years).
But if you cannot take advantage of such programs and do the big lighting retrofit, see the next section for the “Low Hanging Fruit” items that you likely can do for little cost and still be a hero to your owner.
What Can You Do Now? – Lighting
Even if rebate programs are not available or if your owner does not want to spend any significant money on green projects, you can still complete upgrades that will have an immediate impact on your property’s bottom line.
First, focus on the largest users of energy. As stated above, after HVAC, Energy Star® has found that lighting is overwhelmingly the biggest user at 25-30% of your usage. Retrofit kits can be purchased relatively inexpensively to convert existing lighting fixtures to high efficiency LED. Talk to your lighting supplier about available options that can be installed in small phases.
If your building is currently outfitted with fluorescent fixtures that utilize either T12 or even T8 type bulbs, you’ll be amazed at the difference an LED retrofit will make in both the energy usage (it’s a fraction of fluorescent) and the improved levels of lighting achievable. And best of all, once you install LED, you won’t have to change those bulbs for a long, long time. Some are convinced that LED light colors are too harsh but newer LED has solved a lot of that objection. Many LED fixtures are dimmable – check it out.
And lighting is not just the light bulbs. Installing motion sensors to control lighting in occupied areas as well as common areas (don’t forget electrical rooms, mechanical spaces, storerooms, etc.) is a great way to reduce your building’s energy footprint. Why light unoccupied areas?
Updating your building’s tenant improvement standards (the specifications for all new buildouts) is an important step in moving your properties toward energy efficiency. As new suites are built out, bring lighting up to LED lighting standards, install motion sensors and controls and use other technologies to gradually reduce energy costs.
Speaking of controls, computer technology has allowed the property manager and engineers to micro-control the lighting and HVAC usage in commercial space to a degree never before imagined. Some states (like California) require most new tenant improvements to include energy management systems to harvest daylight, meter electrical usage and reduce HVAC zoning to very small areas. And while these technologies are not cheap, it is all relative to the associated savings. Think payback period and lifecycle costing, not initial expense.
NOTE: ONLY A LICENSED ELECTRICIAN SHOULD PERFORM WORK ON ELECTRICAL SYSTEMS. SOME FIXTURES ARE CONNECTED TO HIGH VOLTAGE SOURCES AND UNTRAINED PERSONNEL SHOULD NOT ATTEMPT TO REPAIR OR REPLACE SUCH FIXTURES DUE TO THE RISK OF SEVERE INJURY OR DEATH.
We sometimes forget about the amount of water we use in commercial buildings. Things like cooling towers, water cooled chillers and even our landscaping are big water users (and often water wasters). Consider as additional Low Hanging Fruit, upgrading fixtures such as toilets, urinals and faucets to low-flow type devices. Installing motion sensors on faucets and toilets can save significant water. And usually these items can be installed by your in-house maintenance crew, saving significant money.
Also look at drip irrigation as a great way to use water more efficiently. And a new computerized controller with a rain sensor will pay for itself rather quickly. By the way, are you watering sidewalks, parking lots and such instead of plants? Adjusting spray heads is a must.
Switching out older water heaters and boilers to tankless models is not inexpensive but the payback period is typically fairly short. Even if you can’t toss out your old equipment now, consider upgrading when you do need to replace this equipment. And consider installing a recirculation pump on the hot water loop. This ensures that tenants won’t be running the hot water for two minutes before it’s actually hot at the tap.
Enlist the Help of Your Tenants
My final suggestion is to use another free option to green your property – your tenants.
If tenants understand what you are trying to do (reduce costs and be environmentally conscious) they will often get on board and help you. After all, most people today are more conscious of their carbon footprint and want to feel good about saving the planet. Consider holding a green building tenant event with a speaker who can address these issues. And ask the tenants to conserve, be a part of the effort, etc. Make a game of it. You will be surprised how the tenants will compete to see who can be the best at policing the T-stats, closing doors, turning off lights, etc.
And remember that the tenant’s computers, monitors, copiers and specialty lighting are all adding to the energy usage at the property. Make them aware of that and encourage them to upgrade to more energy efficient equipment too.
Most of us who operate commercial properties do not have unlimited funds to spend to green our projects. Even investments that have a short payback (3-5 years) may be disapproved due to a lack of funds. That is the reality in which we live.
But by being creative, showing the lifecycle costs and using some of the other ideas presented here, you can be a green hero with your owner and with your tenants. Many of the foregoing ideas are zero or low cost and can often be accomplished with little outside labor or materials. You have a lot of resources that are there for your use – especially those provided by IREM®.
Start by benchmarking your project against similar buildings in the market. If you can show the owner that your energy costs are higher than they should be, which is likely hurting the leasing effort, you’re on your way to a greener property. Take advantage of government grants to reduce the net cost of retrofitting lighting and HVAC.
Lastly, learn to speak the language of finance to sell your energy efficiency projects to ownership. Instead of presenting a lighting retrofit as a cost of $X.XX, consider presenting the lifecycle cost and payback period of a proposed project. You may just find that presenting your ideas consistently with the owner’s way of thinking of investments is a winning strategy.