By Paul D. Spiegel, P.E., LEED AP, President, Practical Energy Solutions

Does this sound familiar? It’s been 17 years since your rooftop HVAC units were installed, and it seems that you are spending more on repairs every month than you are on the energy costs to run the entire building for the month.

So you call in your HVAC maintenance contractor to give you a price for an “in-kind” replacement of everything that you have on the roof of your building. He/she comes back with a proposal for a one-for-one replacement, let’s say brand new packaged gas powered heating and electric cooling rooftop units, the exact same size as your older units, and higher in energy efficiency allowing you to save 5% to 6% on your energy costs.

You may be missing an opportunity to improve the energy performance of your building, increase the net asset value of your building, reduce maintenance costs for your HVAC (and your roof), and significantly extend the service life of your HVAC equipment, meaning that rather than being back at the same point in 15 years buying the next replacement, you could stretch that to 25 or 30 years.

This is a common issue in building construction, maintenance, and renovation/repair, where different options are considered and decisions are based only, or primarily, on first cost, and not the overall life cycle cost of your equipment. Life Cycle Cost Analysis (LCA) evaluates all of the costs associated with each of your options, including first cost, and the present value of future maintenance costs and energy savings, the years of service that you’ll get, and the replacement cost. Often what seems to be the more expensive option is actually the best financial choice

A case study: a client with a multi-story office building. The client had a building that was heated and cooled with 42 air source heat pumps which were nearly 20 years old, many of which were split systems that had units on the low roof area where they were exposed to the elements. Maintenance issues kept the facilities staff busy on one unit or another almost every day, and it was time to make an investment in replacement units. The rough quote from their HVAC Contractor was approximately $1.4 million. The building owner hired Practical Energy Solutions to calculate any energy savings based on the quote received, and to explore other options. Due to the improved efficiency of new units as compared to 20 year old units, they were likely to save over $100,000 per year in energy costs, or about 15% of their HVAC energy costs. If they financed 100% of the cost over 15 years, the project would break even over the 15-year loan term, at which time they would likely be shopping for new heat pumps again!

Another Option: Due to space that they had available in the basement, it was determined that a central dual temperature hydronic system could be installed in phases and be used to replace the existing heat pump system. Benefits included higher energy savings (32% instead of 15%), longer service life of the equipment, extended service life of the roof where rooftop units had been operating, reduced noise in the tenant spaces where the heat pumps were located, recovery of the heat pump closets as useable (rentable!) space, and a project that had a net positive cash flow of over $500,000 during the 15 year life of the loan. Although the initial cost was higher, nearly 100% of the project cost could be financed, and the monthly energy savings were higher than the monthly loan payments for the financing – cash flow positive from day 1, and a system that is likely to last over 25 years, and with one central chiller and one central boiler to maintain and keep parts for, and significantly reduced maintenance costs.

The moral of the story is that while an in-kind replacement can appear to be the simplest solution, you should always look at the total life cycle cost of one or two other options that can have a greater positive impact!

Over the past fours years, the Coatesville Solar Initiative has been working to bring awareness in renewable energy to local school districts, specifically the Coatesville Area School District. The Coatesville Solar Initiative team has developed a project that will NetZero the high school and is currently under review by the school board.  This project will provide expanded math and science curriculum and inspire students with the STEM technology of the future, all while saving money and helping the environment.

As part of the initiative, the team is requesting support through an online petition. To view the petition, please follow the link below. https://www.change.org/p/community-support-solar-power-coatesville-schools

For more information on the Coatesville Solar Initiative, visit http://www.gogreencsi.com/.

Written by Scott Skylar, President of The Stella Group, Ltd.- Published on RenewableEnergyWorld.com

In 2015, the industry made landmark strides in the eventual global transition to a sustainable energy future. This year will be seen as the pivotal point in a huge political, economic and social move on an unprecedented level. In the mid-1970s, I would talk about this time under essentially disbelieving and scornful policymakers who were incredulous that a world could exist without the portfolio of fossil and nuclear fuels.

No. 10 – Global Clean Energy Investments Reach $2 Trillion

Stefan Nicola of Bloomberg reported in March 2015 that “investors spent more than $2 trillion on clean-energy plants in the past decade and last year added more renewable capacity than ever before. The $270 billion spent in 2014 on renewable technologies such as wind and solar reversed a two-year dip in investments and brought in a record 103 GW of clean-energy power generation, according to a report released by the United Nations Environment Program, the Frankfurt School and Bloomberg New Energy Finance. ‘In 2014, renewables made up nearly half of the net power capacity added worldwide,’ Achim Steiner, UNEP’s executive director, said in a statement.”

No. 9 – Over 100 GW

The U.S. has installed a total of 4.378 GW of wind power and 1.495 GW of solar power generation capacity in January-November 2015, boosting its cumulative non-hydro renewables capacity to 104.3 GW. A 46.7 percent rise in wind power installations during the 11-month period, the total non-hydro renewables deployment in the U.S. in January-November 2015 increased to 6.175 GW from 5.886 GW in 2014.

No. 8 – Significant Studies on Max Renewables and Efficiency & Storage

There were many fabulous studies completed this year, including one published in Scientific American – 139 countries could get all of their power from renewables – whose authors presented the updated findings at the COP21 conference in Paris. Read the article in Scientific American here.

No. 7 – Grid Parity

Virtually all of the renewable energy resources are approaching grid parity, and one such study released this year exemplifies that change: Utility-Scale Solar Prices Decline 50% Since 2009 and Reach Cost Parity with Natural Gas at 5¢/kWh on Average. Read the September 30, 2015 article from the Lawrence Berkeley Laboratory here.

No. 6 – Moderate GOP Senators Form Green Working Group

This year started the accommodation that clean energy should have no ideological opponents (and see #9 as well). Republican Sens. Kelly Ayotte, Mark Kirk, Lindsey Graham, and Lamar Alexander launched “a new informal coalition … in an effort to broaden the Republican conference’s approach to environmental policy.”

No. 5 – Significant Job Growth

In a report released in 2015, the International Renewable Energy Agency said that by January 2015 more than 7.7 million people were employed by the renewable energy industries. In addition, The Solar Foundation reported in January 2015 that solar jobs grew 22 percent and have reached 173,807, more than 75 percent more than U.S. coal jobs.

No. 4 – A Moral Equivalent

High profile climate researchers, U.N. Secretary-General Ban Ki-moon, and church officials gathered at the Vatican for a conference on climate change. It’s Pope Francis’s latest effort to raise the profile of the issue among churchgoers, and it’s sure to make some Catholics hot under the collar. On June 18, 2015, Pope Francis released his long awaited Encyclical on the environment, called “Laudato Si (Be Praised), On the Care of Our Common Home”. It’s an open letter to shape Catholic teaching globally about humanity’s universal responsibility to “care for our common home” and tackle the root causes of the greatest interlinked challenges of our time: climate change and poverty. The letter opened the doors of official statements by leaders of almost every major religion on the planet.

No. 3 – States Step Out in Front

In October 2015, the California Public Utilities Commission upped the ante on energy storage, unanimously approving a mandate that requires the state’s three largest investor-owned utilities to add 1.3 GW of energy storage to their grids by 2020. And on Jun 11, 2015, Hawaii Gov. David Ige signed a bill that sets the state’s renewable energy goal at 100 percent by 2045 – the first such State to strive for the 100% goal.

No. 2 – Incentives Extended in U.S.

The Omnibus Budget Bill passed and signed by the President in December, providing that the 30 percent Investment Tax Credit (ITC) for solar will be extended for another three years, and then ramp down incrementally through 2021, and remain at 10 percent permanently beginning in 2022. The 2.3-cent Production Tax Credit (PTC) for wind will also be extended through 2016. Projects that begin construction in 2017 will see a 20 percent reduction in the incentive, and then the wind PTC will drop 20 percent each year through 2020. And extended through 2016 will be a range of energy efficiency measures, including energy efficient commercial buildings deduction. The provision extends through 2016 the above-the-line deduction for energy efficiency improvements to lighting, heating, cooling, ventilation, and hot water systems of commercial buildings. And extension of several biofuels provisions including Extension of second generation biofuel producer credit through 2016 the credit for cellulosic biofuels producers, as well as the extension of biodiesel and renewable diesel incentives. The provision extends through 2016 the existing $1.00 per gallon tax credit for biodiesel and biodiesel mixtures, and the small agri-biodiesel producer credit of 10 cents per gallon, including a provision that also extends through 2016 the $1.00 per gallon production tax credit for diesel fuel created from biomass.

No. 1 – A Global Agreement

Tim Profeta of Huffington Post reported in December that “the first pact to commit all countries to cut carbon emissions—the Paris Agreement—was signed by 195 countries in LeBourget, France, on Saturday. Some aspects of the agreement, which will go into effect in 2020, will be legally binding, such as submission of emissions reduction targets and regular review of progress toward them. However, the targets themselves will not be binding.

“The agreement contains these key points:

• To keep global temperatures “well below” 2 degrees Celsius (3.6 Fahrenheit) compared to pre-industrial levels through the year 2100 and to “endeavour to limit” them to 1.5 degrees Celsius
• To balance carbon source and carbon sinks in the second half of this century
• To review each country’s emissions reduction contribution every five years so that it can be scaled up
• For rich countries to help poor countries by providing “climate finance” to adapt to climate change.

“Previous United Nations talks had called on developed economies but not developing ones to mitigate greenhouse gas emissions. The new accord, in the works for nine years, requires action in some form from every country, rich or poor.”