Bang for the buck: deep-energy retrofit approach

"Americans can always be counted on to do the right thing...after they have exhausted all other possibilities." Winston Churchill

How much does it cost to perform a deep-energy retrofit at a 100-year-old single-family home? Thanks to a recent study in Utica, New York, we now know the answer: about $100,000. http://www.greenbuildingadvisor.com/blogs/dept/musings/high-cost-de...
The energy retrofit work greatly reduced the air leakage rate at all four buildings; final results ranged from 2.2 to 5.0 ach50. The homes had impressive levels of energy reduction; however, the energy-reduction goal of 75% was not met. Overall energy use (including space heating, domestic hot water, and electricity) was reduced by 60% to 65%. Electricity use in the four buildings actually went up. (Among the new appliances that added to the electricity load were the homes’ mechanical ventilation systems.)
The average cost for the work was $112,000 per building, or $89,783 per housing unit. The average annual energy savings was 393 therms of natural gas (11,486 kWh) per housing unit. Since the cost of natural gas in Utica is $1.65 per therm, the average annual energy savings are $647 per housing unit.
In other words, the simple payback period for these retrofits was 139 years.

The existing forced-air furnaces in these buildings were all removed, and new hydro-air heating systems were installed.

Unfortunately, it is unclear what percentage of energy use savings.is attributed HVAC imrovement.

Below are results of another super-insulation retrofit: "Teaching old houses new tricks, Build Boston 2010, November 18, 2010"http://www.buildboston.com/ResPlus/Images/Document/BuildBoston_B56.pdf

http://www.superinsulating.blogspot.com/

Project Savings & Costs

• Savings (40% Reduction in Gas Heat Usage)

$650 during heating season

Annual Savings $590-Gas | $60-Electric

• Costs

$11,000 - Super-insulate

$16,450 – New roof with super-insulation

$31,000 - Total Project

Although the retrofit cost and savings were significantly less, the simple payback period is 47.7 years instead of 139 years.
Looks more reasonable, still pay back period is on a high end...

Furthermore, a concerns are raised today about insulation materials impact on environment. A study published by a team of researchers in Building Research & Information makes it clear that the very materials that provide us with such energy efficiency are pumped full of harmful flame retardant chemicals.
http://www.businessinsider.com/green-materials-harmful-to-environme...

The reasonable questions follows from above results:

are deap retrofits make sense without government insentives?
for how long these insentives will last (good example Wind energy tax credit http://www.eia.gov/todayinenergy/detail.cfm?id=8870) ?
any other ways to improve house energy efficiency at reasonable cost and pay back period?

Heating system upgrade is a low hanging fruit often neglected when insentives are easily available.

A good example: 179 Henry Street. A Case Study in Converting from Two-Pipe Steam to Hydronic Heating (http://www.1energygroup.com/index.php/newsroom-3/234-179-henry-stre...)

The cost of the heating work was $610,774. For the 18 months prior to weatherization, the building used 9,580 MMBtu of #6 fuel oil per year at a cost of $137,450. A year and half later, the building has used 3,294 MMBtu of natural gas at a cost of $45,776, a 33% savings.

.payback period for this retrofits (610,774 /(137,450 - 45.776))*1.5 =~ 10 years

It's a bigger project then insulation retrofit projects above, but ROI comparison is valid, because ROI values are relative (years).

Actually, obsolete heating system conversion into hydronic is not the best available solution.

Hundred years ago steam system conversion into vacuum Paul system on average saved 35% of fuel cost and paid back within one year ("The Lost Art of Steam Heating" Dan Holohan). As it said, laws of physic did not change in last hundred years and this inexpensive and very efficient solution to steam system retrofit is readily available today.

Steam system conversion into vacuum was successfully utilized by ITC in 2006 Peter Cooper Village project (http://www.green-buildings.com/certs/ITCSteamSystem.pdf) Tests of efficiency were conducted by on-site facility management utilizing Con Edison meters in two five-building clusters with similar exposures. The tests resulted in a 27% reduction in steam consumption from the steam system baseline, resulting in approximately a 5 year payback for the $28,500,000 investment.

With progress in modern plumbing, materials and controls it's possible to get more benefits from vacuum heating. Basic info about modern Vapor Vacuum Heating (VVH) concept, cost analysis, etc. can be found in article for ASHRAE/CIBSE symposium London 2012 http://www.cibse.org/content/cibsesymposium2012/Paper106.pdf.

Research demonstrated that it is possible to integrate VVH with condensing boiler as well.

Compared to conversion into hydronic, steam system retrofit into Vapor Vacuum Heating is from 30-40% less expensive (up to 70% if existing boiler is salvaged), so pay back period can be dropped even more - to 3-5 years..

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Comment by Igor Zhadanovsky on January 12, 2013 at 12:00pm: Ted,

Richard made the point about difference between Green and EE, which roughly is difference between intangible and tangible benefits.

Both are important but priorities depend on particular situation. Not many landlords/house owners has the such luxury on incentives and funding like ESB case, so they focused more on tangible benefits (i.e. energy efficiency) and use payback period analysis to make smart choice.

Looks like your specialty is Green, which definitely has a great value but is of a less importance for people struggling to meet ends in today’s economy.

Thanks

PS There is a difference between initial variables zeroing in order to get general solution to the problem and “spherical caw approach” when everything is zeroed and useless solution “hangs in a vacuum”. It’s incorrect to label payback period analysis as ““spherical caw approach”

Comment by Igor Zhadanovsky on January 12, 2013 at 11:00am: Richard,

thanks for clarification, difference between Green and EE.

Unfortunately, all the available information about Empire State Building is not consistent.

At least amount you mentioned - 106 (93 + 13) millions is close enough to 120 millions on EE (referenced in http://www.crainsnewyork.com/article/20100303/REAL_ESTATE/100309950 )

Still puzzled about savings.

May be I understand it wrong, but 4.4 millions mentioned in your reference is expected savings (http://blog.rmi.org/blog_empire_state_retrofit_surpasses_energy_sav...)

According Skanska report for 2012: measurements show that the Empire State Building is currently exceeding its year one energy-efficiency guarantee by five percent (another gray area ?) , creating savings of $2.4 million. Once all tenant spaces are upgraded, the building will annually save US$ 4.4 million.

(http://skanska-sustainability-case-studies.com/index.php/latest-cas...)

What is additional cost of tenants space upgrade? When expected $4.4 miliion/year savings will be achieved?

I wish such info was clearly presented and easily available ...

Thanks.

Comment by tedkidd on January 12, 2013 at 10:50am: Richard, you have a nice way of explaining things. Maybe you can explain how attempting to parse the savings of one piece of a comprehensive design turns into a spherical cow analysis. Like looking at a three legged stool and asking if you can get the stool with just the one most attractive leg.

Too many think EE can be purchased this way. It's a failure to understand comprehensive design.

When people discuss payback, they hang a lantern on the blinders they are wearing. I wish I remembered how and when I made the jump in perspective so I could better inform others. Maybe you have an effective method for conveying the concept.

Comment by Richard Scott Mills on January 12, 2013 at 10:03am: Igor

Your right there is no cost to savings comparison on each up-grade.

The best I can tell you is that the capital budget for energy related projects was $93 million with no energy savings with additional $13 million (invested into design and equipment) they gained a profit of $4.4 million per year from 38% energy savings. A simple 50 year profit of $220 million, not counting price hikes or interest.

Energy efficiency and green are 2 different designations. Green is more about indoor air quality, product sourcing etc. EE is based on whole building systems integration towards the goal of energy reduction. Many writers and readers get confused.

Hope this clears things up.

Comment by Igor Zhadanovsky on January 11, 2013 at 2:26pm: Richard,
I followed the link
http://blog.rmi.org/blog_empire_state_retrofit_surpasses_energy_sav...

There is a nice breakdown on savings produced (seven items), it will be great to know the cost as well to figure out what item is the most efficient. Somehow the breakdown and final cost of EE are not mentioned at all.

Hate to ask again:

what is included in 13.2 million? is it design only?

if all EE upgrades are within 13.2 millions, why is 500 million rehub is called green at all? EE upgrades counts for 2.6% only ....

Do I missed somesing?

Thanks,

Igor

Comment by Richard Scott Mills on January 11, 2013 at 1:11pm: Igor

Here's the full story after the retrofit:

http://blog.rmi.org/blog_empire_state_retrofit_surpasses_energy_sav...

I gave you the short version which was from 2010.

The rehab is $500 million. The EE upgrades are $13.2 million. Savings $4.4 million p/y.

Comment by Igor Zhadanovsky on January 11, 2013 at 11:26am: Richard,

if you click on "Description" link below video, you'll see the date

Tuesday, August 03, 2010

It's projected gains ...

The $13.2 million dollar project will reduce its energy consumption by 35 to 40 percent while saving $3.8 million annually in energy costs.

Comment by Richard Scott Mills on January 11, 2013 at 11:19am: Igor

Plz go to link: http://www.rmi.org/HPB+Empire+State+Building:

See for yourself what was done.

Comment by Igor Zhadanovsky on January 11, 2013 at 10:00am: reply to Richard Scott Mills:

Richard, your reference to RMI is prelimenary study

Tuesday, August 03, 2010
A case study from RMI's video High Performance Building: Performance by Integrated Design. The Empire State Building is a leading example of a breakthrough process to retrofit large commercial buildings for environmental sustainability. Bringing together Johnson Controls, Jones Lang LaSalle and the Clinton Foundation, RMI helped identify a highly innovative package of retrofits. The $13.2 million dollar project will reduce its energy consumption by 35 to 40 percent while saving $3.8 million annually in energy costs.

Still, not clear about 13.2 million project (is it only project/design itself? or it includes all retrofits?)

Comment by Igor Zhadanovsky on January 11, 2013 at 9:15am: Ted,

there should be some ethic in any discussion, here as well. "An example of the stupidity of payback analysis", "great disservice to the EE industry" sounds over edge.

There is a great qoute by Albert Einstein I'd like to remind : "Make everything as simple as possible, but not simpler". Payback period is a tool for comparison, simple and clear, one of many.

If you cast "low hanging fruit" approach in EE as cherry picking, we'd better stop at this point.

Thanks

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