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 15, 2013 at 2:04pm

Richard,

I would appreciate very much your answering  on ESB and Colorado DER questions, - somehow  ignored  3d time in a raw ...

Questions.

 

Empire State Building

Let's try this one more time. Energy upgrades are NOT energy efficiency upgrades. The $93 million was spent on standard rehab and replacement of worn out equipment. The additional $13 million was the cost of making the equipment work together.  By upgrading to more efficient windows, air sealing, higher levels of insulation, lighting and tying it all together with with computer energy management systems. The additional cost $13 million was paid

Correct me if I’m wrong, but why projected savings of 4.4millions (confirmed so far is 2.4 millions …) is attributed to $13 millions spent on computer energy management systems? What this computer energy management systems worth without $90 millions standard rehab and replacement of worn out equipment, upgrading to more efficient windows, air sealing, higher levels of insulation, lighting ?

What mileage improvements can be expected by installing modern electronic controls on 50-60 years old car without upgrading engine, carburetor, etc?

 

 

DER in Colorado

And by the way Igor you way over stated the cost to do a DER on a single family home. It cost closer to $20,000. I do DER for a living in Colorado and when you do the work as part of a rehab it adds 30% to the total cost and on a 30 year mortgage pays for itself day one from energy savings paying into the mortgage. 

I used data of $100K and $30K retrofits (139 and 47 years pay back period, correspondingly). What is average cost of rehab in Colorado if DER counts for 30%? What is energy savings? What part of energy savings is attributed to rehab and what to DER?

Comment by Igor Zhadanovsky on January 15, 2013 at 1:55pm

Ted,

Thanks for continuing discussion.

If you check the blog, there is no statement about payback period bar limits for investment. The point is choosing the most efficient investment. Looks like sometimes you have difficulties in justification of proposed expensive DER …

 

Your example of “a $10,000 improvement that saves $500 a year, let's say the improvement increases the value of your building by $9000 “in real life might compete to another solution where “a $5,000 improvement that saves $1000 a year, let's say the improvement increases the value of your building by $4000.”

Depends on particular situation and preferences, you’ll name the second choice pure idiocy; I’ll consider it pragmatic solution.  Please, note that none of choices is rejected; - it’s a choice of better solution to particular real life situation.

Comment by Richard Scott Mills on January 15, 2013 at 12:50pm

Thank you Ted. Great response!

Comment by tedkidd on January 15, 2013 at 10:36am
 It’s incorrect to label payback period analysis as ““spherical caw approach” 

One more try to explain how "simple payback" doesn't recognize VALUE.  

If you are a building owner reviewing a $10,000 improvement that saves $500 a year, let's say the improvement increases the value of your building by $9000.  

Using a bar that requires simple payback of less than 20 years is pure idiocy from my perspective because the answer to this investment would be "NO".  

Personally, I think it makes sense to take a broader look at investing.  

People who don't understand net worth are likely not to have one.  Most people that bring up "payback" to me live in a dream world, the $42 dollars they have to their names is earning .5% in a saving account (200 year payback before factoring taxes?).  

They'd be borrowing for the improvement, so for them cash flow analysis should be the priority.  

Comment by Igor Zhadanovsky on January 15, 2013 at 10:21am

Reply to Tom Delconte:

Tom,

Actually, I never thought about connection between short payback period and frequency of Americans moving. Good point – thanks.

There are energy improvements with payback period longer then seven years though. Such improvements will increase the real estate value, if they clearly calculated and confirmed. Plus, the owner who takes this approach will get better comfort for the time of living there.  Again, low hanging fruit has priority.

The point is getting significant results with minimal efforts and cost (bang for a buck).

Thank you.

Comment by Igor Zhadanovsky on January 15, 2013 at 10:17am

Reply to Richard Scott Mills comment.

Richard,

Again, your questions are in bold italic  and my answers follows. Also, none of the specific questions I asked so far was answered, - I’ve repeated them at the end of this post. Hope to see the answers … 

Plz give your best answer to the arguments you've been making on a national scale. What would/are you doing and what do you see as the final solution for the built environment in lowering energy use. 

I’m working on modern Vapor Vacuum Heating (VVH) technology. Basic info about concept, cost analysis, etc. can be found here http://www.cibse.org/content/cibsesymposium2012/Paper106.pd  Sorry, have to repeat the link from original blog which you probably missed.

When I did cost analysis compared to hot water heating system, naturally other approaches to improve building energy efficiency were considered. I was surprised by the difference in cost and final results. It’s a main idea of the blog I started.

Building envelope, materials, climate, fresh air, humidity, etc are only few variables of DER complex equation. Solution is complex and not cheap … rather expensive. 

Meanwhile, significant energy efficiency gains can be achieved by tuning or retrofitting existing heating system at a fraction of cost compared to DER. Steam heating system retrofit into VVH is my particular area of interest.   

Your question about “final solution for the built environment in lowering energy use” should be addressed to experts with a  vision of a bigger picture. I would define “final solution” as a long process of steady improvements, based on cost efficiency analysis and started from “low hanging fruits”.

 

Mr. Anschel article is about renovators who do not understand building science, his headline is just an attention grabber. He is a DER and a dedicated building science promoter. If you had read the whole article he gives a list of what needs to be done for a successful DER.

I do read the article, not once … Don’t see discrepancies with what was said in the blog. May be it will be helpful to ask Mr. Anschel opinion? – he is definitely an expert with  big picture of DER business   

 

You seem to be the guy in the back of the room that finds it easier to pooh-pooh everything then helping to work towards a solution. Integrated energy design use science, engineering best practices to lower cost, improve home comfort, health and safety.  

The label of “pooh-pooh guy in the back of the room” is incorrect – I’ve gladly accepted your example of a pro hockey rink in Canada as a good engineering solution and cost based approach. I’ll do the same if the questions about estimations of payback period for Empire State Building and DER in Colorado will be answered clearly (see below, please). 

More likely, I’m a guy in a back of the room who is not satisfied with general answers and vague calculations and is not afraid to ask inconvenient questions.

 

 

Yes climate change, green house gas, reducing imported fossil fuel are all based on different science fields but they are all interdependent and must be worked on in total if we are going to reduce our energy use.  

Probably, our opinions about climate change and green house gas are quite different and are not worth to be discussed here.  

Regarding “imported fossil fuel”, please check http://grigory.com/truth_about_energy.htm. Besides, a recent massive natural-gas discovery shifted the nation's energy landscape. After an era of declining production, the U.S. is now swimming in natural gas - http://online.wsj.com/article/NA_WSJ_PUB:SB124104549891270585.html.

 

Thank you.

 

Questions.

 

Empire State Building

Let's try this one more time. Energy upgrades are NOT energy efficiency upgrades. The $93 million was spent on standard rehab and replacement of worn out equipment. The additional $13 million was the cost of making the equipment work together.  By upgrading to more efficient windows, air sealing, higher levels of insulation, lighting and tying it all together with with computer energy management systems. The additional cost $13 million was paid

Correct me if I’m wrong, but why projected savings of 4.4millions (confirmed so far is 2.4 millions …) is attributed to $13 millions spent on computer energy management systems? What this computer energy management systems worth without $90 millions standard rehab and replacement of worn out equipment, upgrading to more efficient windows, air sealing, higher levels of insulation, lighting ?

What mileage improvements can be expected by installing modern electronic controls on 50-60 years old car without upgrading engine, carburetor, etc?

 

 

DER in Colorado

And by the way Igor you way over stated the cost to do a DER on a single family home. It cost closer to $20,000. I do DER for a living in Colorado and when you do the work as part of a rehab it adds 30% to the total cost and on a 30 year mortgage pays for itself day one from energy savings paying into the mortgage. 

I used data of $100K and $30K retrofits (139 and 47 years pay back period, correspondingly). What is average cost of rehab in Colorado if DER counts for 30%? What is energy savings? What part of energy savings is attributed to rehab and what to DER?

 

 

Comment by Richard Scott Mills on January 14, 2013 at 6:51am

Igor

Plz give your best answer to the arguments you've been making on a national scale. What would/are you doing and what do you see as the final solution for the built environment in lowering energy use. 

Mr. Anschel article is about renovators who do not understand building science, his headline is just an attention grabber. He is a DER and a dedicated building science promoter. If you had read the whole article he gives a list of what needs to be done for a successful DER. 

You seem to be the guy in the back of the room that finds it easier to pooh-pooh everything then helping to work towards a solution. Integrated energy design use science, engineering best practices to lower cost, improve home comfort, health and safety.  

Yes climate change, green house gas, reducing imported fossil fuel are all based on different science fields but they are all interdependent and must be worked on in total if we are going to reduce our energy use.  

Comment by Tom Delconte on January 14, 2013 at 6:01am

Hello Igor,

Your post is actually the only one seen here which seems to recognize the value of looking for short payback periods. Since Americans generally move every seven years, maybe a little slower than that since the recession, you must search for paybacks less than seven years. energy improvement costs are rarely recovered on selling the property, especially now, with an unknown 2013 real estate market. You seem to recognize that these things have to do with buildings, not fantasy! Thank you.

Comment by Igor Zhadanovsky on January 13, 2013 at 4:41pm

Richard,

 

My comments follows your remarks (bold, italic)

Let's try this one more time. Energy upgrades are NOT energy efficiency upgrades. The $93 million was spent on standard rehab and replacement of worn out equipment. The additional $13 million was the cost of making the equipment work together.  By upgrading to more efficient windows, air sealing, higher levels of insulation, lighting and tying it all together with with computer energy management systems. The additional cost $13 million was paid

Correct me if I’m wrong, but why projected savings of 4.4millions (confirmed so far is 2.4 millions …) is attributed to $13 millions spent on computer energy management systems? What this computer energy management systems worth without $90 millions standard rehab and replacement of worn out equipment, upgrading to more efficient windows, air sealing, higher levels of insulation, lighting ?

What mileage improvements can be expected by installing modern electronic controls on 50-60 years old car without upgrading engine, carburetor, etc?

 

A good illustration is a pro hockey rink in Canada that needed to replace the boiler and ice rink freezing system. Instead of replacing with new they found that going to a reverse chiller they could piggy back the waste heat from freezing the ice into hot water for showers and space heating. The cost to change systems was about the same but the energy use dropped by 40%.

A pro hockey rink in Canada is an example of good engineering solution, cost based approach.

 

And by the way Igor you way over stated the cost to do a DER on a single family home. It cost closer to $20,000. I do DER for a living in Colorado and when you do the work as part of a rehab it adds 30% to the total cost and on a 30 year mortgage pays for itself day one from energy savings paying into the mortgage. 

I used data of $100K and $30K retrofits (139 and 47 years pay back period, correspondingly). What is average cost of rehab in Colorado if DER counts for 30%? What is energy savings? What part of savings is attributed to rehab and what to DER?

 

The bottom line for DER is not even about money, the savings is a profit. What is most important is that you will have a healthier and more comfortable home. Priceless! 

Now we moved from economy to more philosophical ground. The benefits and harm of DER is a complex question. I’d like to quote Michael Anschel The Folly of Deep Energy Retrofits  http://www.remodeling.hw.net/building-performance/the-folly-of-deep-energy-retrofits.aspx

It’s an excellent article, you’ll surely enjoy

 

The way some people are chasing energy efficiency retrofits you would think there was a pot of gold at the end of the net-zero rainbow. Too bad; the pursuit is just as foolish and unproductive as chasing rainbows in the first place.

.......

In focusing our conversation on BTUs and watts saved, we may in fact be making the situation worse. We already know trying to show ROI with dollars for anything other than the most basic of operations is a losing proposition, and measuring kilowatt hours and BTUs results in releasing more catalysts into the atmosphere. What is needed is a systems approach to reducing emissions that measures GHG (green house gas) released as well as total environmental impact of the fuel source. The data isn’t hard to find, but it doesn’t allow for a one-size-fits-all policy for the country and it points an ugly finger at some states that would be politically unpopular.


Richard,

 

My comments follows your remarks (bold, italic)

Let's try this one more time. Energy upgrades are NOT energy efficiency upgrades. The $93 million was spent on standard rehab and replacement of worn out equipment. The additional $13 million was the cost of making the equipment work together.  By upgrading to more efficient windows, air sealing, higher levels of insulation, lighting and tying it all together with with computer energy management systems. The additional cost $13 million was paid

Correct me if I’m wrong, but why projected savings of 4.4millions (confirmed so far is 2.4 millions …) is attributed to $13 millions spent on computer energy management systems? What this computer energy management systems worth without $90 millions standard rehab and replacement of worn out equipment, upgrading to more efficient windows, air sealing, higher levels of insulation, lighting ?

What mileage improvements can be expected by installing modern electronic controls on 50-60 years old car without upgrading engine, carburetor, etc?

 

A good illustration is a pro hockey rink in Canada that needed to replace the boiler and ice rink freezing system. Instead of replacing with new they found that going to a reverse chiller they could piggy back the waste heat from freezing the ice into hot water for showers and space heating. The cost to change systems was about the same but the energy use dropped by 40%.

A pro hockey rink in Canada is an example of good engineering solution, cost based approach.

 

And by the way Igor you way over stated the cost to do a DER on a single family home. It cost closer to $20,000. I do DER for a living in Colorado and when you do the work as part of a rehab it adds 30% to the total cost and on a 30 year mortgage pays for itself day one from energy savings paying into the mortgage. 

I used data of $100K and $30K retrofits (139 and 47 years pay back period, correspondingly). What is average cost of rehab in Colorado if DER counts for 30%? What is energy savings? What part is attributed to rehab and what to DER?

 

The bottom line for DER is not even about money, the savings is a profit. What is most important is that you will have a healthier and more comfortable home. Priceless! 

Now we moved from economy to more philosophical ground. The benefits and harm of DER is a complex question. I’d like to quote Michael Anschel The Folly of Deep Energy Retrofits  http://www.remodeling.hw.net/building-performance/the-folly-of-deep-energy-retrofits.aspx

It’s an excellent article, you’ll surely enjoy

 

The way some people are chasing energy efficiency retrofits you would think there was a pot of gold at the end of the net-zero rainbow. Too bad; the pursuit is just as foolish and unproductive as chasing rainbows in the first place.

 

In focusing our conversation on BTUs and watts saved, we may in fact be making the situation worse. We already know trying to show ROI with dollars for anything other than the most basic of operations is a losing proposition, and measuring kilowatt hours and BTUs results in releasing more catalysts into the atmosphere. What is needed is a systems approach to reducing emissions that measures GHG (green house gas) released as well as total environmental impact of the fuel source. The data isn’t hard to find, but it doesn’t allow for a one-size-fits-all policy for the country and it points an ugly finger at some states that would be politically unpopular.

Comment by Richard Scott Mills on January 13, 2013 at 7:04am

Guys 

Let's try this one more time. Energy upgrades are NOT energy efficiency upgrades. The $93 million was spent on standard rehab and replacement of worn out equipment. The additional $13 million was the cost of making the equipment work together.  By upgrading to more efficient windows, air sealing, higher levels of insulation, lighting and tying it all together with with computer energy management systems. The additional cost $13 million was paid for with a profit of $4 million by not needing to replace the old HVAC to a larger unit at a cost of $17 million.

It's integrated design, gentlemen, looking at the whole building as one system and designing with the goal of reducing energy use. 

A good illustration is a pro hockey rink in Canada that needed to replace the boiler and ice rink freezing system. Instead of replacing with new they found that going to a reverse chiller they could piggy back the waste heat from freezing the ice into hot water for showers and space heating. The cost to change systems was about the same but the energy use dropped by 40%.

PS All the parsing about exact pay back is fiddle faddle. The energy savings paid for itself in the design phase and saved the project $4 million before they started. You are way over thinking this solution to so many of the biggest problems facing the planet.

And by the way Igor you way over stated the cost to do a DER on a single family home. It cost closer to $20,000. I do DER for a living in Colorado and when you do the work as part of a rehab it adds 30% to the total cost and on a 30 year mortgage pays for itself day one from energy savings paying into the mortgage. 

The bottom line for DER is not even about money, the savings is a profit. What is most important is that you will have a healthier and more comfortable home. Priceless! 

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