Friday, November 11, 2011

Study Clarifies the Energy Savings in Retrofitted Buildings
While the practice of retrofitting buildings with energy-conserving technology like efficient boilers, high-quality windows and compact fluorescent light bulbs has been around for years, data on whether these changes result in any real savings has been virtually nonexistent. Now, a new study shows that these relatively straightforward fixes can significantly reduce spending on fuel and electricity. Deutsche Bank Americas Foundation, a philanthropic arm of the German bank, and Living Cities, a nonprofit partnership of 22 foundations and financial institutions, commissioned the report, which will be released later this month. It examined nearly 19,000 affordable housing units in New York City that had undergone energy efficiency retrofits and found that these changes resulted in a 19 percent savings on fuel bills and a 10 percent savings on electricity across the portfolio. This translates into $240 in fuel savings and $70 in electrical savings per apartment every year.
At Terrific Tenements, for example, an 88-unit, two-building affordable housing complex on West 48th Street in Manhattan, the installation of new boilers and heating controls reduced fuel costs by 50 percent. At one of the buildings, at 425 West 48th Street, there was a fuel saving of $551 a year per apartment, while at the sister building at 527 West 47th Street, the saving was $355 annually for each unit.
The retrofits at the Terrific Tenements “was not achieved with any particularly exotic technologies” like solar panels or a green roof, [Marc Zuluaga of Steven Winter Associates] said. Rather, this is the simple story “of how an owner took the worst-performing building type in the city and turned it into one of the best-performing buildings in the entire city.”
Another project examined in the study is Riverview II in Yonkers, also owned by the Related Companies. The 343 apartments at Riverview, at 47 Riverdale Avenue, were heated with electricity, and the landlord was responsible for paying all of the tenants’ electrical bills. The Related Companies started an electrical savings program, including better windows, lighting upgrades and Energy Star refrigerators, that helped reduce overall electricity usage by more than 25 percent.

In addition, each apartment was responsible for paying its own electric bills, giving tenants an incentive to conserve electricity. As a result, the changes translated into $808 in annual savings for each apartment.

The study’s authors hope the results will go beyond persuading landlords to institute environmentally beneficial retrofits. They hope that lenders will use this data and consider underwriting larger loans to landlords based on the projected savings that come from retrofitting buildings.

Currently, lenders do not consider future savings from retrofits when they are underwriting a loan because there is little data indicating what those savings would be, experts said.

In addition to a lack of data, there is also some doubt whether energy audits, like those conducted by the Related Companies, are accurate. This is in part because some auditors are motivated to overstate the potential savings since favorable results help to justify the audits, and also because there is not sufficient follow-up to determine whether the energy audits were accurate.

To help resolve this, the study also created a tool for lenders to confirm the accuracy of energy audits. Using the data gathered, they divided New York City multifamily housing stock into categories based on a building’s age, heating system, electrical infrastructure and other factors.

Lenders can then apply the data gathered in the study to the building types to determine the potential savings and check the veracity of the energy audits. It also allows lenders to identify those buildings that would have the greatest increase in efficiency, and therefore the largest drop in costs, from an energy efficient retrofit.
To make them more comfortable using projected savings from retrofits, a public-private partnership started this year, the New York City Energy Efficiency Corporation, is planning to dedicate a portion of $37.5 million in federal stimulus money to provide collateral guarantee these deals. If a lender agrees to underwrite a loan and incorporate potential energy savings from a retrofit, the partnership will repay that loan should the projected savings fall short.

These efforts come at a time when New York City has been pushing environmental initiatives. The City Council has instituted laws requiring that buildings of more than the 50,000-square-feet benchmark compile and share information regarding their energy efficiency, and that every 10 years these buildings perform an energy audit. ...

by Julie Satow
The New York Times
November 8, 2011

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