There now exist many funding opportunities for high efficiency HVAC and alternate energy projects. Those opportunities include grants, tax incentives, utility rebates, and low interest loans. The key for the commercial HVAC contractor is to find the right financial vehicle for each sustainable energy efficiency project, and balance available incentives with operational and maintenance savings, to meet the end users' needs. Sometimes it takes a combination of incentives to favorably push the return on investment high enough to motivate the customer.
High efficiency HVAC upgrades can be combined with other energy components, such as efficient lighting, plug load management, building envelope enhancements, water efficiency and land management, all of which holistically develop the end game of saving dollars while preserving the environment.
In the presentation, "Better Than Free Energy," given during the Contracting Business.com 2011 Commercial HVAC Symposium — held during Mechanical Systems Week — Bob Tudi, CEO, and George Gittinger, Design/Build manager of TUDI Mechanical, Inc., Pittsburgh, PA, provided numerous examples of the firm's alternative energy successes, and the funding vehicles for those projects. Examples of TUDI’s alternative energy and high efficiency HVAC solutions includemicro-turbines, solar, geothermal, energy recovery, net zero energy, and more.
In commercial Design/Build, TUDI Mechanical gravitates to application-specific technologies, such as alternative energy and energy management. It relies on a specified energy management department that works to integrate those synergies within the company.
Solar Shines for Retirement Facilities
The Ross Hill Retirement Facility was completed with the help of $210,000 from a Pennsylvania Energy Harvest Grant, through the Pennsylvania Environmental Protection Agency (EPA).
"We put that money into solar heating for the facility," Tudi explains. "We shut the boilers off in April, and don't have to turn them on until late November."
"The PA EPA will fund grants in various sectors such as renewable energy or energy conservation," adds Gittinger. "They'll often provide low interest loans or grants, depending on the project and scale of work. We had someone write the grant, which provided enough money to pay for the work and installation."
For another retirement facility — South Hills — TUDI again assembled performance data for a grant writer (which, by the way, is recommended. Grant writing can be an arduous process, Bob Tudi says).
In return, Tudi Mechanical obtained a $500,000 grant that included a 65,000 watt micro-turbine and a 30,000 watt photovoltaic array on the roof, at no cost to the end user.
Finding the Money for Geothermal, Makeup Air
Law & Finance Building — for this 20-story high-rise in serious need of an energy upgrade, Tudi acquired a Sec. 179 EPACT tax deduction for the client. The Emergency Economic Stabilization Act of 2008 extended the Energy Efficient Commercial Buildings Deduction through December 31, 2013. This legislation offers a tax deduction of up to $1.80 per sq.ft. to those investing in energy efficient improvements placed in service after January 1, 2006.
O’Neal Steel —This 150,000 sq. ft. steel fabricating facility required a new makeup air unit. With the help of $74,000 from a Sec. 179 EPACT tax deduction Tudi upgraded the entire heating system, including a Cambridge high temp direct-fired furnace, with efficiency higher than ASHRAE 90 standards, which is a prerequisite of a Sec. 179 EPAC.
Saxonburg Medical Buildings — The owner of these two buildings wasn't sure in which comfort direction he wanted to go, conventional or geothermal. "We suggested geothermal," Tudi says. "However, it was at a cost of $1.1 million, compared to $600,000 for a conventional system. Fortunately, we kept finding extra funding dollars. George Gittinger searched the Internet for 'geothermal rebates,' and found all this money. By the time we were done with the after-tax cash flow, it had become the first geothermal job we sold on a return on invested capital," Tudi recalls.
"The owner obtained $120,000 from a Sec.48 IRS energy tax credit; $400,000 was available from a Sec. 168 IRS modified accelerated cost recovery (MACR) tax benefit; and $150,000 from a Pennsylvania EPA renewable energy program loan with a 1% interest rate."
With an MACR, the capitalized cost — or basis — of tangible property is recovered over a specified life by annual deductions for depreciation.
Many Opportunities; But Proceed With Caution
Tudi says commercial HVAC contractors can travel many alternative energy roads. "If you’re interests lie in alternative energy, there are a million places where you can find opportunities to pull the data together to get funding," he advises.
"We're starting to see others pick up on these methods, however, the barriers to entry are tough," Tudi warns, and he issues a caution about pricing.
"A home furnace replacement is commodity driven, and not as sensitive to pricing. But when you get into the higher end projects, that's where you must protect your interests as far as correct pricing. The training can be arduous, as well. Once we install it, we maintain it and service it, which requires training time and money."
Jewel in TUDI’s Efficiency Crown: Sota Construction
One of the best examples of TUDI Mechanical Services' recent innovations in energy efficiency is found in the offices of Sota Construction, Ross Township, PA. This new, 7,500 sq. ft. office building is a model of the most sustainable, state-of-the-art building technologies available. The facility is a registered United States Green Building Council (USGBC), Leadership in Energy and Environmental Design New Construction Project (LEED NC). It’s anticipated to achieve a LEED Platinum rating, and could rank as one of the first Platinum LEED NC buildings in Pittsburgh. The project has also earned a 2011 Contracting Business.com Design/Build Award (see http://bit.ly/cbtudisotaproject).
Key advanced technology building components encompass the ultra high efficient thermal envelope, natural building materials with thermal mass and hygric features, biophillic space, air-to-air energy recovery, radiant slab cooling and heating, and closed loop geothermal with “free energy” economizer cycle. Also taken into account for the low energy design are day lighting, occupancy sensors, natural ventilation and energy monitoring for benchmarking measurement and verification protocol.
Because of the critical dew point control required for radiant cooling, much related attention was focused accordingly. Key radiant cooling technology resources were utilized for additional design collaboration.
The building energy systems have proven extremely efficient. During the first cooling season, the geothermal economizer system was able to provide for the entire cooling demand, without the use of standard cooling compressor technology. It's estimated that along with the other high performance building systems, this building will only require 20% of the energy normally required by similar office facilities. This equates to an environmental benefit of 180,000 pounds of CO2 avoidance.
Further plans are underway to achieve net zero energy status. With the addition of solar PV panels, the already diminished annual energy consumption will be reduced to net zero with an offsetting renewable solar power generation component. By monitoring power consumption and integrating control optimization, proper selection of solar panel kW will be allowed.
From start to finish, this extreme example of green construction typifies all of the attributes of sustainable development and integrated processes.
Sota Construction Services’ employees will enjoy the benefits of low- to net-zero energy, and a healthy and productive office space, while contributing to environmental stewardship.