New opportunities in alternative energy make conservation practical and profitable.
It’s becoming increasingly common. More and more, apartment owners and operators are incorporating various conservation methods harnessed by alternative energy sources, and the growing trend can probably be attributed much more to the dollar sign than environmental stewardship. As tenant preferences become greener and energy cost savings become more of a necessity than a bonus, property owners are growing ever more eager to utilize alternative energy sources for the benefit of the bottom line.
Sun. Water. Wind. When it comes to alternative energy sources, owners most frequently rely on the sun to increase the level of green at their properties—and in their pocketbooks. The sun, harnessed through photovoltaic solar panels, is perhaps the most commonly utilized form of alternative energy in the multifamily industry, and the feature has proved successful in reining in electricity costs. Solara, a 56-unit affordable housing development in Poway, Calif., opened in 2007 with a 141-kilowatt, grid-tied PV system and the title of the Golden State’s first apartment community designed to be powered entirely by the sun. According to a study by national environmental group Global Green USA, during the property’s first year, 87 percent of the property’s electricity needs were met by the PV system, and the average per-unit electricity bill was 68 percent less than that of neighboring affordable housing properties.
It’s not a fluke. At Pietra Apartments in Phoenix, the numbers tell the same story. Owners Wood Partners and Westplan Investors installed a 47,000-watt solar array adjacent to the building in August 2011, and thus far, the system is offsetting approximately 90 percent of the electricity required to power the building’s common areas.
“Without question we have definitely seen a savings,” says Jay Dassele, asset manager with Mark-Taylor Residential Inc., the firm that manages Pietra. The system has played a role in maintaining a high occupancy level and, therefore, maximum cash flow. “People are very much into the green initiative in Phoenix, and I think the solar array’s marketability has been very beneficial for Pietra.”
There’s a new trend afoot in the use of solar panels in commercial buildings, and it may very well take root in the multifamily world. Let there be light—and hot water. “We’re seeing more interest not only in solar thermal, which is a system that converts sunlight directly to hot water, but we’re also seeing an increase in hybrid systems that use both solar PV and solar thermal,” Eric Bloom, a research analyst with Pike Research, noted. “That hybrid of electricity and hot water is a pretty appealing combination.”
But the buck doesn’t stop with the sun and water. For those property owners who really want to step outside the box, the wind certainly has its uses. North Campus Housing Phase II, an 806-bed, on-campus student housing community at the University of California–San Diego, has wind scoops to both capture the cool breezes flowing off the Pacific Ocean and direct them into the apartment units. Blue Sea Development Co. took wind to a higher level, literally, in 2009 with the installation of energy-generating wind turbines on the rooftop of Eltona Apartments, a 63-unit affordable housing property in the Bronx in New York City.
However, it is solar energy that most multifamily property owners will turn to in the alternative energy arena in the future. “There aren’t too many other blockbuster technologies that are going to come in and change the game, so solar is and will continue to be the main renewable energy technology,” Bloom said. “Renewable energy as an industry is one that is all about taking existing technologies and making them better.”
And that’s what the future holds—more of the same, but better. At the U.S. Department of Energy’s National Renewable Energy Laboratory, researchers are using high-performance computing in their efforts to design new materials that will improve solar cell performance by leaps and bounds.
Of course, you have to spend money to save money, and some energy-efficient methods are cheaper than others. Adding wind scoops to a building design is a drop in the bucket compared to installing solar panels. Overall, however, the number of developers and owners who see the long-term value in making the upfront investment in alternative energy features continues to rise. A few factors make the use of renewable energy at apartment properties increasingly popular—namely, the decrease in product costs as time passes.
In a revised report release in February, the American Council for an Energy-Efficient Economy forecasts a 17 percent system price reduction by 2020 for the installation of solar water heaters. Secondly, state and federal governments are providing more grants in an effort to promote widespread energy efficiency. Eventually, the use of alternative energy in any number of forms will be de rigueur at multifamily properties. “I think it’s a fun thing to talk about,” said David Hilliard, president of Symphony Development, developer of the über-green West 27th Place student housing property near the University of Southern California in Los Angeles. “I think it’s a great idea, it’s exactly what we should be doing.”