Go With the Flow: Clean Water Expert on Sustainability, Value Creation
- Jul 12, 2021
Sustainability awareness has been on the rise in recent years. In the wake of the solar industry’s remarkable performance over past decades, increased attention is now being paid to water—and especially to wastewater reuse. Current conditions require it, particularly in the context of wildfires and related droughts in California.
In 2015, San Francisco implemented the requirement for new, large buildings to install and run water reuse systems that recapture dirty water from pipes and rainwater and use it for flushing and irrigation.
Innovative entrepreneurs got to work and one of them is Aaron Tartakovsky, CEO of Epic Cleantec, a San Francisco-based startup that converts wastewater into natural, carbon-rich soil and water that can be recycled for toilet flushing, irrigation and other non-potable uses. He discussed the company’s innovative path—developed along with his father, Igor Tartakovsky—as well as its latest endeavors in a conversation with Commercial Property Executive.
Epic Cleantec’s technology is part of the Bill and Melinda Gates Foundation’s “Reinvent the Toilet Challenge.” Tell us more about this part of your journey.
Tartakovsky: Epic Cleantec was born nearly a decade ago out of initial work with the Gates Foundation. The stated goal of ‘Reinvent the Toilet Challenge’ was to design a toilet solution for the roughly four billion people worldwide who lack access to basic sanitation.
We realized that the technologies geared toward satisfying the challenge—which was to create decentralized wastewater solutions independent from a centralized system of underground sewers and large treatment plants—also had applicability in the developed world, including in our urban centers right here in the U.S.
Many cities continue to rely on water and sewer infrastructure built some 30 to 100 years ago and, as a result of decades of deferred maintenance and budget cuts, are facing massive price tags to upgrade and overhaul these aging systems. In metropolitan areas throughout the country, municipal utilities are increasing their water and sewer rates by 5 percent to 10 percent each year to fund these critical repairs and upgrades. Our customers, real estate developers and owners are encountering these large shifts through both pre-development fees as well as rising monthly water and sewer bills.
This need to enable cost-effective, modern water infrastructure was the spark for Epic’s founding team, which then developed an on-site water reuse approach that can help a building reduce its annual water demand by up to 95 percent. In addition to meeting the need for more resilient, decentralized infrastructure, Epic systems can also save owners hundreds of thousands of dollars annually on their water and sewer bills.
Tell us more about the technology.
Tartakovsky: By capturing and processing a building’s wastewater—either black or gray—the system produces three outputs: recycled water for nonpotable applications, such as toilet flushing, cooling tower makeup, irrigation and laundry; recovered waste heat energy; and repurposed organic solids for use as a natural, carbon-rich soil amendment.
Developed in partnership with CB Engineers, a national MEP design firm, the Epic systems can process flows ranging from 5,000 to 200,000 gallons per day, ideally suited for projects of 100,000 square feet and above. Finally, our systems meet the strictest local, state and national regulatory standards, including Title-22, NSF-350 and San Francisco’s Article 12C mandate requiring on-site, nonpotable reuse of wastewater in new buildings.
What are the requirements for your system? Can it be installed in any building?
Tartakovsky: The systems we deploy are best suited for new construction due to the need for reclaimed water pipes (i.e., purple pipes) to transport recycled water and to maximize our ability to reduce upfront water and sewer impact fees. That said, retrofits are possible in certain scenarios, especially where there is an opportunity to use the recycled water for irrigation and cooling tower makeup water.
The first part of our development process always starts with a feasibility assessment, where we conduct a basic water budget calculation and determine the permitting strategy in a given location. We always give an honest assessment of whether an Epic Cleantec system is right for a building owner and whether there is a compelling return on investment for our client within a standard 3-to-5-year payback period. We can deliver and operate a custom system that is adaptable to several different types of buildings, which maximizes impact and minimizes footprint.
Our expert engineers provide comprehensive drawings and specs for the building and engineering team and manage all permitting efforts with local regulatory authorities in-house. We oversee the installation process, oftentimes working with local installation crews and unions, to ensure each job is completed in time and on budget. When the installation is done, we handle all the commission testing and paperwork and then continue to ensure operational performance through a combination of 24/7 remote monitoring as well as regular, in-person preventive maintenance and tune-ups.
Our goal is to simplify the entire water reuse process. Our team’s collective experience spans water technology, building design, project finance, policy and operations—a combo that leads to making our clients’ goals a reality.
Burgeoning markets such as San Francisco, Los Angeles and Austin, Texas, are mandating water reuse systems for large buildings. Can you describe these policies and the impact Epic’s technology can have on the real estate industry?
Tartakovsky: In 2014, Los Angeles mandated that cooling towers in all new buildings over 25 stories must use at least 50 percent reused, nonpotable water, including treated blackwater.
Since 2015, San Francisco has made on-site water reuse systems mandatory for all new construction of more than 250,000 square feet of gross floor area. There is currently a bill in the works to lower the minimum to 100,000 square feet, which would significantly expand the market. Starting in 2017, any building in San Francisco with an on-site non-potable water reuse system became eligible for adjusted water and wastewater capacity charges.
The California State Legislature has ordered the State Water Board to create water reuse standards to support cities in creating local water reuse programs, notably planning to update Title-22 standards with SB 966.
Most recently, beginning in 2020, water reuse systems in Austin, Texas, that replace 1,000,000 gallons or more of potable water per year are eligible for program funding up to $250,000; systems that replace 3,000,000 gallons or more of potable water per year are eligible for program funding up to $500,000.
In terms of how this impacts the real estate industry, we have seen a significant shift in tenant interest toward sustainable buildings over the past decade. Today, nearly 60 percent of building owners nationally are planning to make the majority of their assets “green.” Access to capital is becoming easier for real estate companies that fully embrace ESG standards, both for reasons of sustainability but also, most exciting for us, for reasons of long-term value creation.
What are the associated costs of the technology and the estimated ROI?
Tartakovsky: As with many technologies involved at the building scale, the costs for an Epic system depend largely on the system size, which varies based on building size, property type and water volume. We are currently working on a 19,000-gallon system that will serve 300 multifamily residential units and another that is 80,000 gallons serving a planned tech campus.
We aim for the return on investment to be within 3 to 5 years. In terms of ongoing maintenance, Epic works with clients to provide ongoing service on systems and can also offer financing for those interested and eligible.
At this point, who are your clients, and how does the project pipeline look?
Tartakovsky: High profile clients include: Crescent Heights’s 45-story building, NEMA, in South of Market, San Francisco, as well as Related California’s building, Fifteen Fifty, in downtown San Francisco—live as of April 2021. We have many more projects in the planning stages in the Bay Area, in California and across the U.S.
“Deciding on a water reuse solution for our projects is a critical part of our overall strategy. Epic Cleantec delivers high-quality engineered systems, end-to-end service and expertise in permitting that help to simplify the entire project for our team. We’re thrilled to work with Epic to both lower our operating costs and to make a serious water conservation and sustainability impact, particularly in the face of this current California drought,” Phoebe Yee, senior vice president for design at Related California, told CPE.
What is the most challenging part of getting people to pay for and use such a system, which basically decentralizes wastewater treatment, turning each building into its own water recycling plant?
Tartakovsky: Our team views the current state of the water reuse market to be similar to the challenges faced by the solar industry 10 to 15 years ago: It’s a new technology, it’s a new set of suppliers and it’s oftentimes difficult to project out a pro forma on commodity costs years into the future.
Fortunately for us, developers across the country have personally experienced the incredible financial and societal benefits that have already emerged from the growth in the solar rooftop industry. As water rates continue to rise at rates double or triple that of energy, we have seen incredible demand as developers and owners reach out to us to help think through how to replicate their past energy efficiency investments.
Rumor has it you’re planning to launch a philanthropic arm that’s designed to address sanitation challenges outside of California and abroad. What’s the status of this endeavor?
Tartakovsky: Yes, we are establishing a vehicle to provide philanthropic support to communities and organizations that need help addressing their water and wastewater challenges. We are currently working with a number of universities, nonprofits and businesses on strategies to deploy water and wastewater solutions into communities that most require help.
We’re firm believers in the idea that business should be a force for good and we are on a mission to develop a wide-ranging menu of water reuse solutions for the modern world.