There’s no other way to put it—efforts to spark greater energy efficiency for multi-housing buildings just make sense. Investments in energy efficiency deliver more than just considerable cost savings for residents and property owners; they increase property value and decrease environmental impact by eliminating waste, outdated systems and other inefficiencies.
Right now, New York is the uncontested leader in the movement toward greener buildings through subsidies, incentives and a growing commitment to upgrading outdated energy systems. But, many of the city’s and state’s initiatives are serving as models for municipalities elsewhere to adopt to spark greater fuel efficiency and promote energy-efficient green multifamily buildings across the United States.
Data collected from FS Energy, a subsidiary of FirstService Residential show that its energy efficiency measures have contributed to more than $25 million in savings and a 15 percent reduction in the carbon footprint of FirstService Residential’s New York portfolio since 2010. On an annual basis, FS Energy procures (energy purchasing) approximately 275 million KWH and 20 million therms of gas, contributing to a 10.5 percent and 8.4 percent cost reduction on natural gas and electricity, respectively. Additionally, FirstService Residential and FS Energy perform annual benchmarking in New York, Pennsylvania, and Chicago. This generates data for year-over-year consumption comparisons between similar buildings and provides opportunities for weather normalizing the data and providing an analysis for each building with opportunities for energy efficiency and savings.
While these advantages may seem like no-brainers from a property management point of view, it often takes a sustained push to make these energy efficiency changes happen. It is not a quick fix or a one-time project, but knowing where to start and where your properties stand are essential. Here are some key first steps property managers and owners can take to help realize these savings and benefits for properties in their portfolio.
Know Your Energy Rating
Firms with expertise in energy management can objectively evaluate and compare building energy systems. FS Energy, for example, can calculate a property’s Building Energy Rating Guide (BERG) score. This proprietary score helps boards and property managers see where they stand overall, and how their building’s energy performance compares to 450 other buildings in FS Energy’s database. Basically, the lower the BERG score, the more improvements a building can potentially make.
Interestingly, the FS Energy team has seen that as a building’s energy efficiency increases, the appeal for greater energy efficiency grows stronger with association boards to consider further investments. Buildings with lower energy efficiency ratings—those that can typically save more by employing energy-saving tactics—tend to be less open to energy upgrades and improvements. Property managers can leverage this information to inspire change in energy-inefficient buildings by challenging the board to “up its game.”
Find an Energy Champion
Property managers should encourage buildings to launch projects that makes sense to improve energy efficiency, including retrofitting and new capital improvement projects. It’s best to start with simple initiatives that have a return on investment of five years or less, and save 20 percent or more. For example, converting all common-area lights to LED can save 20-50 percent off the common area portion of the electric bill and typically pays for itself in one to three years.
Another effective initial strategy is to assign a champion. Choose a resident board member enthusiastic about “greening the building” and empower him or her to convince others to act. Next, work with this champion and the rest of the board so they know their building’s energy strengths and weaknesses. While a professional energy audit can determine priorities for improvement, information on its own is often not enough. To truly motivate a board to invest in modernizing their energy systems, try comparing how they are doing to peer buildings.
Follow the Incentives
The time and effort put into researching city, state and federal financial incentives can pay off in terms of savings down the road. In New York City, for example, Con Edison provides energy equipment rebates for multifamily buildings; it also offers incentives for LEDs, thermostatic radiator valves, and low-flow devices for certain housing units.
The New York State Energy Research and Development Authority (NYSERDA) offers two types of reduced-interest rate loans for qualified efficiency improvements, Smart Energy Loans and On-Bill Recovery Loans. NYSERDA also offers incentives for retrofitting or replacing existing systems, like outdated boiler systems. Property management firms, in some cases, can negotiate loan rates for energy upgrades on behalf of a building or developer.
Nationally, the Federal Energy Management Program (FEMP) tracks and catalogs available energy and renewable energy project funding by state. In addition, the U.S. Department of Energy’s Better Buildings Residential Network offers energy efficiency advice for multifamily buildings, including going after the “low hanging fruit” with direct installs of LEDs, energy efficient shower heads, aerators and more. Additional measures include installation of pipe wraps, thermostats and LED exit signs.
Of course, energy efficient measures should not—and cannot—only be about retrofitting. For this reason, many of the strategies outlined in this article also apply to developers of new buildings, including searching for financial incentives in advance, installing energy efficient lighting and devices, and working with an experienced firm as a partner. With historic buildings or new construction, it is worthwhile to get energy efficiency right to save money, boost property value and reduce the structure’s carbon footprint for years to come.
Tal Eyal is a founder and president of FS Energy, a subsidiary of FirstService Residential, North America’s largest manager of residential communities. FS Energy provides energy management and advisory services to the company’s clients in order to reduce consumption, costs and emissions while improving property values and quality of life. Since its creation in 2010, FS Energy has helped FirstService Residential clients save over $25 million in energy costs while reducing the carbon footprint of the company’s New York portfolio by more than 15 percent.