How Smart Building Controls Pay for Themselves

Warren House, a 330-unit post-war condo in Murray Hill, was staring down rising utility bills and Local Law 97 fines. What happened next offers a blueprint for other buildings facing similar pressures. Robert Post, vice president of co-op and condo at Parity, walks through the challenges Warren House encountered with their fan coil heating and cooling system, the technology solution they implemented, and why their first-year results blew past initial projections. He explains their approach of optimizing existing systems rather than replacing them, and details why collecting data throughout the building can be an invaluable asset for future planning. The conversation offers an inside look at how smart automation is transforming building operations, all while keeping residents comfortable and budgets intact. Habitat’s Emily Myers conducts the interview.

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Transcript

Emily:

Welcome to Problem Solved, a conversation about the challenges facing New York co-op and condo board directors. I'm Emily Myers with Habitat Magazine, and I'm joined by Robert Post, vice president of co-op and condo at Parity.

Robert, great to have you.

Robert:

Thanks for having me. I'm really excited to chat with you.

Emily:

So we're going to talk about efforts to comply with emission caps under Local Law 97, and we'll discuss a solution for buildings with central heating and cooling systems, and why tackling energy efficiency isn't just about emission control, but also about managing utility costs.

So let's kick off the discussion with a look at Warren House, a 330-unit post-War condo in Murray Hill. Robert, what specific problems or challenges were the board facing when they approached you?

Robert:

Yeah. So, common challenges for a lot of boards is navigating Local Law 97, having insights to their systems that historically don't have controls or any ability to monitor the base building equipment to see if anything goes wrong. So they're really looking for a way to avoid fines or get ahead of Local Law 97, give the resident managers some insight and some tools to run the building better. And then also the rising utility costs. Everybody sees that there's a rate case coming from Con Edison, so every year the gas and electrics have been getting more expensive. They're trying to offset that, and that's why they've came to us to help try to solve some of those issues.

Emily:

So can you just describe the condos' heating and cooling setup?

Robert:

Yeah, absolutely. So this is a white brick fan coil building. You'll see a lot of these around Manhattan. They were built in the 1960s, most of them. The way that it's laid out is, there will be a cooling tower, there's a chiller, there's a boiler, and then there's also a pump circulating hot water or chilled water to fan coil units in the apartments. So what a fan coil unit will do is it collects... The water will run over a coil, and depending on the season, in this case it's a two pipes, meaning in the wintertime they can get hot water over that to provide heating, and in the summertime they can get cooling through chilled water. So what we're doing in the building is controlling the distribution and the set points for that hydronic loop.

Emily:

Okay. So were the board's main concerns the emission caps under Local Law 97, or was it rising utility costs?

Robert:

I think it was even, right? They're both financially obligated, right? One is for fines and basically a carbon tax, and the other is you got to use utility and it's getting more expensive. So I don't think it was one or the other. I think it was just a combination of getting hit in the wallet, and nobody likes to do that.

Emily:

So can you just outline some of the changes that you brought in to the building, and the technology that you introduced?

Robert:

Yeah. So what's unique about Parity is all of our hardware is non-proprietary. So we came in with off-the-shelf products. So what we did was we hooked up variable frequency drives to a lot of their pumps in the basement, and also on their ventilation system. We put in control panels to allow us to give this what we call a read-write capability, which allows us to pull data from the building, analyze that data, and then what's unique to Parity is we can send signals back now to that equipment, to change set points, change motor speeds, and things like that. So it was controls on the equipment, sensors, control panel, and... Yeah. That's basically it on a high level.

Emily:

Okay. And so just being a little bit more granular, what savings did that bring the building?

Robert:

Yeah. So we projected that we were going to be able to save them around $40,000 a year, but in the first year we actually saved them over $80,000. And in terms of fines, we helped them avoid about $49,000 worth of fines if they were to be exposed in the first threshold, which would be 2024 to 2030.

Emily:

Okay. And what was the cost then to bring in your equipment?

Robert:

That's a good question. Give me a second. I don't have that number right at the top of my head. Give me a second, I can look it up. Apologize.

Emily:

[inaudible 00:05:25]

Robert:

Okay. So the equipment that we were installing was 143,000. That includes installation of the hardware, it includes commissioning, programming, all turnkey. But what's really unique about Parity is we also do all the filing for the incentives, and actually guarantee our incentive procurement. So we estimated that we'd be able to procure $100,000 worth of incentives. So the actual cost to the building was only 42,000, but they've got a value of 143,000 worth of equipment, engineering, and programming work for that 42.

Emily:

Okay. And is the installation fairly simple? You talked about non-proprietary and proprietary equipment, and just for people who perhaps don't understand that terminology, it's my understanding that non-proprietary equipment is, for example, a brand that you might recognize, whereas proprietary equipment would be equipment built by the specific company, so like Parity for example. And you use, like you say, branded equipment. It might be sensors that you could get off the shelf.

Robert:

Exactly. So there's no Parity branded equipment. It's all Honeywell, ABB, off-the-shelf type of products. So, yeah, the installation's pretty simple. We have electricians come in that work with us that install the equipment into the mechanical rooms. The installation takes a couple weeks, not very long. And then we do a period of programming and commissioning, which could take a month or two, to where we really understand the nuances of the building. We're pulling data, we're not deploying our logic yet, just to get a good commissioning period to understand the nuances of the building before we start. Because last thing we want to do is disrupt anyone's comfort. The whole motto of what we're doing is, we're getting the most out of your system. And when people are calling for heating or cooling, they're getting it, but when they're not, we're not oversupplying the building with those utilities.

Emily:

And you mentioned the cost of installation and the incentives, but there's also an ongoing fee for your managed and monitored services, is that right?

Robert:

Yeah. So it's custom to every building. So our setup, our installation's all custom. The programming's custom. It's not one size fits all. And the service fee is custom. So in this case, the service fee was around $12,000 a year. And what's included in that is they have obviously us optimizing their HVAC system. That's the main part of our service. But what we're also able to do is we're also able to do demand response automation. We give them quarterly reports on how our savings is going. They have access to our on-site engineers. I mean, they have access to our HVAC engineers either on-site or over the phone. If we have to send somebody out as many times as necessary, it's all included in our service.

Emily:

Okay. And just demand response is obviously the opportunity to generate revenue by bringing down your electricity consumption during those peak summer moments when electricity is very expensive.

Robert:

Yeah, that's right, Emily. So historically, we're not an aggregator. So you'd be signed up with somebody who's an aggregator for demand response, but if you are... The resident manager of the building staff will just get a text message 24 hours in advance, and then it's a manual process. They have to remember in that three-hour window or four-hour window to run around and change speeds and turn things off. Well, if Parity's in the building, we'll get that text message, we can schedule it where it's all automated, and it just takes that human error out of it to maximize the incentives -- I'm sorry, the rebates. But also, we can pre-cool the building if we know an event's happening, so that nobody's discomfort is compromised -- comfort's compromised.

Emily:

So the technology basically provides a much better insight to the resident manager, and actual help to the manager as well?

Robert:

Yeah. I mean we're... They're so busy, and they have so many things to do throughout the building. You can think of us like an engineer, and every piece of equipment, every five minutes, making a micro-adjustment to make sure that supply meets demand. That's where Parity comes from, the name. And yeah, we're just trying to free up some time and save some energy that way.

Emily:

So what are some of the key takeaways then for other boards looking to comply with Local Law 97 and work on resident comfort, as you mentioned?

Robert:

Yeah. So HVAC systems are historically the biggest energy draw of the building, right? A lot of low-hanging fruit with LED lighting has most likely been done in most buildings. The next step is typically building controls or HVAC controls, where there's good incentives for it, it directly impacts the most electrical or thermal loads in the building, where you can optimize what you currently have without having a huge retrofit. There's generally two avenues. You can go and do a huge capital investment project where you're ripping out chillers and boilers and pumps and replacing them, but a lot of them still have a lot of life left in it. So our motto is, get the most out of your existing system now, and when it's time to improve the system, when the life is over with, you have the ability to do so, and you have all the savings from your current system that you can go towards that new system with, if that makes sense.

Emily:

So are you working with buildings with a focus on 2030 emission reductions?

Robert:

Yeah, absolutely. I feel most buildings are facing some sort of fines in 2030, that we're talking to right now. And it's a major concern, because before you know it, it's going to be here. And it's not like it's a one-size-fits-all solution. Every building has unique situations, and we're just one portion of the puzzle piece to get you where you need to be.

Emily:

And do you have idea of what Warren House is... Do you have an idea of what the next step is for Warren House?

Robert:

In terms of their fine exposure? Or-

Emily:

Well, in terms of your involvement, and you're talking about... Obviously you've installed boiler controls and sensors, but that only gets you presumably so far.

Robert:

Yes. Yeah. So typically what we'll do is we're collecting data on the system. Parity only does one thing, and that's building controls. So we're not coming in and doing Local Law 97 studies or filings or things like that. But what we do offer is support to those companies that do, because we have now real-time data, over a few years in this building now, that we can supply to an engineer doing that type of study, who can then recommend, based off of real data, the next steps, whether that's replace a piece of equipment with a smaller piece of equipment because the larger one is not necessary for the loads in the building. So we're ongoing support. But for Warren House specifically, I don't know their future plans, but if they did need our help in future planning, that's part of what we also provide to their engineers with that data.

Emily:

But what you're saying is that the data provided by... The data gathered, perhaps, by Parity does provide information on the best route forward for buildings?

Robert:

Yeah, absolutely, especially with capital equipment investments, because these buildings were designed in the '60s, and they may have a different... Or this building specifically, and it may have a different functionality 60 years later, and that equipment may not be big enough or oversized. And we have real insight rather than, if you didn't have our system there, you would just do a carbon match. You would just say, okay, this was the chiller beforehand, let's replace it with the exact same chiller, because that's what was spec'd out originally. Now you have a little more insight to get flexible and say, is that really how the building's using this now?

Emily:

Great.

Robert:

And is that what it needs?

Emily:

Robert, great intel for boards. Thanks so much.

Robert:

Hey, I really appreciate you having me, and thanks, Emily.

Emily:

Robert Post, vice president of co-op and condo at Parity.