Creating Equity with Energy Efficiency: Empowering Communities and Promoting Sustainability

Hi everyone. As we continue our blog series, this episode will dive into the basics of turning energy efficiency into resiliency, cash flow and equity. A win-win for everyone!

In an era of growing environmental concerns and increasing focus on social equity, energy efficiency emerges as a powerful tool for creating a more sustainable and inclusive society. Beyond its environmental benefits, energy efficiency initiatives have the potential to address socioeconomic disparities, reduce energy costs, and improve living conditions for marginalized communities. This blog post explores the intersection of energy efficiency and equity, highlighting the transformative impact it can have on communities while fostering a more sustainable future.

1. Understanding Energy Efficiency:To embark on a journey toward equity through energy efficiency, it’s crucial to grasp the concept itself. Explore the fundamentals of energy efficiency, its impact on resource consumption, and the potential for reducing greenhouse gas emissions. Gain insights into energy-efficient technologies, building practices, and the importance of behavior change in optimizing energy use.
2. Measure: Conduct an Energy Audit of the subject property to create an energy blueprint.
3. Reduce: Implement energy conservation measures (ECM)
4. Offset: Add onsite renewable energy systems.
5. Education and Outreach:Educational initiatives play a vital role in promoting energy efficiency and fostering equity. Discuss the significance of education and outreach programs aimed at raising awareness about energy conservation, providing energy-saving tips, and offering resources for accessing energy efficiency incentives and programs. Highlight the importance of community engagement, partnerships with local organizations, and the role of energy efficiency ambassadors in spreading knowledge and empowering individuals and families.

Here is a simple case study of how this process works:

Multifamily Property #1

• Location: ???, Texas
• Size: 100 Units (50,000 sf)
• Style: Garden w/ pitched roof
• Mix of 1 bd and 2 bd apartments
• Annual Energy bill: 762,000 kWh/yr (U.S. Energy Information Administration estimates avg. electricity usage per month for a 1/2 bd apartment at 635 kWh)

Your energy audit has revealed multiple energy reduction opportunities including: replacement of aging HVAC equipment for new high efficiency heat pump air-conditioning units; replacement of old fluorescent fixtures with high efficiency LED lights, occupancy sensors and time clocks/daylight sensors (common areas, parking lots) and replacement of old single pane windows with high efficiency insulated double pane windows.

After implementing your energy reduction plan you reduced your property’s total electric bill by 35% per year (266,700 kWh). To offset the costs of your investment you take advantage of $15,000 in rebates from your utility company (est. at $150 per unit), $400,000 in tax credits from the Inflation Reduction Act of 2022 ($4,000/unit; max $400,000) and $5,000 in maintenance cost reduction ($50/unit). After savings, our estimated construction costs of $600,000 ($6,000/unit) are reduced to $180,000. With an annual savings of $40,000 in utility costs your ROI is 4.5 years. For my multifamily operators remember that you not only reduced your expenses by $45,000 per year, you INCREASED your NOI by that amount.

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Using the 1:9 rule ($1 per cashflow = $9 in equity), that is a $360,000 increase in equity. This is only the start, your value add also includes….

• Improved resiliency = happy tenants and less maintenance.
• Improved living environment = happy tenants, and marketing that elevates your property
• Reduced utility expenses = less vulnerable to cost escalations

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Let’s break down what we did to achieve our energy reduction of 35%….

Building Envelope: This is the hardest component of an existing building to improve easily and as such you should expect to have extended Return of Investment periods. In many cases you will see no return when done solely on there own. Building envelope enhancements like insulation (wall and roof) and insulated windows provide their greatest value when tied to other building enhancements.

• Insulation can be replaced cheaply when replacing a roof. In southern climates with more annual sun, this can greatly improve HVAC system operation.
• Windows can be done fairly cheap and there are many rebates out there. Installing the right window with low-e coatings reduce radiant heat from the sun and minimize glares not only improve indoor health conditions but can have an even greater impact on the size of air conditioning systems. The cost of new windows will typically pay for the reduction in cost / size of a right sized HVAC system. Dual benefits!!!!
• Understand the orientation to the sun before choosing a window specification. Do you have external shades that can influence your decision. What are your outdoor conditions in summer and winter. Insulation (U-value) of a window is important for large temperature differences from inside to outside
• Quick Tip: Focus on dual pane, low-e coated glass with insulated fiberglass frame.

Lighting: Lighting systems are critical to our health, our safety and can have a major influence on energy. There are countless lighting fixtures out there that make retrofitting and/or replacing outdated fluorescent very easy. LED’s will last longer and use on average 75% less energy than the incandescent/fluorescent it replaces.

• Use time clocks or photo sensors for outdoor lighting.
• Use occupancy sensors in stairwells, laundry rooms and other common area spaces. Quick Tip: occupancy sensors do not have to turn lights full off to be effective.
• Pay close attention to light color temperature. Warm light (1800 – 2700K) is better for bed rooms, living rooms and other areas where you are relaxing. Cooler light (4000k +) is ideal for high productivity areas like offices, gyms, etc. Color temperature can have a big impact on a persons health and the circadian rhythm.
• Quick Tip: Light color temperature dos not compensate for the wrong brightness / intensity. Look for Energy Star rated equipment.

HVAC: HVAC equipment is critical to creating healthy environments for building occupants. They are also one of the largest consumers of energy and contributors to CO2 release in the US. Many changes to HVAC system types make retrofitting easier and more beneficial than in the past.

• We like heat pumps that use refrigerant for heating and cooling. Equipment efficiency has increased 150% over 20 years. ASHRAE 90.1-2001 minimum split system SEER (seasonal efficiency ratio) was 10.0 and today ASHRAE 90.1-2019 sets a minimum SEER of 15.0.
• Heat pumps are 2x+ more efficient than gas fired equipment in heating, reduces carbon emissions and improves local air quality
• Quick Tip: Look for Energy Star rated equipment and systems with variable speed compressors for maximum value. We focus on ductless mini splits for their retrofit ease and high efficiency.
• Quick Tip: Replace equipment that is 10 yrs or older for best value.

Quick Tips:

• Use current energy codes to help guide your decisions for lighting power, hvac, etc. Your decision today should be in place for 15+ years.
• Use competent technical consultants/contractors with proven experience to help guide you through the process. The wrong contractor will hold you back.

Your specific project will have many more steps, but we hope you can see the opportunities that are available you. Doing better and doing right creates Spiral Compounding Value Add.

Take control to take a step forward. Our next blog will cover Step 3 of our process: Offset – supercharge your property.