How Commercial Building Owners Can Leverage Cost-Effective Retrofitting

Dec 23, 2024,07:45am EST
Thomas Grizzetti, CEO, HT Materials Science

As we prepare to leave 2024 behind and look ahead to 2025, it’s important to recognize how far the commercial HVAC industry has come—especially as businesses across the world continue seeking our help in reducing operating costs, carbon emissions and, of course, energy bills. It’s also important to think about what more we can be doing—and about just how impactful and far-reaching HVAC efficiency improvements can be when implemented at scale.

Companies are adopting greener, more energy-efficient systems. Energy efficiency standards, like those set by ASHRAE, are crucial drivers. These evolving standards are forcing companies to rethink their energy strategies. Local laws, such as New York’s Local Law 97, are further driving the need for more aggressive energy-efficiency measures, ensuring that cities continue progressing toward their decarbonization goals.

I haven’t always been passionate about the HVAC industry, but after several decades of investing in companies across a variety of sectors, I began to fully grasp the HVAC industry’s need for both innovation and reduced environmental impact. Now, as CEO of a company providing simple retrofit solutions for commercial HVAC systems, I recognize that upgrading HVAC equipment or replacing it entirely is not feasible for most companies. The path to a more sustainable HVAC future doesn’t have to rely solely on capital expenditures. Instead, businesses can explore lower-cost innovations, retrofits and optimizations to existing systems to reduce energy consumption and improve cost-efficiency.

Sustainability Isn’t Just About New Equipment

Sustainability shouldn’t come with a blanket prescription to “buy new.” In my experience, smart retrofitting can yield immediate benefits, including reduced energy consumption, without the high costs and operational disruptions of replacing entire systems.

For example, instead of replacing an entire HVAC system, companies can install more efficient compressors, variable-speed pumps or upgraded controls to maximize performance.

Retrofitting also has the added benefit of extending the lifespan of current systems, giving building owners more time before they need to consider a costly replacement. And, perhaps most importantly, retrofits involve less disruption to daily operations compared to full equipment replacement.

The Double-Edged Sword Of New Refrigerants

One area where the HVAC industry is seeing mandated change is refrigerants. For years, traditional refrigerants like R-410A have been used in HVAC systems. However, these refrigerants are being phased out due to environmental regulations aimed at protecting the ozone layer. The next wave of refrigerants is less harmful to the environment in terms of emissions, but they often come with a trade-off: lower efficiency.

Refrigerants play a critical role in heat transfer, and as newer, more environmentally friendly options are introduced, I believe the efficiency of HVAC systems will likely decrease. This change may be problematic for businesses trying to reduce their carbon footprint and control energy expenses. That said, a well-planned retrofit can maintain or increase system efficiencies and avoid skyrocketing energy costs.

Understanding Efficiency And The Grid

One of the hidden advantages of making HVAC systems more efficient is the relief it provides to the power grid. Energy-efficient systems consume less electricity, helping reduce strain on local power supplies. This reduced consumption can help prevent rolling brownouts or blackouts, which are increasingly common as the demand for energy-intensive services, such as data centers, grows. Retrofitting commercial buildings with more efficient HVAC systems can benefit both building owners and tenants by reducing electricity demand (especially during peak periods) and operating costs over time while keeping building temperatures comfortable.

District Energy: An Overlooked Champion

One area where significant sustainability gains are being made is district energy systems. These systems allow for the sharing of heating and cooling resources among multiple buildings or even cities, making them significantly more efficient than standalone HVAC systems. District energy systems can capture waste heat from one building—such as a data center—and use it to provide heating to other buildings nearby. This energy recovery can create a circular energy economy, reducing the need for additional energy production.

Preparing Your Building For A Retrofit

In order to understand and prepare for a retrofit, building owners must first understand whether the technology is suitable for their buildings. To start, building owners should review the past performance of the proposed retrofit, review the installation and maintenance procedures for potential disruption to operations, and, of course, have a keen understanding of the economics of the retrofit investment (i.e., ROI & payback), including any product warranties and performance guarantees.

Initially, building owners should focus on performance verification. This process starts with the review of energy efficiency data provided by the retrofit vendor for a building with similar size, construction type and cooling/heating loads as well as comparable HVAC equipment and seasonal operating metrics. Secondly, request and review any third-party performance certifications.

If you are satisfied that the data provided is acceptable, then the building owner must request and approve a measurement and verification (M&V) plan from the retrofit vendor. The M&V plan should include a protocol to compare the baseline operating metrics of the building before the installation of the retrofit to the new operating metrics of the building after the installation of the retrofit technologies. A generally accepted M&V protocol is the International Performance Measurement and Verification Protocol (IPMVP). Most M&V plans should run for 12 months with monthly reporting and periodic reporting thereafter.

Next, I would recommend a deep read into the installation and maintenance procedures. Generally, there should never be a material disruption to the operations of your building, and the existing building control system should be able to monitor, control and optimize the retrofit. Finally, owners should take steps to understand the economics. What are the annual energy savings versus retrofit cost (i.e. payback)? How does the payback compare to the ROI (i.e., useful life of retrofit/payback)?

These preparation procedures may seem daunting, but with proper due diligence, building managers in coordination with HVAC service will be able to make an informed decision.

The Future: Smarter, More Flexible Systems

The HVAC industry is nearing a plateau in squeezing more efficiency from traditional chiller and heat pump equipment. The next generation of technology must be smarter (e.g., AI-based system and building optimization strategies) and more adaptable. Building owners and operators should consider implementing a blend of retrofitting, improved controls and leveraging new technologies, as well as prioritizing solutions to deliver both short-term gains and long-term sustainability.