Upstream HVAC Activities to Yield Significant Advantages
For ten years, NEEP has facilitated both Residential and Commercial HVAC Initiatives, focusing on information sharing among sponsors, contractor relationships, and the coordination of customer rebates. Now, with an increased emphasis on peak demand savings, and armed with new research, both Initiatives will embrace and explore new directions to increase savings and decrease cost (see the related article published in the December 2006 issue of NEEP Notes). NEEP’s revamped HVAC Initiatives will focus on efforts to engage upstream market players including manufacturers and distributors. With this new approach, NEEP aims to bring greater advantages to its sponsors, to HVAC customers and to the region as a whole.
Launch of Upstream Efforts: HVAC Solicitation
NEEP launched its upstream HVAC program approach on March 2, 2007 with the release of a joint residential and commercial unitary solicitation. Distributed on behalf of NEEP sponsors to dozens of manufacturing, distribution, contracting and trade association representatives, the solicitation presents a novel approach to the pursuit of cooperative activity with upstream partners. Rather than develop significant background and history, then define specific areas of interest for partners to respond to, the solicitation is a simple, one-page invitation with a few high-level examples of how NEEP and its sponsors see cooperative activities benefiting upstream players.
The solicitation’s objective is to yield a series of in-person meetings, facilitated by NEEP, between individual upstream market actors and initiative sponsors. The meetings will be a platform for confidential discussion and development of cooperative activities that are mutually viewed as feasible. “Flexibility” and “industry-driven” are key concepts underlying the approach such that upstream players can choose to discuss residential, commercial or both sectors in one joint meeting, or separate meetings. In either case, specific types of activities to be pursued remain open-ended. The solicitation included examples of cooperative activities NEEP and its sponsors envision for the HVAC community, such as:
- Turn-key distributor programs in which a manufacturer and program sponsors jointly subsidize a distributor to achieve market gains.
- Targeted design and build programs to have high-efficiency equipment and quality installation practices specified in standardized building plans.
- Early retirement programs to replace old but working equipment with new, properly installed, high-efficiency equipment.
- Cooperative marketing and education programs.
Positive responses were received almost immediately upon release of the solicitation and industry meetings are expected to occur in April. NEEP congratulates its sponsors for this bold and creative endeavor.
Customer Advantages
Beyond the obvious advantage of lower utility costs, customers can capture significant non-energy benefits by addressing the efficiency of HVAC equipment, air distribution and proper installation. Typically, a residential central air conditioner can yield savings on the order of 30 kilowatt hours (kWh) per ton for each incremental seasonal energy efficiency rating (SEER) above existing or baseline. For commercial unitary equipment, the savings can reach 45 kWh per ton per increase in SEER. Therefore, by replacing a typical three ton residential HVAC unit at SEER 8, with a more efficient SEER 15 model, customers can realize savings of 610 kWh per year, or about $100 per year at $0.16 per kWh. Similarly replacing a five ton SEER 8 rooftop unit with a SEER 15 unit could yield upwards of 1,400 kWh or $175 per year at $0.125 per kWh.
Additionally, some of the non-energy benefits of proper sizing, proper air distribution and proper installation include:
- Improved comfort.
- Improved indoor air quality.
- Increased productivity.
- Decreased maintenance/repair.
- Increased equipment longevity.
NEEP’s residential and commercial unitary HVAC Initiatives, and the current upstream solicitation, are working to bring these advantages to customers better, faster, cheaper, and with long-lasting market impacts.
Advantages to the Transmission and Distribution Infrastructure and Reliability
NEEP’s upstream HVAC solicitation provides an opportunity to address the efficiency of both gas and electric equipment in an industry-friendly, industry-driven way.
Peak load issues, whether for electric cooling or gas heating, are important factors in the reliability of energy delivery systems. Gas, in particular, is often overlooked in discussions of energy efficiency but faces serious capacity issues in the wintertime. As gas-fired electric generation continues to increase and supplies to the Northeast tighten, the availability of adequate energy resources in the peak winter heating season becomes constrained. Solutions include additional pipeline, storage and liquefied natural gas (LNG), all of which are expensive and time-consuming at best.
Energy efficiency is, by contrast, a fast and practical solution. Furnace and boiler technology have improved greatly such that, for example, a typical warm-air furnace that was installed 15 years ago may run at about 78 percent AFUE while a new condensing unit runs at over 90 percent. The savings associated with a jump from 78 percent AFUE to 90 percent is on the order of approximately 15 MMBtu per 2,500 square feet of conditioned space. Virtually all of the savings occurs during the winter and significant amounts occur at peak days when pipeline and storage capacity is most strained.
On the electric side, the capacity of the wires delivering electricity to our homes and businesses remains tight, and in some parts of the Northeast dangerously so. Utilization of this infrastructure continues to be most pressured at peak summer periods when air conditioning load is at it’s highest and the solution of decreasing utilization of air conditioning is unrealistic, while the solution of building more capacity is expensive and time consuming. In contrast energy efficiency, captured through efforts such as the current upstream HVAC solicitation, brings cheap, fast and practical relief. Translating the kWh savings described as accruing to the customer into kW, or capacity, shows savings of 1 to 2.5 kW per installation.
Advantages to the Utility and/or Efficiency Program Administrator
Customer savings and infrastructure savings by definition translate into competitive advantages for efficiency program administrators and utilities. A saving customer is a happy customer and a happy customer is advantageous to the utility via goodwill and lower customer-service/customer-complaint activity. The costs of capacity and the costs of emergency supply are both significant drivers of retail price (rate) increases for utilities and often cause pressure on other operations and maintenance expenses such as human-resource costs (salaries, travel, training, staffing levels). Reducing these pressures by avoiding the need for supply-side resources is a benefit in and of itself. The environmental benefits associated with efficiency are significant for utilities as well. Finally, for efficiency program administrators whether they be utilities or other entities, NEEP’s upstream HVAC solicitation provides a potentially significant new “supply” of programming as traditional rebate approaches, for example, mature.
Further information can be obtained from Jon Linn, NEEP's Commercial Unitary HVAC Initiative Program Manager, and from Melissa Lucas, NEEP's Residential HVAC Initiative Program Manager.
