By Roxana Baiceanu (CommercialPropertyExecutive Article) —
With wellness and sustainability ranking high on the list of resident preferences, and more states committing to energy-efficiency policies, the multifamily sector faces both challenges and opportunity for change. According to the American Council for an Energy-Efficient Economy, in 2019, more states joined California and Hawaii in setting 100 percent clean energy targets, including Nevada, New Mexico, Washington, New York and Maine. More than half the states have committed to sustainability.
For multifamily operators, the gains from implementing energy-efficient solutions are numerous. Cost-effective upgrades to apartment buildings can improve energy efficiency 15 to 30 percent, ACEEE estimates. Whether they are planning small or big upgrades, owners sometimes postpone projects because of the difficulty of identifying the best tools to accurately assess properties.
Energy Trust of Oregon is a mission-based organization collaborating with utilities, nonprofits and government agencies to help businesses and multifamily property owners find sustainable solutions for upgrading their assets, particularly as higher energy rates are on the horizon. Kate Wellington, a program manager at the organization, shared insights into the steps that help operators choose the right solutions.
What are the most cost-effective ways in which an emerging multifamily operator can make a community more energy efficient?
Wellington: There are two primary areas for energy efficiency opportunities in a multifamily property: common areas (including exterior spaces) and individual dwelling units.
For common areas, the energy-saving options will typically include windows, lighting and heating/cooling/ventilation (HVAC) for areas like lobbies and hallways. High-efficiency windows are a popular efficiency upgrade that not only improves comfort and reduces energy use, but also enhances the curb appeal of a property, which can increase property value and help the property stay competitive. Efficient LED lighting for both interior spaces and outside areas like gardens and parking lots saves a lot of energy but also lasts longer and provides better quality light than older lighting technology. Lighting upgrades are often the best and easiest ways to make energy-efficient improvements to a property and can pay back the investment through energy savings in as little as two years. Energy-efficient appliances also provide savings opportunities in laundry rooms and other common areas that may have refrigerators and dishwashers.
For individual dwelling units, efficiency opportunities include upgrading appliances, lighting, exhaust fans, HVAC equipment and controls as well as water-saving devices such as high-efficiency faucet aerators and shower heads and advanced power strips to reduce energy consumption from electronics.
What are the top things/factors multifamily owners bear in mind before planning energy efficiency upgrades?
Wellington: One of the most important factors is timing. There can be some seasonality to energy efficiency upgrades. For example, it’s a lot easier for property managers and residents alike if windows replacements or HVAC improvements are completed in more moderate weather conditions.
Then, there’s lifecycle costs. Energy Trust incentives can reduce the upfront costs of high-efficiency products, but it’s also helpful to consider the ongoing benefit of energy savings. Many energy efficiency upgrades at multifamily properties can pay back their investment cost in just one to three years, and the savings continue, which is a great financial benefit to the property owner. It’s often more expensive to keep inefficient equipment running than it is to replace it.
Finally, there are resident benefits. Energy-efficient properties can make for happier residents, and that can translate into lower turnover rates, fewer maintenance calls and more positive relationships between property managers and tenants. Prioritizing energy upgrades and promoting properties as sustainable is also a great way for property owners to attract tenants.
How does Energy Trust of Oregon usually help in this process? Tell us a bit about the incentives available to business owners.
Wellington: The first and easiest step is to request a free walk-through of your property by an energy adviser. We’ll walk through common areas, mechanical rooms and dwelling units to evaluate equipment and identify areas for improvements. We then provide a report on opportunities to save so the property manager can make informed decisions about energy projects. This phase also includes the estimated annual savings and projected five-year cumulative savings if the equipment is upgraded.
The second is our free service that provides and installs energy-saving products in individual dwelling units. These include LED bulbs, faucet aerators and showerheads, as well as an advanced power strip to reduce energy costs from electronics. If residents pay their utility bills, they’ll appreciate the savings and the property manager will benefit from water savings. Energy Trust can also provide a more technical study of beneficial energy upgrades for projects like HVAC and other complex systems.
Once a property manager decides on an energy upgrade, Energy Trust pays a cash incentive based on the energy savings that the project will generate.
Based on your experience, what is the most common or biggest mistake that business owners make when planning to upgrade their property? What’s your number-one piece of advice in this area?
Wellington: We encourage our customers to talk with Energy Trust before they undertake a project that could save energy and reduce utility bills. We can provide property managers with helpful information about how they can get the most for their energy dollars by selecting high-efficiency equipment and also let them know about available cash incentives that they might otherwise miss if they move ahead with a purchase without working with their Energy Trust advisor.
Would you give us an example of a recent success story?
Wellington: South Hills Apartments in Pendleton, Ore., is a recent project that we consider to be a huge success. Landlord Nate Brusselback purchased South Hills Apartments in 2017 and has been working with Energy Trust to install energy-efficiency windows as the units become vacant. Brusselback considers the project a win-win for him and his tenants for comfort, appearance and, with the incentives, his bottom line.
To date, Energy Trust’s multifamily program has worked with 12,000 properties like Brusselback’s and provided $30 million in incentives for projects that supported HVAC, weatherization, water heating, lighting, and appliance upgrades. We believe that every kilowatt-hour of electricity or therm of natural gas we save is a success because it means that our customers are getting more for their energy dollars and can invest that savings into other aspects of their business, and residents have more comfortable homes with reduced utility bills as well.