Decentralized Heating and Cooling Solution Saves Millions for New York City Condo

Ramez Afify
Principal,
E4P Consulting Engineering

“Switching to decentralized heating and cooling solved several problems at once”

On West 58th St., a ’60s-era condominium faced a pivotal decision. Like many buildings, it used Con Ed steam to heat and cool the building. The condo had a centralized system, which meant that heat and cooling were controlled building-wide. There was an absorption chiller in the cellar, a cooling tower on the roof and pipes running into every apartment. The pipes leaked two or three times a year, causing floods in the affected apartments and the units below. That, coupled with aging equipment, meant a fix was unavoidable.

Faced With Jaw-Dropping Alternatives

The board soon learned from the several engineers it consulted with that the fixes were incredibly expensive, even jaw-dropping. The first one it considered was to replace everything — the two major pieces of equipment and the leaking pipes. “Replacing the pipes is a huge project by itself,” says Ramez Afify, principal at E4P Consulting Engineering, who offered the solution the condo ultimately accepted. Replacing the pipes would involve significantly disturbing every apartment in the 33-floor tower condo. The cost of this option: $20 million. The second option, costing $15 million, was still out of reach. Here, the condo would keep the centralized controls it was used to but switch to a heat-pump system where the air-cooled equipment would connect to an indoor air handler in each apartment.

Afify recommended something bolder: move from a centralized system to a decentralized one. This would have several benefits above and beyond eliminating the leaks coming from aging pipes. First, a decentralized system meant that each owner could control the heating and cooling temperatures within their units. Since owners would now be paying for the electricity they actually used, they would be rewarded for conservation. Second, the pivot would remove the line item for heating and cooling from the building’s budget. Third, budgeting a couple hundred thousand dollars a year to repair leaks from the steam pipes would no longer be necessary. Fourth, it would bring the condo that much closer to meeting the requirements of Local Law 97. And fifth, maybe most compelling, was that the price tag would be around $7.5 million.

Switching to Cold-Climate Heat Pumps

“What we did,” Afify says, “was replace the existing units underneath all the windows with cold-climate heat pumps.” This switch required no pipes, but it did require a larger exterior opening under each window. The transition was not without its challenges. Residents expressed concerns about the disturbance the installation would cause, the noise of the new units and the aesthetic impact on the building’s facade. 

“The first step that was really very helpful in addressing the concerns was to install a couple of the units in the super’s apartment,” Afify says. “We then held an open house for everyone to go and visit the new units and hear what they sounded like. By doing this, many of the concerns were alleviated.” 

Electricity was also an issue that had to be addressed, since the electrical service for the entire building had to be upgraded to accommodate the new heat pumps. Electrical submetering was included so that the heating and cooling costs could be billed to each unit. Each apartment used to get only one bill from Con Ed for lights and any appliances that used electricity, “but now they’re getting two bills: one from Con Ed, and a second bill for their heat-pump usage,” Afify says.

“This solution ended up being more of an electrical solution than a mechanical one “because the work is essentially to make the opening for the heat pump, install the unit and then plug it in,” Afify explains. “That’s an important consideration because we were able to take an expensive trade out of the equation.”

Going From Lower Cost to No Cost

The project was completed at the end of 2023, so the condo is still reviewing the impact of the energy pivot. Afify says it used to spend $70,000 a month for heating and cooling, and this has dropped to $10,000 a month. The next project is eliminating this $10,000 entirely by switching to a central heat pump for hot water. As a result of this decrease, and the fact the condo doesn’t have to budget for leak repairs, common charges have decreased. Energy isn’t free, though, and unit-owners are now paying individually instead of through common charges. “It used to be around $60 or $70 per month, but now it’s a bit below $200 a month,” Afify says. 

Assess Your Building’s Specific Needs

“One size doesn’t fit all,” Afify reminds boards. “This can be a great approach for certain buildings, but not all. Secondly, for any electrical upgrade, filing a case with Con Edison early on is crucial because sometimes there isn’t enough power in the street, or sometimes a transformer is needed, which is a two-year process subject to the transportation department’s approval.” And finally, Afify says, “because of decarbonization, there are so many changes happening, and new solutions are always emerging. It’s always worth it to start with market research and a feasibility study to see what technology can address a particular problem that needs to be solved.”