Heat Pump Technology Revolutionizes Heating and Cooling Systems in New York City

There are multiple paths to electrification, but a popular choice for co-op and condo boards is to up a building’s energy profile using heat pump technology. There are plenty of benefits with this route, and perhaps the most significant change is the opportunity it presents to rethink the building’s mechanical system. Will an upgrade allow for residents to better control heating and cooling in their own apartments? Will shifting this control to residents also move the energy line item from a building’s budget so that residents actually pay for the energy they use to heat and cool their apartments? Or will upgrading to heat pump technology offer some sort of a hybrid solution that can save energy costs and reduce carbon emissions but still allow for flexibility in the future?

Of course, along with benefits come complications. Installing heat pumps can be expensive and disruptive. In many cases, a contractor will need access to apartments to measure and install air handlers and refrigerant lines, at considerable inconvenience to residents. Heat pumps also affect a building’s bottom line, not just in the cost of installation but also in the cost of electricity, which is an important factor for buildings removing gas- or oil-fired boilers in favor of heat pumps. “It’s a complicated decision-making matrix,” says Justin Szlasa, a board member at 240 E. 24th St., a co-op that’s gone fully electric with heat pump technology. While every building has its own systems to deal with, the following three stories give a good idea of what the drivers are and why it might make sense to make the heat pump switch.

BYE-BYE, BASEBOARDS

Waverly Mews

23 Waverly Place

The Lay of the Heating Land

Waverly Mews, a 120-unit co-op in Greenwich Village, had electric baseboard heaters that were inefficient and expensive. Each resident paid their own electric bill, and some shareholders were paying over $1,000 a month to meet their winter heating needs. The co-op had a D grade for energy efficiency, and the board wanted to improve the building’s performance. “Clearly, we need to move beyond wasting energy and money like that,” says Sasha Soroudi, the board president. This led the board to upgrade its heating system from electric baseboard heating to variable refrigerant flow (VRF) heat recovery units.

Heat and Cooling Upgrade

The VRF heat recovery system uses heat pump technology to provide both heating and cooling in each apartment. For each shareholder, this means that both heating and cooling will now come from new indoor units and thermostats. Window air conditioners that had cooled each apartment can now be removed, opening up valuable window space to more light and air. 

Based on efficiency data from the manufacturer, shareholders can expect to slash their winter heating bills by 80% and see savings of up to 30% on summer cooling costs. 

The VRF system has the added ability to recover and reuse heat that would otherwise be lost. “Not only can the system simultaneously heat and cool the building, but it can extract heat from one area and give it to another,” says Sina Jasteh, the founder of Efficiti, the engineering firm designing and managing the project. The project involves the installation of more than a dozen heat pumps on the roof, each serving multiple apartments. 

Cost and Comfort Benefits

The hefty cost cutting is welcome news for shareholders at the six-story building, whose residents are a mix of longtime residents on fixed incomes and more affluent newcomers. VRF heat recovery units typically allow for a more balanced system so that when south-facing apartments are hot on cool days, the refrigerant in the pipes can recover heat and exchange it to different lines in the building to heat colder north-facing apartments. “If it’s a really balanced operation, the fans on the roof units don’t even come on because they’re so efficient at transferring the heat,” Jasteh says. 

The building is expected to have enough electricity to power the new system. “The baseboard heating already uses a lot of power,” Jasteh explains. While electrical capacity isn’t a primary concern, one of the anticipated challenges includes getting access to apartments to complete the work. The board is hoping to minimize inconvenience to residents by routing the piping through common areas, with the time spent in each apartment focused on mounting the indoor units and thermostats.

The project comes with a price tag north of $2 million, and the board hopes successful applications for Con Edison and NYSERDA incentives will cover a significant portion of the cost. To pay the balance, the co-op is using a combination of reserve funds and its credit line from its mortgage lender. Efficiti is also helping the board explore other financing options. “Having a variety of financing alternatives helps us calibrate how much financial burden our economically diverse community shoulders up front versus over time,” Soroudi says. The work is expected to be completed before the end of the year.

RECLAIMING RADIATOR SPACE

240 E. 24th St.

Like many prewar buildings, apartments at 240 E. 24th St., a 36-unit co-op in Kips Bay, have — until recently — been heated by radiators supplied by an oil-fired boiler. “We were always repairing it, and the pipes also showed signs of deterioration,” says board member Justin Szlasa. Looking forward, the board decided to upgrade the building’s energy profile by ditching the oil-fired boiler and installing more efficient heat pump technology. This decision offered two principal benefits: giving residents better control of their heating and cooling — and allowing the co-op to avoid any future carbon emission penalties under Local Law 97.

Plug Me In

The age and condition of the ancient boiler was the primary driver of the co-op’s electrification project, which would come in at $1.5 million. An important first step was upgrading the co-op’s electrical capacity. This involved bringing in more power to operate the heat pump hot water system and give each apartment 125 amps of power. The units also received a new 40-amp plug in the kitchen to allow for induction stoves. While gas stoves are not banned in New York, the city has begun phasing out the installation of gas appliances in new buildings, and Szlasa says the board was aware of a shift in tolerance for gas cooking. “We didn’t have capacity to power electric ranges in the units and wanted to put that in just in case we had an issue with our gas distribution,” he says.

With the boiler decommissioned, 36 rooftop condensers supply each apartment with heating and cooling, eliminating oil from the co-op’s operating budget. A heat pump on the roof is providing domestic hot water, with storage tanks in the basement. One of the biggest challenges of the installation was coordinating with shareholders to get access to apartments over a nine-month period. “We had to take a lot of the pipes through the building from the first floor to the roof,” says Thomas Esposito, the president of VRF Solutions, the mechanical contracting firm retained for the project. Shareholder disruption was inevitable with radiators needing to be removed and air handlers, electric panels and plugs installed. The key was early communication to residents about the work.

Shareholders can now remove their in-window air conditioning units and reclaim radiator space. “The co-op effectively has a central air cooling and heating system and a superefficient hot water system,” Esposito says. Each apartment is submetered, so residents now pay for all their energy based on use — something the board hopes will encourage conservation. Energy savings for the co-op are expected to be between 20% to 30%.

HAIL A HYBRID SOLUTION

The Victoria

7 E. 14th St.

The board at The Victoria, a 495-unit co-op at 7 E. 14th St. in the Flatiron district, is banking on three outcomes for its phased electrification process: minimizing a six-figure carbon emission penalty in 2030, reducing operating costs and generating energy savings. The $15 million project is a way to hedge bets on energy use. “We are installing a hybrid system, which is electric in the summer and gas in the winter but can be all electric in the future,” says Corinne Arnold, the co-op’s board president. 

Phasing It In

The first step in this decarbonization effort is to replace the building’s absorption chillers in the basement with 16 modular electric heat pumps. The old chillers used steam from the gas-fired boilers to generate chilled water for air conditioning via fan coil units in each apartment. Switching this system to modular heat pumps — a project that’s currently underway — will improve efficiency almost tenfold, says Amalia Cuadra, the senior director of engineering at En-Power Group, the engineering firm doing the infrastructure upgrades. 

The original fan coil units served by the chiller and boiler remain, and the modular heat pumps will be able to operate in both heating and cooling modes. Even so, because the cost of electricity is currently more than the cost of gas, space heating with the heat pumps may not be cost-efficient for a while. By phasing in electrification, the board can leverage the building’s system, using gas now but switching to electricity when it makes more economic sense — either when electricity is more affordable than gas or when the use of electricity will mitigate the co-op’s Local Law 97 emission penalties, currently projected to be around $280,000 in 2030. “We are staging the electrification like a 10-year plan,” Cuadra says. “Everything we are installing will be electric-ready, so the chillers and heat pumps can provide heat, but only when it’s more cost-effective,” she says. 

Still to Come 

In the next few months, the building’s gas-fired steam boilers will also be replaced with hot water boilers, further increasing efficiency. “Making steam is very energy-intensive,” Cuadra explains. The new boilers will provide heat in the winter unless it makes more sense to use the heat pumps. The boilers also support the generation of domestic hot water as part of a hybrid system with a heat recovery component. “In the summer, instead of sending warm condenser water to the cooling tower, we are first going to send the water to heat pumps to help make domestic hot water,” Cuadra says. This means the boilers will use less energy to heat the water. 

The mechanical system upgrades are expected to shave $250,000 off the building’s $2 million annual energy bills. And while these upgrades have the biggest impact on energy consumption, further improvements will be made by upgrading the cooling tower and vent fans and replacing the entire piping distribution system to the apartment fan coil units. This last project will take two to three years and be most disruptive to shareholders at the 60-year-old co-op as the deteriorated pipes are replaced throughout the building. Arnold says it’s “all in an effort to minimize financial risk” and prevent any catastrophic leak in the future. The cost of the repiping is around $10 million. The combined result of these projects is expected to reduce future Local Law 97 emission penalties by up to 90%. 

The board was savvy enough to refinance the co-op’s mortgage when rates were low in 2020 and pulled out $20 million for these infrastructure costs. Thanks to rising interest rates, the building is now making money on the loan. “We are applying that to the projects,” Arnold says. The work is also eligible for around $500,000 in incentives from Con Edison.