Problem Solved: Co-op Board Saves Big by Regulating Building Systems

As part of our ongoing Problem Solved series, Habitat spoke with James Hannah, managing director at the energy management company Parity.

Local Law 97 has people taking a really close look at how they can reduce energy consumption and therefore reduce the carbon footprint of their buildings. A good example is a building we're working with on the upper East side. It's a 250-unit co-op, one of those white-brick buildings, and it was looking at fines starting in 2024 under Local Law 97.

Work with what you’ve got. The traditional approach to energy efficiency is to say, "We've got to put a lot of new equipment in our building. We've got to replace our boiler and chiller, and it's going to be a whole big to-do." But our approach is to say, “Let's get the most efficiency out of your existing systems. Let's leverage software to help automate the way that your HVAC system functions.” Because what we see in a lot of buildings is that the way they're circulating water or heating and cooling the building, they’re over-consuming energy. They’re over-ventilating  the building. There are a lot of savings you can capture through real-time dynamic controls. That's what we're focused on.

Over-taxed building staffs. What you see in a lot of co-ops and condos and multi-family buildings in general is that the building staffs are increasingly tasked with more and more things that they need to do, and it's just not fair to ask them to spend even more time making control adjustments all day every day. Instead, you can use the improvements and investments that companies like Parity have made to automate some of that. That way, you can outsource some of the operation and control of these systems for efficiency.

Take the ventilation system. We monitored the carbon dioxide content in the building, which is a good proxy for how much air you need to ventilate. What we found is that they were drastically over-ventilating the building, which means they were running the fans and the associated motors much faster than they needed to. So there's electricity savings there. It also means that you're pulling conditioned air out of the building faster than you need to. So there's savings on both the cooling and heating sides as well. By looking at that in real time and making changes to the fan speeds, we were able to generate a lot of savings. Basically, you plug the building into our cloud so that we can see what's going on and then receive and send signals to the building in real time.

Partnership required. There's a real partnership that we try to form with the resident manager and the building staff. We're not so naive as to think that helping big residential buildings in New York City operate more efficiently is strictly a software or technology solution. There's a real partnership that needs to be formed there, so we've spent a lot of time providing proactive and in some cases, reactive human support. That comes in the form of being in the building quite a bit to help resolve mechanical problems that might lead to heating or cooling issues — or might keep us from generating the savings we're expecting.

That’s another thing that's unique about our approach: we guarantee the savings we expect to generate. And if the building saves less than that, we'll cut them a check for the difference. So we have a real vested interest in making sure that the building performs at a high level. Both the technology side and the human side need to be there to make that happen.

Saving big, dodging fines. We went live in this Upper East Side co-op last year, and we’re on track to save the building roughly $40,000 a year in utility costs. And that equates to roughly $50,000 in avoided Local Law 97 fines. We think we'll be able to get them to a point where they won't have any fines. Under the deal structure, the board is paying for our services and for the limited amount of hardware that we needed to install completely out of the savings. So there was no out-of-pocket cost. It’s a pretty compelling business case.