Creative strategies to lower heating and cooling costs, while future-proofing buildings need government incentives, according to the SHURE-Vancouver panel.

Panel: Landlords Need Incentives to Implement Next-Generation Heat Recovery Technologies in University Environments

August 1, 2023

SHURE Initiative

A panel of energy experts agreed that owners of buildings in both university and off-campus environments may be resistant to adopting new energy-efficient technologies if the cost advantage is not immediately known, or they lack government incentives.

Kyle Boynton, Vice President, Portfolio Management at Subterra Renewables told the SHURE-Vancouver audience that the current mindset of many owners is to “keep refurbishing.” Boynton noted the challenge of addressing heating and cooling in older buildings that require significant upgrades and may be falling apart.

“It’s old and expensive gas systems, or it’s electric, there are even quite a bit of propane and heating oil systems, you go down to New York as well, there are just some old systems, and the question is, what do you do?” said Boynton, whose firm is heavily fixated on making geothermal technology more accessible to owners of all types of buildings. Subterra develops and operates thermal district energy systems using the latest geothermal and heat recovery technology.

Joseph Bros, Director of Development, Musqueam Capital Corp, owns and operates a portfolio of multifamily and related living assets in British Columbia. “Approximately 50% of our residents are students at the University of British Columbia, but our community is built for everybody,” said Bros.

Bros said his firm invested “a lot of money” into the district mechanical system but returns on the investment have been very low because the energy in British Columbia is so inexpensive due to the availability of hydropower. “However, we did it because it was the right thing to do.”

According to Bros, the district energy installation was put in place to create sustainable development for many generations to come. Bros said Musqueam is thinking of long-term payback because short-term payback isn’t realized. Bros said his company is looking at 30% of energy coming from district energy and said the payback is small. “I think if we get something in possibly 10 years, maybe 20, that would be great.”

However, the game changer may be government incentives that can help developers with the financials of the clean energy transition. By investing in clean energy, the developers have access to Clean BC funding. And, they can receive CMHC Rental Construction Financing Initiative funds at very favorable interest rates.

According to Bros, when you add in the government incentives, there’s “suddenly a very quick payback on the investment.” But without government incentives, Bros said it is “very difficult to justify investments.”

Lynn Mueller, CEO & President, of SHARC Energy said it’s important for landlords to pay attention to details when working with building efficiency. “So, one of the things at SHARC is we say is you guys are building these things, the envelope is better, everything is better, but there’s still a six-inch hole in the basement.”

Mueller discussed energy capture technology. “What makes the proposition work is that it’s super efficient to recapture energy as opposed to remaking it with a boiler, electric boiler, or gas boiler.” 

Mueller said his vision is to future-proof and make the building healthier, but not every developer will step up and pay for that little bit of future security. According to Mueller, not every developer is interested in energy efficiency. “When I was doing geothermal and SHARC to developers, you walk in the room and they glaze over – there is no way in hell we’re paying any extra to put in this system, they’d say.”

Mueller’s model is creative with energy recycling. “There are 1.4  billion gallons of sewage a day in New York City, all being heated about 30 degrees, and if we could just recover one degree back from that flow, it’s 3 million per hour of revenue,” said Mueller.

Mueller added when his heat recovery technology gains traction, he would “be too rich to talk to you guys [on the panel] but it’s something that’s coming and we’re working on it.”

Kyle Boynton explained how geothermal technology is implemented. “Essentially, we’re putting four holes in the ground and using the ground as otherwise whatever your source of energy would be.” Boynton added, “For a typical building, you’d probably use fossil fuels and some form of cooling towers, otherwise electricity, and we’re doing that at scale.”

Geothermal technology requires for a single-family home one borehole in the backyard. For larger projects, such as universities, thousands of boreholes are required for a given site. Subterra aims to make its technology accessible to landlords who support efforts to green the planet and want to make it cost parity.

To make it easier for the landlord, Subterra has conditional forms of agreement where it takes the onus and the burden. “We have a fleet of drill rigs that sits across North America, and engineering partners as well, and so what we will do is go and spend the money, do the work, come to a site, do the testing, do whatever work it takes to prove exactly what I’m sending to you for your developments to make sure that it is an investment and a good asset for your property,” said Boynton.

With their large footprints, university campuses are becoming more central in geothermal technology, according to Boynton, who said his firm talks to a new university across Canada monthly. Subterra has access to 60 drill rigs across America. “They’re looking at either retrofitting part of their campuses or their whole campus.”

There is growing consensus that the status quo of large, central, boiler plants are simply not the way to go anymore in terms of energy efficiency and sustainability. Boynton suggested that proposed tax credits in Canada would amount to a massive reinvestment for geothermal technology. “If you look in the U. S., the IRS has already implemented these tax credits, which is just a massive to put an investment forward.”

Subterra can rapidly scale projects, according to Boynton. “Instead of having to wait six months for University equipment systems, we’re able to attack it with something like ten-door rigs and shrink, compress that schedule to, you know, a quarter of what it allowed us to put in.”

Rami Y. Belson’s Energex has worked for the past 22 years helping buildings cut energy waste by adjusting their space temperature when no occupancy was detected through custom-developed sensors. More recently, Energex invented an AI-powered, energy-saving machine that has been installed in student housing, multi-residential units, hotels, and other applications.

“Our thermostats are good-looking and sleek,” said Belson. “We’re in all types of residential buildings from conventional multifamily, seniors to student.”

Data analytics is an important first step for Belson and Energex. “By being able to gather all this data, starting with a set point, occupancy, and temperature – all this data gets gathered to a point where we can start to make intelligent decisions about what the weather is going to be like in the next two days, what the nighttime temperatures are going to be, and in many cases, interact in concert with systems like the other building technologies to achieve more efficient energy performance for buildings.”

The experts discussed the impact of COVID-19 on the methodology and implementation of new technologies. Joseph Bros noted a change in air filters post-COVID in his multifamily buildings. “We use MERV 13 air filters, hallways are slightly pressurized, so there is no cross-contamination from one unit to another and the tenants have full control of the environment they live in.”

When asked by Belson if he preferred automation, centralized AC, or standalone units, Bros said that he prefers automation and is using Honeywell basic programmable thermostats for tenants. Bros said he is also building automation for district energy and condo properties. “We have a fully automated system that I can log in and see what’s happening in the building, change set points, and, it’s critical to operating the building efficiently.”

Belson asked the panelists about convergence and the future of heating and cooling technologies. Mueller said energy practitioners face the problem of getting a developer to invest in a green energy system.

“How do you get a guy to invest in a green energy system when they don’t have to,” said Muller. “I think creative financing is a great way and with AI and machine learning, we can solve these problems and come out of it better off financially and health-wise.”