Commercial Controls / Building Automation Systems / Energy Management Systems

Controls Grow in Retrofit Market

September 19, 2011
KEYWORDS BAS / commercial / controls
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With new construction still down, contractors who specialize in commercial controls can find more opportunities for their business by retrofitting existing buildings.

“Due to the construction downturn, there is tremendous opportunity for retrofits and energy-based sales. Plan-and-spec opportunities are drying up, and contractors that continually wait for a flood of new buildings are dying on the vine,” said Todd Cowles, director of sales – Americas, Trend Controls Systems. “Contractors that know how and where to spot opportunities to discuss retrofit options are busy upgrading existing systems and establishing relationships that will maintain reoccurring revenue year after year.”

While there are many challenges involved in retrofits, savvy contractors can develop their skills to better sell to and serve this market.

Retrofits are Hot

According to Marc Petock, vice president, global marketing and communications, Tridium, the retrofitting opportunities in today’s market far outnumber opportunities for new construction. “In North America alone, there are over 5 million existing commercial buildings that can be retrofitted right now,” he said.

“While there are a number of ways contractors can seize these opportunities, convincing the building owner is key.”

To convince the building owner to retrofit, contractors should stress the energy savings. “Energy costs continue to go up and if you can avoid some of the cost by performing a retrofit, a building owner is willing to listen and sign up for it,” said Larry Haakenstad, director of sales, Alerton.

“Rising energy costs, lower occupancy rates, and difficulties raising capital for new construction have made the market for retrofits attractive,” added James Dagley, LEED AP, vice president, channel marketing & strategy, Systems North America division of Johnson Controls Inc. “Savvy contractors are able to identify buildings that are consuming more energy, and spending more money to repair aging building systems, than similar buildings. Upgrading and retrofitting the controls systems in existing buildings, if planned carefully, are providing extremely attractive paybacks. In some cases, simple paybacks are being achieved in less than one year.”

Adding a note of caution, Ben H. Dorsey III, vice president of marketing, KMC Controls Inc., warned, “Customers are demanding shorter and shorter payback cycles. There is a tendency of some contractors to move from project to project without looking back. I strongly encourage you to do the follow-up and measure your success. You’ll need this data, whether anecdotal or documented, to secure the next project with the same energy savings pitch.”

Plus, he pointed out that the retrofit market generally requires owner-direct or negotiated sales. “Experience in the world of plan-and-spec contracting does not necessarily qualify you for direct sales. You need new skills or, perhaps, new feet-on-the-street employees.”

While it is important to secure the next project, Susie Gornick, marketing manager for Honeywell Building Control Systems, pointed out that smart contractors can position themselves as a “building owner’s partner for life.”

She said, “Commercial controls integrators often work with a building owner on a specific project — and approach the engagement with a one-off project mind set. Showing an end-user the value of improving building functionality, meeting mandates, and increasing their energy efficiency over the long term can help commercial controls integrators take their business to the next level and generate repeat business.”

Integration Drivers

Other trends in the marketplace are also helping to promote opportunities in retrofitting. These include everything from the unstable economy to government policies to the desire for simplification. According to Cowles, “Contractors aware of the current market climate are focusing on alleviating these pains for their customers and are gaining new customers in the form of service retrofit opportunities.”

Mark Shelton, vice president, sales and marketing, Veris Industries LLC, noted, “Enabled by the standardization on open network protocols such as BACnet and LON, the emergence of broad function systems, and a desire by building managers to simplify automation systems, convergence has gained strength as an industry trend.”

This push for an integrated system controlled from a central platform is attractive to building owner/operators because it can decreases costs, according to Steve Reeder, marketing manager, Triatek. “The ability to more tightly control and regulate a building’s system from a central location provides facility managers the ability to keep energy costs to an absolute minimum. This push has been facilitated by the decreasing costs of technology, including sensors, which has made the ROI to use increased technology more attractive by manufacturers and end users,” he said.

The green trend is also a factor in the growing interest in retrofits. Dagley noted that while building managers want to reduce costs, they also want to “increase energy efficiency and become more sustainable.”

Challenges Contractors

While all of these forces are aiding contractors in their pursuit of retrofit projects, substantial challenges must still be faced on the job. “The blending of older and newer technology (and technologies from different manufacturers) can sometimes make installation a bit more challenging than the installation of a complete solution. Additionally, people are now demanding more control and information more easily and on more platforms than ever before,” Reeder said. “Web interfaces that synch with BAS and can be displayed on various resolution screens is already increasing the complexity of controls in many areas.”

However, this blending and integration process has been eased by the development of open protocols and wireless technology. Moreover, said Cowles, contractors can overcome challenges by developing their creativity and ability to react to surprise situations.

“Retrofit opportunities are not cookie-cutter jobs with all aspects of the building’s system lining up perfectly. Contractors must creatively re-use existing wiring, sensors, end devices like valves and actuators, and HVAC equipment. Any or all of these previously installed items could have problems or defects which dramatically change the look and feel of the project,” he said. “Retrofits require a close look to ensure that integration and operation is even possible, and a ‘canned’ approach rarely works. Every building is different, and nothing should be taken for granted.”

Where is the Hottest Market Sector?

According to the manufacturers, all sectors of the existing building market provide prime opportunities for retrofits. However, some pointed out sectors where retrofits are becoming hotter.

“Honeywell does not see one sector in particular that is showing an increased trend toward control system retrofits. All segments are adopting retrofit system solutions to help them meet budget and energy efficiency goals,” said Gornick.

Shelton agreed, “There is not one sector that shows a greater increase over another. Like others, the BAS industry has been hit by the economic downturn. The industry has seen a significant decline in the number of new construction projects. This coupled with government green building initiatives [resulted in] most sectors seeing an increase in retrofit projects over the last few years.”

“We are seeing opportunities across the board from office buildings to retail, to education (both K-12 and universities), government, industrial facilities, hospitals, and hotels,” Petock added.

While Reeder noted that all of Triatek’s primary domestic markets have shown positive growth in 2011 to date, he continued, “Most noteworthy thus far have been laboratories and universities where we have seen a number of legacy controllers swapped out for our new fume hood and room controllers.”

Dagley also confirmed that school systems retrofits have been increasing. “There is a current demand for schools to reduce operating costs, while at the same time they are facing difficulty passing new construction bonds, which has resulted in an increase in control system retrofits at these facilities,” he said. He also pointed to health care as another market with increasing demand for retrofits.

Dorsey agreed that the health care market is ripe with opportunity. “Health care operations are continually trying to compensate for more and more energy usage from their critical patient care systems. Therefore, they are always interested in discovering how standard, mechanical systems, for example, can function more efficiently,” he explained. He added, “We’re certainly seeing a fair amount of this work among multi-point retail facilities. They’re trying to both standardize and trim the fat.”

Sidebar: Product Snapshot: The Latest in Controls

Alerton added an Energy Dashboard to its standard software offering that makes it easy for a user to add in energy monitoring information. Alerton also released an integration engine to provide more integration capability for new and/or existing sites. The Alerton Integration Engine enables users to keep most of their existing investment while adding in state of the art controls. It also allows users to bring in more data from systems they can then use to manage their facilities much more effectively.

The Johnson Controls Metasys® building management system features wireless control technology and an advanced, intuitive graphical user interface to provide greater visibility and control to key building systems. New cloud-based facilities management technologies deliver automated scheduling and maintenance management capabilities for building owners and maintenance managers.

Building operators can control multiple facilities with Honeywell’s WEBs-AX™ Enterprise Security offering. WEBs-AX Enterprise security allows for the aggregation of personnel, access, and historical information from multiple locations onto one platform for system-wide reporting and programming. According to Honeywell, operators will save time because multiple systems can be programmed once rather than programming each separately, and they’ll be able to deliver measurable energy savings because the integrated management allows tighter control of all systems.

KMC Controls has enhanced its FlexStat integrated BACnet controller and sensor. The built-in programming for common applications is accompanied by temperature, humidity, and occupancy sensing. KMC also added CO2 sensing to meet the needs of demand control ventilation work and will soon add an IP version to the MS/TP communicating version.

Trend Controls Systems’ EnergySuite dashboard is completely customized and created for customers. Building owners and operators can pick and choose what they want to showcase from day-to-day, month-to-month, or year-to-year to address their unique needs. Trend Technology Centers work one-on-one with customers to ensure that information is presented in a creative and unique manner, allowing each building owner to get in the driver’s seat to determine where their facilities go in the future.

Triatek has introduced several networkable products featuring full-color touchscreens, including a new room controller, fume hood controller, a remote room monitor, and a central monitoring station commonly used for nurses’ stations. The touchscreen can provide more information at a glance, which allows for faster decision making.

Tridium expanded and added features to its Niagara Framework, including support for battery-less embedded controllers and 802.11 WiFi and the addition of new drivers that support the integration of lighting controls, access control, video, elevators, energy management, power distribution, irrigation, digital signage, and more.

Veris Industries developed a line of CO2 sensors, humidity sensors, temperature sensors, and power meters to meet the industry’s increased demand for BACnet devices and need for cost savings. The devices easily connect to a BACnet control system through their embedded BACnet MS/TP protocol. The ability to network the sensors over an already established MS/TP trunk removes the need for additional network drops and wiring, significantly reducing installation costs.

Publication date: 09/19/2011

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