Under the pressure of legislative mandates and environmental benchmarks, commercial buildings are being required to undergo energy makeovers. HVACR contractors are tasked with the challenge of upgrading these often archaic, inefficient systems. In many cases, though, repairing the equipment is like trying to put a Band-Aid on a bullet hole.
A new approach, championed by HVACR manufacturers and energy providers, called Energy as a Service (EaaS) or Energy Efficiency as a Service (EEaaS), offers facility managers an all-in-one, turnkey replacement option. Working through one company, EaaS/EEaaS is designed to simplify and streamline all on-site energy efficiency upgrades, eliminating massive equipment costs, supply chain delays, unexpected maintenance charges, and more through no upfront costs and one monthly bill.
The EaaS/EEaaS model streamlines a job ticket for HVAC contractors, who simply agree to the work, show up to the site, install equipment that’s already available on-site, and move on to the next job. There’s no bidding process, no union contracts, and no competition for the lowest bid.
Spread Your Wings
The EaaS/EEaaS model offers HVAC contractors a recurring revenue stream with very few strings attached.
“Through our agreement, there's no budget decisions for contractors to make — we pay for and schedule everything,” said Al Subbloie, president and CEO, Budderfly, an energy management provider. Budderfly recently purchased 2,000 Carrier WeatherExpert Ultra High-Efficiency Single-Packaged Rooftop Units through a partnership with Carrier and intends to install the equipment atop small and medium-sized businesses across America.
Budderfly, and its nationwide network of 300 contractors, provides guaranteed energy savings to commercial customers through its EEaaS offering. The company assesses a facility’s energy usage and proposes upgrades in LED lighting, HVAC, IOT sensors, temperature and refrigeration controls, renewable energy sourcing, and more.
“Our contractors don't have to sell anything,” said Subbloie. “They simply show up when we need them, perform the work, and move on to the next job.”
Due to the large number of projects the Budderfly team has completed, Subbloie said his team has perfected the process, simplifying contractors’ workflow.
“We’ve seen every little nook and cranny and have encountered every surprise imaginable,” he said. “Because of that, we’re prepared for everything and anything.”
Through the HVAC upgrades alone, customers can expect significant savings over the equipment’s life span.
“Our service provides a complete bill takeover,” said Subbloie. “Replacing a rooftop unit can be an expensive endeavor. We come in with all-new infrastructure and bear the responsibility for the install and upkeep. The customer simply receives a uniform bill over the equipment’s life span and enjoys the perks of energy and carbon reductions for several years.”
President and CEO, Budderfly
If It Ain’t Broke
While the HVAC maintenance and installation market has traditionally been reactive in nature, Subbloie believes that through efficiency mandates, refrigerant regulations, and technological advances, more and more customers are opting to replace units rather than retrofit them piece by piece.
REPAIR OR REPLACE: More and more customers are opting to replace rooftop units rather than retrofit them piece by piece. (Courtesy of Getty Images)
“We've been on thousands of roofs, and it is ugly up there,” Subbloie said. “As long as the cool air keeps pumping in, most customers think everything is fine. When a unit breaks, they’ll call someone and ask to replace the compressor for $4,000 because that’s more affordable than spending $15,000-$20,000 on a new unit. But Band-Aid fixes won’t last. The rest of the system continues to age, and these units aren’t made to last forever.”
Over just the last 10 years, HVAC equipment has evolved exponentially, and the proof is in the performance.
“The rooftop equipment most commonly being replaced is operating at 10-, 11-, and 12-SEER,” he said. “These units degrade at about 2% each year after five years. So when replaced with a 21- or 22-SEER unit with an economizer, customers receive a 45%-65% reduction in energy use. There is also a pound-for-pound reduction in the amount of carbon being produced, which is good for everyone.”
Today’s buildings are more than structures, said Christian Senu, managing director of light commercial, North America, Carrier. They are indoor environments filled with opportunities to improve occupant health and productivity and increase building energy and operational efficiency. With solutions and services across HVAC, fire, security, building automation, access control and more, manufacturers of high-efficiency HVAC equipment — like Carrier — can help customers address the unique sustainability needs of all types of buildings.
“High-efficiency units and applications use less energy, thus making a significant collective impact in reducing carbon and can help save business owners money on monthly utility bills,” said Senu. “The greater the efficiency, the greater potential savings on energy bills.”
While every facility is different, Subbloie said most fast-food and quick-service restaurants implementing the EEaaS model can expect savings in excess of 20%, with many eclipsing 50%.
“For the burger joints, you’re looking at around a 20% reduction, and casual dining establishments, which have larger footprints, commonly achieve 30% or more in reductions,” he said. “In addition to the energy savings, Mother Earth gets all of the benefits as well. There’s no profit sharing with Mother Earth — she gets to keep it all.”
All 2,000 of the Carrier WeatherExpert units Budderfly purchased are already earmarked for projects, and Subbloie anticipates many more installs will follow in the near future.
“Our results show that the replacement market is thriving,” he said. “We’re planning to implement 4,000 units by the end of the year. By the end of next year, I’d be shocked if we haven’t replaced somewhere between 6,000 and 10,000 units.”
Through mandatory maintenance agreements, contractors are connected with the equipment for years to come.
“We are motivated to maintain this equipment to the highest standard,” said Subbloie. “We implement 10-year maintenance contracts. Our model makes is proactive. If contractors want to build a business model with predictability, EEaaS is the way to do it.”
Honeywell Reacts and Adapts
Honeywell has entered the EaaS market as well through an investment in Redaptive, a service provider that funds and installs energy-saving and energy-generating equipment. The investment is designed to combine Honeywell’s experience in energy savings performance contracting (ESPC) and building controls capabilities with Redaptive’s data technology and EaaS platform, providing customers with more ways to baseline current energy usage and reduce consumption to achieve their sustainability goals with little-to-no upfront investment.
“With EaaS, nothing is placed on the client’s balance sheet,” said Adhishesh Sood, global strategic partnerships manager, sustainable buildings, Honeywell. “The capital expenditure and assets are owned by Redaptive. All the energy data captured through the installation of smart meters on the customer side allows for us to pull precise energy usage data, which guides future decision on energy conservation. When you combine these efficiency measures with the analytics Honeywell can run on its software, this becomes a very powerful value proposition for any customer.”
A contractor working with Redaptive can expect a long-term partnership with little to no rigmarole.
“Contractors benefit through long-term maintenance and operations contracts,” said Sood. “These are in place for many years, so the work is guaranteed. Additionally, backed by a brand like Honeywell, customers know the contractors on their jobs are part of a trusted network. The job is guaranteed and supported by Honeywell, which boosts that contractor’s profile as well.”
EaaS contract work may serve as a gateway to future opportunities as well.
“Once a contractor has proven competency in rooftop HVAC units, there are opportunities to expand the scope of the work into lighting, controls, etc.,” Sood said. “Companies prefer to work with those they trust, so if another energy conservation opportunity arises, we may be more apt to train a contracting company we have experience with rather than find someone new.”
The Honeywell and Redaptive EaaS model comes with a guaranteed cost and energy savings warranty. Following a four- to six-month data gathering period, the energy team will offer a return on investment based on the specific energy conservation methods utilized.
“Implementing high-efficiency rooftop units that exceed ASHRAE 90.1 offers significant energy savings,” said Sood. “We offer customers a specific percentage of energy savings over a set period of time, and if we don’t hit that mark, we’ll write you a check for the remainder.”
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