Energy Performance Optimization Guide

Transcription

1 NRDC Ceter for Market Iovatio NOVEMBER 2012 IB: B Eergy Performace Optimizatio Guide Project Director: Wedy Fok, RA, LEED AP Ceter for Market Iovatio Natural Resources Defese Coucil Pricipal Authors: Wedy Fok Jay Orfield Laure Zullo Cotributig Authors: Greg Hale Yeria Mugica

2 About NRDC NRDC (Natural Resources Defese Coucil) is a atioal oprofit evirometal orgaizatio with more tha 1.3 millio members ad olie activists. Sice 1970, our lawyers, scietists, ad other evirometal specialists have worked to protect the world s atural resources, public health, ad the eviromet. NRDC has offices i New York City, Washigto, D.C., Los Ageles, Sa Fracisco, Chicago, Livigsto, ad Beijig. Visit us at About NRDC's Ceter for Market Iovatio The core missio of the Ceter for Market Iovatio (CMI) is to expad the impact of the Natural Resources Defese Coucil (NRDC) by creatig market coditios that will redirect capital flows toward sustaiable uses. We believe that egagig maistream capital is a critical compoet i achievig our commo goals. We do so by egagig with the busiess commuity to articulate ad implemet sustaiable value propositios, with a curret focus o eergy efficiecy, water maagemet, ad regeerative agriculture. A collaborative approach betwee buildig owers ad occupats is essetial to optimizig the performace of commercial office buildigs, ad teat demad will be a critical factor i drivig the market toward optimizig commercial buildig performace. The Natural Resources Defese Coucil s Ceter for Market Iovatio (CMI) has established a High Performace Demostratio Project (the Project ) aimed at acceleratig demad for high performace teat spaces i the commercial office market by demostratig their ecoomic beefits. The Project aims to promote the compoudig effect of ower/teat collaboratio, as teats who value high performace spaces choose to locate or remai i buildigs with highly efficiet cetral systems ad trasparet eergy maagemet practices. As a result, buildig owers ivestig i cetral system eergy efficiecy improvemets will ot oly garer operatig savigs, but will also gai competitive advatage i attractig ad retaiig these high value teats. Ackowledgmets The pricipal authors of this report wish to ackowledge ad thak for providig iformatio or material, reviewig drafts, or otherwise assistig i preparig this guide: Kyug-Ah Park ad Kevi Smith, Goldma Sachs; Elizabeth Heider, Emily Shackles, Jimmy Mitchell, SKANSKA; Joh Weale, Itegral Group; Adrea Burham, Hey va Lambalge, QUEST Eergy; Steve Syder, Kelly Smith, Olivia Nix, Clay Nesler, Paul Rode, Johso Cotrols; Grace Gill ad Lisa Coplad, NRDC. CMI has egaged several idustry leaders as techical advisors for the Project, icludig Goldma Sachs, Johso Cotrols, Joes Lag LaSalle, Malki Holdigs, SKANSKA, ad ULI/Greeprit. This work is made possible by the geerous support of Goldma Sachs ad the Rockefeller Foudatio. Cover photo: Nicholas va der Grite, Photographer for the Empire State Buildig NRDC Director of Commuicatios: Phil Gutis NRDC Deputy Director of Commuicatios: Lisa Goffredi NRDC Policy Publicatios Director: Alex Keaugh NRDC Publicatios Editor: Carlita Salazar Desig ad Productio: Taja Bos Natural Resources Defese Coucil 2012

3 TABLE OF CONTENTS Itroductio...2 I. Eergy Modelig...4 II. Icremetal Costig...8 III. Fiacial Aalysis...10 PAGE 1 Eergy Performace Optimizatio Guide I Ceter for Market Iovatio: High Performace Teat Demostratio Project

4 INTRODUCTION This Eergy Performace Optimizatio Guide is a resource describig how to develop, quatify, implemet, ad measure eergy performace solutios i a commercial office space. The Natural Resources Defese Coucil s (NRDC) Ceter for Market Iovatio (CMI) developed, tested, ad refied this process durig the executio of live teat projects icluded i its High Performace Teat Demostratio Project. The goal was to fid commo solutios applicable across a broad spectrum of teat coditios. The guide features three modules: Project Iitiatio, Value Aalysis, ad Implemetatio/Measuremet ad Verificatio. It is a framework that works together with a set of supportig tools to map out a eergy performace aalysis process that is itegrated ito each phase of the teat s process site selectio, desig, costructio, ad occupacy. The guide provides a itroductio to the process of evaluatig the ecoomics of eergy performace for teats, buildig owers, ad their represetatives. I doig so, real estate decisio makers are ecouraged to demad a straightforward ad trasparet value aalysis of eergy ad idoor evirometal quality solutios to be cosidered i fittig out a ew space upo a teat s relocatio, or retrofittig a existig space upo lease reewal. However, the guide is desiged to go beyod the itroductory level, to serve as a i-depth resource providig teats ad their desig teams with specific istructios ad tools PAGE 2 Eergy Performace Optimizatio Guide I Ceter for Market Iovatio: High Performace Teat Demostratio Project

5 for icorporatig the quatificatio of eergy performace measures ito stadard build-out desig ad costructio practice. The guide is iteded to help build the market expertise that will be eeded to meet the demad for this professioal service, ad to ecourage a fiacig market to support implemetatio of high performace projects. By uderstadig the process, teat s project teams (architects, egieers, cotractors, ad project maagers) will have the ability to defie the cost effectiveess of proposed eergy performace optios at the right time durig the desig process to iform a cliet s decisio-makig. The process is outlied to complemet the milestoes already takig place i the project team s carefully choreographed buildout process. Depedig o the teat space size, scope, ad schedule, it is possible either to apply the process to the etire leased premises or to apply the results ad learig from early phases to future floors to be built out i the same buildig or other spaces withi the teat s portfolio. Value Aalysis: Quatifyig Eergy Performace Durig Desig CMI is itroducig the Value Aalysis as the first module to the guide, as it serves to achor the ecoomic case for eergy performace durig the teat s lease cycle. This quatitative process sythesizes the project developmet aalysis usig quatitative metrics. Eergy use modelig ad costig aalytics are used to test eergy performace scearios ad determie a optimal eergy performace package. The Value Aalysis icludes a fiacial scorecard ad a arrative describig the evaluatio process ad techical factors relatig to the eergy performace recommedatios, ad is timed to alig to the teat s desig ad decisio-makig process. This provides the teat ad its existig facilities/ desig team with the right iformatio to determie tiers of good, better, ad best packages of eergy performace measures to icorporate ito the build-out of the space. The Value Aalysis combies data geerated by the Eergy Modelig ad Icremetal Costig steps, to idetify ad recommed the highest value set of Eergy Performace Measures (EPMs) to icorporate ito the desig of a teat s ew premises. Thus, it provides eergy efficiet alteratives to code-compliat desigs ad systems without dimiishig effectiveess, quality, or user comfort or satisfactio: I. Eergy Modelig is coducted to iform early desig decisios. Results are used to recommed measures for buildig systems, lightig, cotrols, ad plug loads i order to optimize eergy use. The model measures the impact of potetial scearios ad compares them to a baselie, code-compliat space. II. Icremetal Costig is performed to determie the additioal first cost (if ay) required to upgrade from a baselie desig elemet to a high performig alterative. III. Fiacial Aalysis closely relates capital ad operatig expeses to oe aother by quatifyig the costs ad beefits. It is iteded to determie the most cost effective opportuities for eergy savigs. A eergy performace recommedatio, documetig the evaluatio process ad outcomes of the eergy modelig, costig aalysis, ad the program eeds, frames the fiacial aalysis. The Value Aalysis projectios quatify aual ad lease-term fiacial impact ad take ito accout possible icetives ad tax deductios. They also determie the payback period of each measure ad a optimal package of EPMs, together with the Net Preset Value ad Retur o Ivestmet of the optimal EPM package. The evaluators should iclude the project s desig, facilities, costructio, accoutig, ad maagemet teams. PAGE 3 Eergy Performace Optimizatio Guide I Ceter for Market Iovatio: High Performace Teat Demostratio Project

6 I. ENERGY MODELING Eergy modelig is a computer simulatio used by egieers ad architects to uderstad the implicatios of desig o the eergy performace of a buildig or teat space. Eergy modelig is a powerful tool whe used early i the itegrated desig process. Icorporatig eergy modelig allows for aalysis throughout the desig process; it ca be used i applyig for potetial icetives, tax deductios, ad Leadership i Eergy ad Evirometal Desig (LEED) ehaced commissioig credits, ad it ca support post-occupacy measuremet ad verificatio ad ogoig commissioig. Select a eergy modeler who ca parter closely with the project team to work through differet desig scearios (see the sample Request for Proposal). For the purpose of a high performace teat buildout, the eergy modelig should be performed durig the Desig Developmet (DD) ad Costructio Documet (CD) stages. Schematic Desig DESIGN DEVELOPMENT CONSTRUCTION DOCUMENTS CONSTRUCTION OCCUPANCy MENU OF MEASURES ENERGY MODELING MEASUREMENT & VERIFICATION The applicatio of the Eergy Modelig tool etails the followig steps: 1. Select a modelig tool There are may eergy modelig software tools available o the market today. The suitability of a modelig tool will vary depedig o a project s goals ad scope, where the project is i the desig process, ad the tools with which the eergy modeler, project egieer, ad architect are most familiar. The most widely used eergy modelig tool is the Departmet of Eergy s (DOE) ope source equest iterface for the DOE-2 egie. For a list of may available modelig tools ad detailed descriptios, please see the America Istitute of Architects (AIA) Guide to eergy modelig. 1 I order to covey streamlied modelig results, the modeler may use the Sample Eergy Model Report Template. 2. Create a baselie eergy model for the space Eergy modelig predicts the aticipated aual eergy cosumptio of a buildig (or a teat space withi a buildig) based upo various desig ad operatioal assumptios. 2 The modelig software typically evaluates the performace of the space over a characteristic oeyear period to accout for seasoal differeces i weather, sulight, ad occupacy. The model also icorporates assumptios regardig operatios ad maiteace of the space ad equipmet i order to develop the most accurate predictio of how the space will actually perform. The eergy modelig process should be discussed durig schematic desig, ad commece at 50 percet DD. The model will compare the projected eergy cosumptio of the teat space assumig certai desig scearios PAGE 4 Eergy Performace Optimizatio Guide I Ceter for Market Iovatio: High Performace Teat Demostratio Project

7 (icorporatig differet eergy performace measures) agaist the projected eergy performace of a baselie desig. The first step is to model the baselie eergy cosumptio for the space, usig existig whole buildig parameters ad assumig miimal compliace with local eergy code requiremets for the teat space. The architect, egieer, ad eergy modeler must discuss the possible baselie optios ad defie the best poit of compariso depedig o what data metrics provide the best eergy improvemet values. I may cases, a teat s busiess-as-usual desig icorporates above-code desig elemets or the base buildig may have udergoe eergy efficiecy retrofits, which affect the aticipated baselie eergy cosumptio of a space. Thus, the modeler may develop a adjusted baselie, i order to accout for either a buildig ower s recet eergy capital improvemets or a teat s plaed above-code desig. saved by utilizig daylight harvestig caot be saved agai through high efficiecy lightig, thus iterative modelig would show less eergy savigs for this package of EPMs compared to modelig the measures idepedetly. The output of the model will provide estimated aual eergy savigs based upo the selected package of measures as compared to the modeled baselie sceario, which ca be broke out ito idetified savigs for both the teat space ad the base buildig systems. For example, certai EPMs may reduce the overall demad o the cetral buildig systems, icludig cetralized coditioed air, steam, codeser, ad chilled water savigs. Depedig o the utility billig structure i the lease, such savigs are likely to accrue to the buildig ower (or be shared with all of the other teats i the buildig). Savigs from lightig, plug load, ad server room EPMs typically beefit the teat directly. 3. Model the Eergy Performace Measures After modelig a baselie desig i the software, the team ext icorporates each idividual Eergy Performace Measure (EPM) uder cosideratio i early eergy discussios separately ito the model. This helps the team uderstad the effect that each specific measure has o the projected eergy performace i the teat space. EPMs may iclude evelope, lightig, plug load, server room eergy reductio ad heatig, coolig, ad vetilatio (HVAC) strategies. The model output will iclude eergy savigs delivered i uits of eergy (e.g. kwh or BTU),ad for a teat eergy model, the primary eergy use quatified is electricity Create a package of EPMs ad perform iterative modelig to determie its eergy savigs Based o the fidigs of the idividual EPM study, the desig team will group a sesible set of measures ad order them to 1) reduce loads, 2) icrease equipmet efficiecy, ad 3) address occupat behavior through cotrols or automated techology. Packages of measures should be grouped ad modeled to delieate good, better, ad best eergy performace scearios. I order to uderstad the iteractive effects of measures withi a package, the model must be ru through repeated cycles icorporatig a ew EPM with each ru, a process called iterative modelig. The results of iterative modelig predict the cumulative effect of implemetig a package of EPMs, which accouts for iteractios betwee idividual measures that may affect overall eergy cosumptio. For example, a uit of eergy 5. Fialize the package selectio The team should the use the projected eergy savigs data from the model for potetial EPM packages uder cosideratio, combied with prelimiary icremetal costig estimates for the measures ivolved (see Icremetal Costig), to perform a rigorous fiacial aalysis that will determie the ecoomic implicatios of the respective EPM packages (see Fiacial Aalysis). The teat ad its desig team should the select a fial package of EPMs based o evirometal (i.e. eergy reductio) ad ecoomic value aalyses that meet the team s performace ad ivestmet goals. At this poit, the team should ru a fial eergy model icorporatig the decisios to be icluded i the costructio drawigs. The results from the fial eergy model may be recalibrated after costructio ad occupacy, ad the used to verify performace of the space. If ay elemets of desig chage durig costructio, the model will eed to be updated for the most accurate results. 6. Perform measuremet ad verificatio Whe costructio is complete ad the space is occupied, the team may elect to implemet a measuremet ad verificatio (M&V) process. It is recommeded that the M&V process commece after equipmet has bee commissioed, all occupats are settled i the space, ad a facility operatios process is established. The M&V process requires the collectio of actual eergy cosumptio from meters ad localized weather data, as well as verificatio of occupacy ad operatioal assumptios, i order to calibrate the eergy modelig tool. Oce the model is calibrated, the team may use the tool to check that ogoig eergy performace is i PAGE 5 Eergy Performace Optimizatio Guide I Ceter for Market Iovatio: High Performace Teat Demostratio Project

8 High Performace Eergy Modelig Process Overview 1 Create baselie model for the space, typically the miimum performace required by local eergy code (the High Performace Demostratio Project uses ASHRAE as the baselie). May create a adjusted baselie to accout for curret base buildig eergy efficiecy retrofits ad teat s typical desig. 2 Model eergy performace measures (EPMs) idividually agaist the baselie to evaluate the potetial eergy savigs produced by each. 3 Select idividual measures that are desig-feasible ad show potetial eergy savigs to create oe or more prospective package(s) of EPMs. 4 Perform iterative modelig to determie the eergy savigs of the package(s) of EPMs, takig ito accout iteractive effects of measures. 5 Use iterative model results ad prelmiary icremetal costig iformatio to perform fiacial aalysis, fialize the package selectio, ad ru a fial eergy model. 6 After occupacy, perform measuremet ad verificatio (M&V) to calibrate the eergy model, which ca the be used as part of a cotiuous commissiog process. lie with the projectios of the model ad make iformed operatioal adjustmets i the space if ecessary. If the buildig ower maitais a eergy model to assess whole buildig eergy performace, the teat s eergy model ad ogoig eergy use aalysis may be icorporated ito the master model for improved trackig of teat eergy use. Detailed Eergy Modelig Iputs ad Assumptios 4 Geeral Geometry/Massig ad Form Buildig shape ad orietatio Program pricipal buildig fuctio (e.g. small office, large office, hospital, hotel, etc.) Total floor area Number of floors Thermal zoig of floors (perimeters ad core) Floor-to-floor height Floor-to-ceilig height Evelope Widow dimesios (for each orietatio if differet, lower vs. upper floors if differet) Glazig sill ad head height (above floor, each widow type) Widow-to-wall ratio (for each orietatio if differet, lower vs. upper floors if differet) Shadig geometry (for each orietatio if differet) Widows ad skylights (solar heat gai coefficiet, U-value ad visible light trasmissio, frame-type) Wall, roof, ad foudatio costructio/makeup Iterior partitios, iteral mass (furiture) Ifiltratio assumptios (ifiltratio schedule weekday, weeked, holiday) Iteral Loads ad Schedules Aticipated occupacy (average umber of people) Lightig power desity (average W/ft 2 ) Daylight sesors, occupacy sesors Plug load power desity (average W/ft 2 ) PAGE 6 Eergy Performace Optimizatio Guide I Ceter for Market Iovatio: High Performace Teat Demostratio Project

9 Exterior lightig peak power Vetilatio/outdoor air requiremets Elevator (type, peak motor power, schedule of use) Ecoomizers, eergy recovery Occupacy schedule (summer/witer; weekday, weeked, holiday hours of use) HVAC fa operatio schedule (summer/witer; weekday, weeked, holiday hours of use) Lightig schedule (summer/witer; weekday, weeked, holiday hours of use) Heatig schedule of operatio (witer weekday, weeked, holiday hours of use) Plug load schedule (summer/witer; weekday, weeked, holiday hours of use) Coolig schedule of operatio (summer weekday, weeked, holiday hours of use) Exterior lightig schedule (summer/witer; weekday, weeked, holiday hours of use) Miimum outdoor-air schedule (weekday, weeked, holiday hours of use) HVAC Systems ad Schedules System type (heatig ad coolig) Sizes (capacity ad efficiecy) or autosize to desig day Distributio type (e.g. VAV termial boxes with electric reheat, uder-floor pleum, etc.) Thermostat setpoit ad setback (heatig ad coolig) I more detailed aalyses, modeler will also eed: fa efficiecy; pump type/efficiecy; coolig tower type/ efficiecy; service water type/efficiecy/volume/t-setpoit; ad service hot water schedule of use. 1 A Architect s Guide to Itegratig Eergy Modelig i the Desig Process. The America Istitute of Architects (AIA, 2012) pp Available at 2 Also called Buildig Eergy Modelig or BEM. 3 Some modelig software has the ability to icorporate utility rate data to provide estimated cost savigs. 4 Ibid 1., p. 79. PAGE 7 Eergy Performace Optimizatio Guide I Ceter for Market Iovatio: High Performace Teat Demostratio Project

10 II. INCREMENTAL COSTING Cost is a critical compoet i evaluatig the fiacial implicatios of icorporatig various eergy performace measures (EPMs) ito a teat build-out project. Whe desigig a high performace space, oftetimes the team will cosider EPMs that are ot stad-aloe desig features, but rather chages to a stadard desig that icrease eergy efficiecy. Therefore, it is importat to determie the additioal sums (et of cost avoidace from reducig loads ad equipmet) that will be icurred whe implemetig a high performace desig as compared to the relevat baselie budget. This differece is referred to as the icremetal cost of the high performace desig. The party best positioed to perform the EPM icremetal costig aalysis will typically be the teat s geeral cotractor, but i some cases the teat may choose to retai a third party costig cosultat. To esure cosistecy of results throughout the High Performace Teat Demostratio Project, CMI retaied SKANSKA to perform (or peer review) the costig aalysis for each of the participatig teat build-out projects. Determie the baselie cost Depedig o the teat s desig itet, busiess-as-usual costructio budget, ad timig of the aalysis, the baselie budget may be: 1. Cost of a stadard, code compliat desig, if o desig is yet i place; or 2. Project costs per a busiess-as-usual budget, if the teat plas to implemet quality or performace stadards above a basic code-compliat desig as part of the teat s typical desig prototype or desig already i progress. PAGE 8 Eergy Performace Optimizatio Guide I Ceter for Market Iovatio: High Performace Teat Demostratio Project

11 I order to determie the icremetal cost of each EPM, the team must first determie the baselie cost for the equivalet desig as outlied above. The desig used to estimate the baselie costs should be cosistet with the desig the project team has selected for the correspodig eergy model. Thus, if the team uses a code-compliat baselie to model eergy savigs from a EPM, the icremetal costig should also utilize a code-compliat desig to establish the baselie cost. However, if the eergy model uses a adjusted baselie that accouts for above-code desig features or quality stadards, the icremetal costig should use the project as-desiged drawigs ad specificatios as a baselie. It is importat that the costig baselie is cosistet with the eergy modelig baselie so that the projected eergy savigs accurately map to a associated icremetal cost. Determie the icremetal cost To begi the icremetal costig process, the project team must provide the geeral cotractor with the followig iformatio: 1. Architectural, electrical, ad mechaical drawigs as desiged by the architect 2. Specificatios for all relevat equipmet icluded i the as-desiged drawigs 3. Eergy Modelig Report, icludig descriptios of proposed EPMs 4. Ay additioal iformatio, specificatios, or details the team has about proposed EPMs 5. Ay relevat base buildig iformatio Determiig icremetal costig is a collaborative process amog the eergy modeler, the project egieer, ad the geeral cotractor. As it is usually ot realistic for a project to pay for two full sets of drawigs (oe baselie ad oe high performace), estimates to istall the EPMs must be based upo the desig i the eergy model, likely specificatios, ad the egieer s best iformatio. If the project team egages i the Value Aalysis process early eough to determie a possible package of EPMs, measures ca be icorporated as alterates to the as-desiged costructio drawigs for improved costig accuracy. Usig the desig drawigs, specificatios, ad EPM iformatio, the cotractor will obtai costructio bids from the various subcotractors ivolved. The estimates should isolate the cost of each idividual EPM, eve if its impact is spread across several trades, to allow the project team to idividually aalyze the icremetal cost of each measure (see the sample Costig Summary Sheet). The direct costructio costs should first be idetified ad isolated ad the markups should be applied to the differetial cost. The icremetal cost of a EPM should et out avoided costs from reducig eergy loads ad equipmet from ay additioal sums required to istall eergy cost savig equipmet. See the example costig below: Example Item Estimate (1) Estimated Direct Costructio Cost for Baselie Desig $5,000 (1) Estimated Direct Costructio Cost for EPM $7,500 (2) Icremetal Cost without Markups $2,500 (3) Local Tax o Materials Oly 8.75% $110 Desig Cotigecy 8% $200 (4) Geeral Cotactor GC s ad Fees 10% $250 (5) Bods ad Isurace 2% $50 (6) Icremetal Cost with Markups $3,110 Notes: (1) Estimated direct costructio costs iclude subcotractor overhead, profit, ad fee. Does ot iclude local sales tax. (2) Icremetal cost without markups betwee the baselie desig ad high performace desig. (3) Icludes local sales tax o materials oly. Assumes 50 percet of the icremetal cost is materials ad a tax rate of 8.75 percet. (4) Geeral cotractor s geeral coditios (GC)/maagemet costs ad fee. (5) Paymet ad performace bod ad geeral cotractor s liability ad builder s risk isurace. (6) Total estimated icremetal cost icludig markups betwee the baselie desig ad high performace desig.. PAGE 9 Eergy Performace Optimizatio Guide I Ceter for Market Iovatio: High Performace Teat Demostratio Project

12 III. Fiacial ANALYSIS Buildig upo the outputs of eergy modelig ad icremetal costig, fiacial aalysis helps to assess the proposed ivestmet i eergy performace measures (EPMs) by quatifyig the costs ad beefits, closely relatig capital ad operatig expeses to oe aother. 1. Idetify the followig iputs: User Iput Baselie Eergy Cosumptio (kwh) Modeled Eergy Reductio (kwh) Total Area, Teat Space (ft 2 ) Lease Period (years) Utility Base Rate $/kwh Utility Escalatio Rate (%/year) Icremetal First Cost of EPMs ($) Eergy Efficiecy Icetives ($) Discout Rate (%) 1 Likely Source Eergy Model Eergy Model Lease Documet Lease Documet Utility Compay or Buildig Ower Idustry Projectios Cotractor Costig City, State, ad Federal Programs; Utility Compaies Teat 2. Idetify goals ad evaluatio metrics for ivestmet i Eergy Efficiecy: Evaluatio Metric Likely Rage Adjusted Payback Period (Net of Icetives) 3 to 5 years Retur o Ivestmet > 20% Iteral Rate of Retur > Discout Rate Defiitios: Payback Period is the legth of time required to recover the cost of a ivestmet. The payback period of a give ivestmet or project is a importat determiat of whether to udertake the ivestmet or project, as loger payback periods will typically require loger ivestmet horizos. Retur o Ivestmet (ROI) is a performace measure used to evaluate the efficiecy of a ivestmet or to compare the efficiecy of a umber of differet ivestmets. To calculate ROI, the beefit (retur) of a ivestmet (et of iitial cost of ivestmet) is divided by the cost of the ivestmet; the result is expressed as a percetage or a ratio. Payback Period formula: Icremetal First Cost Aual Eergy Cost Savigs ROI formula: NET PRESENT VALUE Adjusted Icremetal First Cost PAGE 10 Eergy Performace Optimizatio Guide I Ceter for Market Iovatio: High Performace Teat Demostratio Project

13 Retur o ivestmet is a popular metric because of its versatility ad simplicity. That is, if a ivestmet does ot have a positive ROI, or if there are other opportuities with a higher ROI, the the ivestmet should be ot be udertake. Net Preset Value (NPV) is the differece betwee the preset value of cash iflows ad the preset value of cash outflows. NPV is used i capital budgetig to aalyze the profitability of a ivestmet or project. Iteral Rate of Retur (IRR) is the discout rate ofte used i capital budgetig that makes the et preset value of all cash flows from a particular project equal to zero. Geerally speakig, the higher a project s iteral rate of retur, the more desirable it is to udertake the project. As such, IRR ca be used to rak several prospective projects a firm is cosiderig. Assumig all other factors are equal amog the various projects, the project with the highest IRR would probably be cosidered the best ad udertake first. 3. Idetify ad register for all qualifyig eergy efficiecy icetives, ofte available from: 3.1 City, State, Federal Programs [Federal tax deductio uder 179D may allow for accelerated depreciatio ($0.30-$1.80 / ft 2 of teat build-out)] 3.2 Utility Compaies 3.3 State Eergy Offices 4. For each Eergy Performace Measure (EPM) idetified, extract the followig: 4.1 Aual Eergy Use Reductio (kwh) from the Eergy Model 4.2 Icremetal First Cost from the Cotractor s Costig Eergy Performace Measure Aual Eergy Use Reductio Aual Eergy Cost Savigs Icremetal First Cost Simple Payback Plug Load Reductio 37,757 kwh 4.1% $5,664 ($24,700) 4.4 years For each EPM, calculate the followig: 5.1 Aual Eergy Cost Savigs (Aual Eergy Use Reductio x Utility Base Rate) 5.2 Simple Payback 2 (Icremetal First Cost / Aual Eergy Cost Savigs) 5.3 Cosider these outputs whe combiig idividual EPMs ito tiers of good, better, ad best Packages of Measures to icorporate ito the desig of the space. Eergy Performace Measure Aual Eergy Use Reductio Aual Eergy Cost Savigs Icremetal First Cost Simple Payback Plug Load Reductio 37,757 kwh 4.1% $5,664 ($24,700) 4.4 years 5.1 Calculatio: 37,757 kwh x $0.15/kWh 5.2 Calculatio: $24,700 / $5, For each Package of Measures: 6.1 Extract the Aual Eergy Use Reductio 3 (kwh) from the Eergy Model 6.2 Calculate Eergy Cost Savigs (Aual Eergy Use Reductio x Utility Base Rate) PAGE 11 Eergy Performace Optimizatio Guide I Ceter for Market Iovatio: High Performace Teat Demostratio Project

14 6.3 Sum the Icremetal First Costs of all icluded EPMs 6.4 Calculate Simple Payback without Icetives (Icremetal First Cost/Aual Eergy Cost Savigs) Eergy Performace Measure Aual Eergy Use Reductio Aual ENERGY COST SAVINGS Icremetal First Cost Simple Payback Evelope 31,464 kwh 3.5% $4,720 ($21,850) 4.6 years Lightig 65,117 kwh 7.1% $9,768 ($47,500) 4.9 years Plug Loads 37,757 kwh 4.1% $5,664 ($24,700) 4.4 years Heatig 58,915 kwh 6.5% $8,837 ($43,700) 4.9 years Coolig 98,496 kwh 10.8% $14,774 ($59,850) 4.1 years Vetilatio 18,696 kwh 2.1% $2,804 ($13,300) 4.7 years Package of Measures 310,445 kwh 34.0% $46,567 ($210,900) 4.5 yrs Apply for all registered Eergy Efficiecy Icetives i accordace with the selected Package of Measures: [Note that uder may icetive programs, the Eergy Modelig ad Value Aalysis processes described herei will allow teat to qualify for a higher level of fiacial icetives.] 7.1 Calculate the Adjusted Icremetal First Cost (Icremetal First Cost mius Eergy Efficiecy Icetives) 8. Dowload CMI Value Aalysis Tool BETA ad use it to calculate the followig: 8.1 Adjusted Payback Period (Net of Icetives) 8.2 Retur o Ivestmet 8.3 Iteral Rate of Retur Example Value Aalysis Tool BETA showig User Iputs ad Value Aalysis User Iputs Value Aalysis Baselie Eergy Cosumptio 912,000 kwh Lease Period Eergy Savigs $487,191 Modeled Eergy Reductio 310,445 kwh Adjusted Icremetal First Cost ($171,000) Total Area, Teat Space 95,000 ft 2 Adjusted Payback Period 3.6 years Lease Period 4 10 years Net Preset Value (NPV) $158,223 Utility Base Rate $0.15/kWh Retur o Ivestmet 93% Utility Escalatio Rate 1%/year Iteral Rate of Retur (IRR) 25% Icremetal First Cost of EPMs ($210,900) Eergy Efficiecy Icetives $39,900 Discout Rate 7.0% 1 Teat s miimum acceptable rate of retur o ivestmet. 2 Simple Payback period does ot accout for Utility Rate Escalatio or time-value of moey. 3 Due to the iteractio amog idividuals EPMs, the Eergy Use Reductio for the Package of Measures is ulikely to equal that of the sum of the idividual EPMs. 4 Cosider possible extesios to the iitial Lease Period. PAGE 12 Eergy Performace Optimizatio Guide I Ceter for Market Iovatio: High Performace Teat Demostratio Project

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