For smaller apartment and office buildings having less than 20 units, justifying the expense of installing the industry leading boiler heating control system has sometimes been tough.
Don’t get us wrong, small building managers and owners want to save money on fuel costs every bit as much as the big guys, especially in the northern regions of the country. And given that modern heating controls like the Heat-Timer® Platinum series have been shown to save anywhere from 15% to 50% on monthly heating costs, you would think that installing the industry leading heating control in a small apartment building would be a no-brainer.
If only life were so simple. It turns out that for savvy small building managers, the problem is math. In general, building managers are looking for heating upgrades to pay for themselves in fuel savings within 2-3 years. If the cost of the upgrade is largely fixed, then the more money you save, the quicker the payback.
So let’s do the math. Let’s assume some heating upgrade we are considering that includes a new heating control system will cost 20K installed and we conservatively project a savings of 20% per month on our heating bills as a result. It stands to reason that the larger your fuel bills, the more money you will save each month.
Here’s a graph that tells the story. The original data is from a real 100 Unit apartment building in NYC.
So a building that uses an average of $54,000/yr of energy could be expected to save 20% or $11000 on energy costs in its first year, assuming all other things remain equal. Allowing for normal fluctuations in fuel costs and the changing severity of winters it’s pretty clear that payback for a heating control investment happens sometime late in year 1 or early in year 2, exactly the kind of math that large building owners like.
Smaller Apartment Building, Different Math
Now let’s look at that same investment in a small building complex of less that 25 units. Since overall heating costs are lower, you save fewer dollars each month at the same percentage savings (20%). It takes longer here, to recover that fixed up-front investment.
For some small building owners, even this extended payout is worth it. Possibly they are in a colder area of the country or have an older building that is not energy efficient and spend more on energy. Possibly their situation is such that a heating control like our Heat-Timer® Platinum Series with internet and wireless apartment sensors will save them even more than the 20% conservatively estimated here. Perhaps the installation is also being done to comply with local laws enacted to cut greenhouse gas emissions and so there is a compelling legal reason. They may also be entitled to rebates from a number of city and state incentives for installation of these kinds of heating upgrades which reduces or even eliminates the upfront investment. All these considerations would act to either make the ROI for small buildings much more of a “no-brainer” or make longer payback more tolerable.
Or perhaps these small building owners/managers are simply more forward looking and see that they are in this for the long haul and don’t mind the longer payback. We have seen some of the most successful building management companies in the country take this longer view as they standardize their entire building portfolio around Heat-Timer® products. They gain energy savings for sure, but they also achieve product and training standardization, as well as centralized, internet-based portfolio management system for all their buildings. A centralized real-time, view, centralized reporting, and centralized monitoring and control via cell phone or internet. That’s a massive management EZ-button for serious building management professionals.
The Final Word on Heating Controls for Small Apartment Buildings
There are many reasons that heating controls like the Heat-Timer® Platinum Series can be justified, and are cost effective for smaller buildings. But if none of these reasons work for you and you are still wholly focused on the cost of this upgrade, then either you won’t do it all, or you’ll look for a cheaper solution with smaller upfront costs. After all, that’s another way to recover the costs of an upgrade sooner if all other things are equal.
Putting this into graphical form again tells the story. If we cut the cost of installation in the small building from $20K up front to closer to $10K, and keep all other assumptions the same, then our small apartment graph looks much nicer!
The problem with simply buying a cheaper control with cheaper installation costs is that all other things are not equal. To put it simply, some of the low-cost commercial controls you are likely to consider, will not deliver. The yearly fuel savings they advertise may claim 25% or more. But if you achieve 25% reduction of heating costs in a building with a low-cost control, then it is likely you would have achieved 35% – 40% cost reduction with a Heat-Timer® control. The problem is that you will now become locked into a simpler, cheaper solution that without a doubt, will not deliver the resident comfort, management convenience, mobile control, and fuel cost reductions, that the world’s leading boiler control can deliver. And down the road when you realize this, you’ll be looking at another significant upgrade investment.
If only small building managers could get the class leading performance of a Heat-Timer® Platinum Series Internet Control in a lower cost package designed specifically for small apartment complexes.
Heat-Timer Genesis® – Designed for Small Building Managers
Spoiler alert: Heat-Timer® is proud to announce that your patience reading this long blog will be rewarded! It turns out that as of August 1st, 2022, a heating control designed specifically for small building owners of 20 units or less, will be available. Our new control, Heat-Timer Genesis®, has the same industry leading, energy saving performance as our top of the line Platinum Series, and the same internet monitoring and wireless connectivity for up to 5 remote sensors. With this heating control, up-front equipment and installation costs are significantly reduced. Payback in most cases is within 1 – 2 years using conservative estimates of energy savings. Even faster now, given the high cost of fuel expected this winter.
Stay tuned to our website and social media for information on the next evolution of heating automation: Heat-Timer Genesis®.