HVAC

1. Energy considerations when replacing central air-conditioning components.

2.Improving the efficiency of existing air-conditioning equipment

3. Using geothermal heat pumps to cut down on heating costs

4. Tax breaks for low-energy furnaces.

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1: My business uses four central air-conditioning units, each with an outdoor and indoor component. Last summer, one of the components broke, so I took whatever equipment my contractor could get for me. It was an emergency, so I didn't have time to think about energy efficiency. The next time a component fails, I want to be prepared. What can you tell me about energy-saving air-conditioning equipment replacements?

A: Paul: Great question. This is a situation that many Vermont business owners face. Decisions about what air-conditioning equipment to get, and when to get it, can have a big impact on operational costs for years ahead. Being prepared in advance of equipment failures is a great way to help you manage and control your long-term costs.

Dan: First, let's address the equipment itself. You may be familiar with the SEER/EER rating (Seasonal Energy Efficiency Ratio/Energy Efficiency Ratio), which shows your equipment's efficiency. The higher the rating, the more energy-efficient the equipment is. What many people don?t know is that the rating on split air-conditioning systems like yours (comprised of an indoor and outdoor component) is accurate only when specific components are used together. You see, the specific, matched components of split systems are tested together for a SEER/EER rating. That rating is then given to each of the two components.

Paul: That's right. So if you replace one of the components with one from a different, matched pair, your energy-use could be different than the rating you see listed for the equipment. This has the potential to result in increased energy use and higher operating costs for the life of the equipment.

Dan: The other key decision concerns timing of replacement. Well-maintained split systems typically have a useful life of 20 to 25 years in light commercial applications. If one component of an aging split system fails, it may be cost-effective to replace the pair, due to the energy- and maintenance-savings potential of the new, efficient matched equipment.

Paul: That's especially true because you can get rebates from Efficiency Vermont for the purchase of matched, efficient equipment. Rebates are also available for energy-efficient packaged (non-split) systems. If you need help identifying replacement components that have been tested with the kind of equipment you already have, ask your service contractor for assistance.

Dan: In fact, it's a good idea to have that conversation with your contractor before equipment fails. When you create a long-term replacement plan - to retire aging equipment rather than waiting until after failure - your contractor will be better able to get the equipment you want when you need it, you'll be able to spread out replacement costs on a schedule that fits your budget, and you'll avoid unexpected equipment downtime.

Paul: One last consideration, which is important for both split and packaged systems: Maintenance. Speak to your service contractor about the different levels of service that he or she provides. An enhanced service contract may be more expensive, but regular, thorough service can mean longer equipment life and lower energy use.

2: I have a 10-year-old air conditioning unit in my 2,000 square-foot law office. I don't imagine it's the most efficient system, but it runs well so I'd like to avoid the expense of replacing it right now. Can you suggest cost-effective ways to improve the energy efficiency of an older air conditioner?

-MJD, St. Johnsbury, Vt.

A:
Paul: You're not alone. Since the air conditioning season is short in Vermont, a lot of small business owners have a hard time justifying the cost of new equipment. Luckily, there are quite a few easy, low-cost things you can do yourself to improve energy efficiency - even on an older unit.

Dan: Just sealing and insulating your cooling system properly can improve efficiency by as much as 20 percent. If you have a ducted system, inspect all the ducts and seal any leaks with UL-181 rated foil tape or mastic that remains flexible after setting, backing with fiberglass tape as necessary. We don't recommend the use of duct tape for this type of work, as the adhesive will fail over time. If your ducts run through an attic or crawl space, also have them insulated with foil-faced fiberglass. Keep the outside condenser unit clear of bushes or shrubs so air flows freely and shade it if possible.

Paul: Try setting your air conditioner thermostat to 78 degrees Fahrenheit or higher. You'll save up to 3 percent on cooling costs for each degree you raise the thermostat. And if the option exists, set your unit to recirculate the air, which uses less energy than cooling and dehumidifying outside air.

Dan: If you have a through-the-window or wall unit, make sure the wall opening is properly sealed around all four sides of the unit with weather stripping. No matter what type of unit you have, clean or replace the filters at least once a month during the cooling season and contact a contractor to service the entire unit annually.

Paul: If you ever decide to replace your air conditioning unit, look for one with the highest efficiency rating possible. Central air conditioning systems are rated in terms of SEER (Seasonal Energy Efficiency Ratio) and/or EER (Energy Efficiency Ratio). Currently, we recommend at least 14 SEER / 12 EER for units sized 65,000 Btu/h or less. Window air conditioners are rated in terms of EER and you should look for an ENERGY STAR labeled unit. Efficiency Vermont provides rebates as an incentive for purchasing high-efficiency air conditioning equipment.

Dan: Another way to lower your cooling costs is to replace incandescent light bulbs with fluorescents. Incandescent bulbs generate much more waste heat than fluorescents. In fact, 90 percent of the energy required to light an incandescent bulb is released in heat. That's a lot of wasted energy. A compact fluorescent uses two-thirds less energy and provides the same amount of light. We recently upgraded lighting and air conditioning at a chocolate factory in South Burlington. The owners expect to see huge savings this summer now that the cooling system isn't constantly overcoming the heat of the old light bulbs.

Paul: Rebates are also available for most fluorescent bulbs and fixtures. Visit the Efficiency Vermont Rebate Center at www.efficiencyvermont.com for a complete list of financial incentives available for your business.

3. I've got to do something to cut my heating costs.I own a building, on about an acre of land, which holds my retail store, warehouse, and shipping department. I've been hearing about geothermal heat pumps that bring free heat out of the earth. How do I tell if this would be a good way to heat my building?

- RA, Mad River Valley

A:
Paul: The first step to lowering heating costs - no matter what kind of heating system you use - is to reduce your heating needs, thereby reducing how large your heating system needs to be. This is particularly important with a geothermal heat pump (also called a ground-source heat pump), because its purchase and installation costs may be far greater than the cost of reducing your building's heating needs through energy efficiency.

Dan: I suggest having a commissioning authority do an assessment of your facility. These pros, sometimes referred to as commissioning agents, will tell you if there are actions that you can take to lower your building's energy needs and to reduce related maintenance costs and comfort problems. An agent will be able to give you cost estimates for the initial assessment as well as for recommended improvements. To find a commissioning authority, you can visit the Business Marketplace.

Paul: Now, about ground-source heat pumps (GSHP): The first thing to know is that this approach isn't free. A GSHP uses electricity to pump heat from the ground and many buildings need a backup heat system for Vermont's coldest days. Also, as I mentioned, the up-front costs can be considerable.

Dan: As for your question: The answer is different for every facility. Determining the answer for your building is a process that takes patience and a fair amount of information gathering. Considerations include your location, utility costs, heating needs, and more.

Paul: You can use a free guide that will tell you the benefits and potential drawbacks of GSHPs, walk you through the decision process, show you what info you'll need, and point you in the direction of objective professionals who can help. You'll also see an online form that will crunch your numbers for you so you can see if a GSHP makes financial sense for your building.

Dan: Good luck with the process and don't hesitate to contact Efficiency Vermont with any questions along the way. Thanks for asking about a technology that many business owners are wondering about these days.

4. I'm the owner of a small coffee shop that's doing pretty well, considering the economy. But I don't think we're doing well enough to pay to replace the old, unpredictable furnace. A customer mentioned hearing about tax breaks for low-energy furnaces. If they're big enough breaks, maybe I could afford a new furnace. Can you help me find out about this?

- BR, Mad River Valley, VT

Dan: Sure thing. It sounds like your customer was talking about federal tax deductions. These are available for specific energy-saving actions that enable a business facility to meet or exceed federally-accepted standards for energy efficiency. A separate set of incentives are available for homeowners. It's all is part of the Energy Policy Act of 2005 (EPACT), which will be in effect through the end of 2013.

Paul: It's a great idea to look into tax deductions when you're considering new equipment, lighting, a new building, or renovations. Keep in mind, however, that these deductions are only one part of the financial picture. Whether or not EPACT incentives sufficiently bring down your purchase price, upgrading to an energy-saving furnace could be a sound financial move and within your reach. It's important to factor the full range of bottom-line benefits of efficiency into the equation. Those benefits can include years of lower bills for energy and repairs, plus year-round comfort that can make customers choose your business over the competition. These factors can mean a high rate of return on your initial investment in energy-saving improvements.

Dan: In addition to the benefits Paul mentioned, it's also important to look at the cost side of the equation. That includes factors like the price of equipment and installation and - in some EPACT-supported projects - the cost of verifying that improvements are actually saving energy. While getting that verification for EPACT-linked lighting upgrades is a relatively easy, inexpensive process, you may need to hire a contractor or engineer to get the proof that EPACT rules require for new heating systems.

Paul: How do you figure out if a new furnace is a good financial move for you? I suggest that you first visit www.energytaxincentives.org to become more fully informed about EPACT. Then, talk to your tax professional about how much of an EPACT deduction you could get, based on your tax rate and the size of your facility (EPACT deductions are based on a business's square footage and vary with the kind of improvement made. For a furnace, EPACT offers a $.60 deduction per square foot.) Also, visit Efficiency Vermont's Business Rebate Center to learn about new rebates - just begun in 2010 - for non-residential furnaces and boilers. Note to readers served by Vermont Gas Systems or Burlington Electric Department: Give them a call with questions about boiler and furnace rebates.

Dan: Your heating contractor can then help you determine how the benefits of replacement (tax deductions, rebates, long-term savings from efficient equipment) compare with the price of equipment and installation and the cost of hiring someone to do an EPACT-required energy-savings verification.

Paul: If you do decide to move forward, Efficiency Vermont can work with your contractors and equipment suppliers to help you find the best equipment for your budget and your priorities. Best of luck with your decision and stay warm!