Strategically Green - A Smart Energy Retrofit for Office Parks

Fall 2012

Late last year the management of Menlo Business Park (MBP) faced several challenges. In a struggling economy Tarlton Properties (TPI), manager of the northern California business park, needed to reduce operating expenses, upgrade the property to retain and attract tenants, prepare the property for energy price volatility, gain greater management control and develop a deeper insight into the operating conditions of each building.

Dave Tarlton, vice president of construction and property management, knew that energy costs represented a significant and growing percentage of expenditures. He believed that improving building lighting and aesthetics, increasing automation and generating a green image would appeal to tenants. He asked himself, “What is possible and what ROI might we expect?”

MBP is a multi-tenant commercial property in Silicon Valley’s Santa Clara County comprised of 15 buildings, averaging 25 years in age, that house mostly biotech start-up and early-stage companies, in offices, labs and manufacturing facilities. Over time, assorted tenant improvements have created a varied matrix of legacy energy management control systems, lighting upgrades and Internet communication protocols.

In spite of the poor economy, Tarlton continued with a multi-year program to standardize and modernize the building campus. This included laying white reflective roofs and installing new rooftop HVAC units. However, as additional energy-saving steps were contemplated, Tarlton was concerned about potentially rising project costs and disruption while retrofitting the buildings. Little did he realize that his efforts would ultimately result in an award for creating one of the leading environmental projects of 2012 in Silicon Valley.

Through a series of fortuitous events Tarlton linked up with Karl Gee, an energy efficiency industry veteran with Progressive Lighting & Energy Solutions and Bob Holz, president of SiteOn Technologies, an Illinois-based energy and operations system integrator. The team believed they could take MBP’s modernization project to a new level. After listening to Tarlton’s issues over an extended period of time, Gee and SiteOn conducted an audit of the property and ran a pilot program. Among other findings, the pilot demonstrated a 40 percent reduction in lighting costs due to use of dimmable ballasts and controls. According to Holz, the project “will ultimately save MBP and its tenants $400,000 annually and reduce greenhouse gas emissions by more than one million pounds per year.” This represents an estimated 25 percent reduction in MBP’s overall energy usage. If energy rates go up, then the actual savings from reduced energy consumption could easily exceed this initial dollar estimate. The number of peak demand situations in a given year may also influence savings.

Based on the positive pilot results, SiteOn then proposed a more comprehensive project to provide a building operating system based on an open, Internet protocol. The software at the heart of the proposed system would provide MBP with various tools, charts and graphs to centrally see and manage the property’s entire energy infrastructure, all the way down to individual business spaces and zones.

The role of a systems integrator in the emerging “smart building” market is much more than specifying and installing technology. An integrator must:

  • Listen to the property manager’s unique issues;
  • Conduct site audits;
  • Develop design alternatives;
  • Work with equipment vendors;
  • Install and integrate new and existing building equipment with technology hardware and software;
  • Test and link the various communications connections; and
  • Liaison with the local utility and tradesmen throughout the project.

SiteOn quickly realized that in addition to installing controls for lighting and packaged rooftop units, the project would need to incorporate existing automation systems in five of the buildings, from various manufacturers, including Carrier, Johnson Controls and LON. SiteOn’s proposal for a technology agnostic approach would provide Tarlton with a future-proof integration platform to accommodate changes down the road.

Cisco Buildign Info Network

While the approach proposed by Gee and SiteOn (described below) is unique to MBP and California, it nevertheless provides a model for successful integrated energy efficiency. Additional advantages of the project include improved office park marketability, protection against rate increases and peak demand penalties, greater tenant satisfaction and several other non-direct benefits.

In late 2011 Tarlton Properties engaged SiteOn, Progressive Lighting and their partners to implement the modernization project. The design consisted of:

A centralized building operating software application, BUILDINGWORX, from CEPORT. SiteOn chose this cloud-based, building operating system to manage all structures and integrate them with existing sub-systems. The software utilizes inputs from devices (e.g., energy meters, two-way programmable communicating thermostats and building sensors that track occupancy) in each of MBP’s buildings in order to automatically adjust the lighting, heating and cooling to optimal levels based upon occupancy and other parameters.

Sensors on each lighting fixture to measure power consumption, temperature, ambient light conditions and occupancy at each fixture. This data allows the software algorithms to control area thermostats and light levels. The lighting can be turned up or down based upon these measurements.

“Scene-specific” control that allows variable lighting use in office space vs. warehousing, labs, hallways, etc., resulting in less electrical usage and a more high-tech look to the property.

Programmable thermostats that can be adjusted remotely over the Internet to account for special situations or tenant changes and improvements; to respond to signals from the electric utility during peak periods (demand response) or adjust to time varying electricity pricing that is coming to California’s commercial market.

A power line and radio frequency (RF) communications network that sends signals wirelessly or via the building’s existing power lines, to converse with thermostats and nearby outlets in each facility.

Customized computer servers that communicate with lighting sensors and controllers as well as HVAC systems and selected electrical plugs.

The integrator tuned its technology choices based on the retrofit nature of the project. SiteOn implemented a dual network approach using power line and RF wireless for HVAC controls, and an RF wireless network for lighting controls (via gateways that connected to the Ethernet), thereby eliminating the need to tear apart any walls or rewire the buildings. To accommodate existing tenants, the contractors and trade professionals arranged to perform 90 percent of the work after normal business hours.

Of course not everything worked perfectly on the first day the system was launched, especially given the need to integrate diverse equipment in a retrofit situation. For example, in one MBP building, several tenants initially complained that the HVAC system was not cycling on and off as needed. SiteOn discovered that the thermostat on/off codes required a slight programming adjustment to interact correctly with the cloud-based software.

In addition to integrating the technology, SiteOn also played an important role coordinating activities with the local electric utility, in this case Pacific Gas & Electric (PG&E). Utilities, in conjunction with public utility commissions and third-party programs, offer commercial users several financial incentives, especially in high-cost regions. Gee and SiteOn worked with partners to tap numerous commercially available funding programs from PG&E for commercial use to reduce the project’s payback periods and meet MBP’s financial objectives. According to Tarlton, “the potential for a return on our investment in less than five years was an incredibly compelling reason to move forward with the project.” The various utility programs offered rebates and loans targeting specific activities, such as installing advanced lighting controls, reducing energy consumption, agreeing to turn off equipment during peak periods in response to “demand response” signals, etc.

Beyond the obvious energy consumption and cost advantages of this type of project, business park owners may expect to benefit in less apparent ways. When the MBP project began, the property was 30 percent vacant; by completion, the vacancy rate declined to less than five percent. Tarlton ascribes at least some of the increase in tenancy to the property’s new “green appeal” and improved aesthetic. More important to building management is the building operating system software approach, which allows MBP management to use any Web-enabled device to view aggregate information on the overall property or drill down to a specific building or space. It can then make specific adjustments (e.g., modify light and/or temperature levels) in response to system alerts, tenant requests and the like. The system alerts will also indicate if someone tampers with thermostats or if a piece of equipment malfunctions.

In the end, SiteOn combined technology and financing programs into an integrated building management system with impressive financial results. Since the technology is proven and the financing generally available, this type of project is viable for a wide variety of business park owners seeking greater energy and operating efficiencies.