Why LEED Buildings Make Financial Sense

The University of Notre Dame chose sustainable, LEED-approved construction options and why you should, too.

 

Recently, the United States Green Building Council (USGBC) awarded the University of Notre Dame with LEED (Leadership in Energy and Environmental Design) Gold certification for the design, construction, and operation of three buildings attached to Notre Dame Stadium. These building are Duncan Student Center, Corbett Family Hall, and O’Neill Hall. Your next statement may be “So what?!” Why should the folks at Notre Dame care, and why should anyone else involved with owning, managing, and operating a commercial building care?

The answer? Money.

 

LEED Gold Certification seal from the U.S. Green Building Council

According to research from the U.S. Department of Energy, LEED buildings consume 25% less energy and 11% less water than non-LEED buildings. That translates to lower utility bills. If you could build the same facility but pay 11-25% less in operating costs, why would you choose otherwise? And this isn’t even taking into account all the environmental benefits of LEED buildings!

If the decision is made for the non-LEED option, then that is saying you know you could spend less operating this building, but you want to pay more. You know you could improve the income flow of your building, but you choose to make less. Why?

 

 

LEED Buildings: Financial Common Sense

Perhaps the concern is that a LEED building might cost more to construct than a non-LEED building. Depending on where you are building, there are notable tax benefits and incentives from states and municipalities (AKA free money). Choosing to build a non-LEED building is essentially saying you don’t want free money.

Finally, since a commercial building is an investment, the core factors of occupancy rates, lease payments, and long-term tenants are very important to cash flow. Citing the USGBC, LEED buildings retain higher property values than non-LEED buildings. LEED buildings are healthier for the occupants, and 79% of employees say they would choose a job in a LEED building over a non-LEED building. All of these point to greater demand (occupancy), longer term leases, and higher property appreciation. Money, money, money.

 

 

LEED Building infographic from U.S. Green Building Council
Source: USGBC

 

 

Intelli-Hood: A Solution for LEED Buildings

As I write this from Melink’s own LEED Platinum-certified headquarters, nicknamed HQ1, and across the street from our newly opened HQ2, which is a Zero-Energy Building, I am very happy for Notre Dame. I am also very PROUD that Melink’s Intelli-Hood® variable speed kitchen hood controls were a part of all the conservation measures that helped them achieve this certification. Within the three buildings that achieved LEED status, Intelli-Hood was installed on eight kitchen hoods. Intelli-Hood is now standard on any new hood installations, as well as retrofits, at Notre Dame.

Notre Dame opted for the sustainable, energy efficient, and financially smart option of LEED construction. What will you choose?

 

 

“We’ve Done Benchmarking. We’ve Done Lighting. What’s Next?!” Kitchen Ventilation.

The Benefits of DCKV

Kitchen ventilation, both exhaust and make up air, represent a significant opportunity for kWh and kBTU reductions in your facility. Demand Control Kitchen Ventilation, (DCKV) uses temperature and optic sensors to vary exhaust speed and make up air fans.  This is in response to precise cooking intensity underneath all kitchen hoods. With fans only running as needed, savings are gained on fan energy (controls produce 40-60% average fan speed versus 100% without controls). In addition, there are heating and cooling savings gained as a result of kitchens not evacuating all air that was just conditioned.

These controls can be installed in new construction projects. They’re usually specified by engineering firms in the design phase of your project, and should qualify for one LEED point. In addition, DCKV is a path to compliance for commercial buildings’ energy codes for states that have adopted ASHRAE 90.1 2010 and greater. You can see what your state’s requirements are here.

Retrofitting

Retrofitting the temperature and optic controls within existing kitchen exhaust hoods is equally effective at generating energy savings. It’s important to confirm that the controls are UL 710 and 2017 listed. This permits them to be installed in any manufacturer’s hood in any cooking application. There are many utility rebate incentive programs available for the installation of DCKV as well.

Kitchen Ventilation in Action

The financial impact for hospitals’ operating costs is significant when kitchen exhaust and makeup air fans no longer run at full speed 24/7.  A study by the EPA demonstrated that each dollar saved by a non-profit hospital, is the same as generating $20 in new revenues. Incidentally that same dollar saved in a for-profit facility is like increasing EPS by one penny.

Melink recently completed a Mid-West hospital project that produced $20,000 (per year) in combined savings. The savings included electrical, heating and cooling costs. Using EPA study metrics, this equivalates to $400,000 in new revenue for this facility.  Taking rebate incentives for our technology, the hospital’s ROI was less than one year.

The Purpose of DCKV

The goal of any DCKV project is to install controls that maximize the energy savings within the kitchen. In addition, DCKV will assist compliance with building energy codes, attain LEED points and make kitchens quieter and more comfortable. This article goes into greater detail and dives deeper into how these controls pay back initial investment. The articles recently appeared in the American Society for Healthcare Engineering publication, Inside ASHE.

Find the Inside ASHE article on kitchen ventilation here.

Buy Cheap, Buy Twice

I’ve
been in my role, with Melink Corporation, as a Sales Engineer just over 1.5
years.  I want to ensure it’s understood
that I am certainly no expert in the “Construction World” but I do have
tangible experience.  This article’s
content is based on my first-hand experiences, real-world applications I’ve
dealt with and conversations I’ve had.
Thus, these opinions are largely subject to my own with some additional
input from outside articles and research.

 

My first week into this role was a mix of emotion, to say the last.  It was during this week that my manager (whom I see as an industry expert and mentor) expressed to me [something along the lines of], “Eric, you’re dealing with one of the toughest verticals Melink works within [New Construction].  I’ll be honest with you – you’re going to learn so much but you’re really going to have to learn to love frustration.”   Yes, you [reader] likely share my same sentiment – skepticism, surprise and curiosity; though, it didn’t take long to understand what he meant.  I was “christened” nearly the very first project I dealt with.  Long story short, despite our product being hard specified by the hired designing Mechanical Engineer, our product was ultimately “value engineered*” for a cheaper alternative.  Echoing my feelings earlier, I was surprised, curious and frustrated.  I became aware of the “Achilles heel” of the New Construction world – the bidding process (which is influenced by cost).  Cost is, and always has been, the deciding factor in mostly all aspects of a new build project.  It makes sense, until you dig deeper.

Everyone
is guilty.  Even the product
manufacturers should hold themselves accountable in this regard; they/we are
just trying to play the ‘game’ and stay in business.  In his article, “People Are Cost-Driven with
Kitchen Equipment but There’s an Adage of Buy Cheap, Buy Twice”, Andrew Seymour
interviewed a chef by the name of Hayden Groves.  Mr. Groves is quoted as saying some buyers
are too “Excel spreadsheet-driven” and end up trying to shave off costs when it
might not be the right move for the business.
First hand, I’ve seen this happen, as explained earlier.  Our controls can often be eliminated for a cheaper
alternative that cannot do the same thing, thus cannot produce the same results
as our technology.  This decision is
often made without any discussion or pragmatic decision process.  Who makes this decision?  Ultimately, it should be the owner or
whomever holds the checkbook and it often is; in this case, I understand.  The owner can do what he/she wants to
do.  Unfortunately, often it’s a ‘bidder’
who is trying to win the project by competing solely on cost.  Again, I want to reiterate that this doesn’t
happen every time, but it does happen way more than it should.  Yes, I am saying that if a trusted designer
hypothetically specifies a Rolls-Royces then you’ll likely see most bidders
price out a Toyota Camry (Toyota’s are great vehicles – I own one!).  Yes, they both have engines and four wheels,
but they are uniquely different and have glaringly different features,
components and thus, different values.
Without going down this rabbit hole, I’ll just say it’s the principle of
the matter…that matters.   Attending an
industry conference this past week, I had the chance to sit down with
consultants and manufacturers.  This
exact discussion was brought to the table as a point of frustration for the
consultants.  They share my frustration!  This is a broken process and research support
this argument.  Consulting-Specifying
Engineers recent publication (www.csemag.com), provided the top
10 HVAC systems and BAS challenges.  The
top challenge, comprising 79% of respondents, is the inadequate budget for a
good design. Conversely, this same research shows that 96% of specifying
engineers can agree that product quality is paramount when comparing products,
above all else; these are the engineers that are hired for their expertise to
ultimately design and specify products to accompany the design, to meet an
owner’s and/or architects’ goals.  Yet,
here we are.  A battle between the desire
to specify based on quality but ultimately being sold on what is cheapest.

So,
how does a whole industry change?
Perhaps by “eating the elephant, one bite at a time” as they say.  One often overlooked and unquestioned factor
is that of aftermarket and post install support.  It’s imperative that we all make sure to
mention our product’s warranties and service/support on the front end of the
process, as the lack of either could potentially be a major headache on the
backend.  If I never mentioned Melink’s
warranties/service in my discussions, they would never get asked about; this is
shocking.  A 2016 McKinsey study proves
that service and support reign most important in terms of purchasing factors

 

2016 McKinsey Study – “How to Unlock Growth in the Largest Account.” 

Hayden
Groves, also harps on warranties/support.
He said, “You should look for manufacturers’ warranty too. If a
manufacturer gives you a minimum standard of a year but somebody else gives you
five years, that’s a huge belief in that piece of equipment”, says
Hayden.  Speaking of Rolls Royce…

“The quality is remembered long
after the price is forgotten.”
– Sir Henry Royce of Rolls Royce

*Value
Engineering = “Cost Cutting”

CITATIONS

 

  1. Pelliccione, Amanda. “2019 HVAC &
    Building Automation Systems Study.” Www.csemag.com , Equal Opportunity Publications, Inc,
    16 Jan. 2019, bt.e-ditionsbyfry.com/publication/?i=559857.