ICAST founder and president Ravi Malhotra discusses decarbonization at multifamily affordable projects in New York and Utah

ICAST MarketingICAST News, Blog, Industry News Leave a Comment

Case Study: Getting Ahead of the Decarbonization Curve 

By  / Issue: June 2022

Projects in New York and Salt Lake City Save Tons on Carbon Annually

Decarbonization, changing from fossil fuels to electric, is a word affordable multifamily asset managers are going to need to learn in a hurry, if they don’t know it already.

And that’s true even if the electricity is currently being generated by coal because that is going to change, according to one advocate of decarbonizing.

Ravi Malhotra, founder and president of Denver-based ICAST (International Center for Appropriate & Sustainable Technologies) says the concept makes sense for both new construction and retrofits of existing buildings, though it is much easier to achieve on new construction.

“We come at it from the green side,” he says of nonprofit ICAST. “How do you make those properties greener, more efficient, healthier?”

“Green packages” include energy efficiency, the use of renewable energy, water conservation and health and safety improvements. Much of electricity now is generated by renewable sources, like solar and water, though a substantial legacy of coal powered electricity remains, he points out.

Malhotra says his firm specializes in doing green packages “in a turnkey manner from onsite assessment to customized engineering because each multifamily property is different. It’s not like there’s a cookie cutter solution. Each property has a different status quo and needs. There are so many variations, not only in terms of low-rise, high-rise, midrise, brick, stone, concrete floors, stick frame, as well as what kind of systems they have, central boiler, individual units, etc. Plus, there are variations on utility bill rate structures, residential rates, commercial rates, demand charge and time-of-use rates, so the variations and nuances are many.

“Each property gets its own solution that is appropriate to that property.”

The concept of net zero buildings, where energy use is netted out by efficiencies, is a part of the story but not all of it. “Net zero ready, microgrids, beneficial electrification, decarbonization, there’s a lot of ideas being bandied about,” he says.

“The technical capabilities can be done, to get to net zero. We always question the financial viability of that approach. It can be expensive.”

It’s Actually Cheaper

With decarbonization, “its actually cheaper than going with business as usual. Our advice to our multifamily affordable clients is, you do what makes sense.” His multifamily affordable housing clients include “developers and owners, property management companies and asset management groups.”

The underlying assumption in decarbonization is that the electric grid will eventually get much cleaner than it is now. In some places it’s already much cleaner. In other areas of the country, over 50 percent of electricity comes from coal. But the assumption is a lot of coal plants are being retired in preparation for a cleaner grid, says Malhotra.

“If you are in the Northwest, the vast majority of their energy comes from hydro. In the Southwest, there’s a lot of wind and solar. The percentage keeps growing. A lot of states have put in a requirement that their grids have to be carbon neutral by 2050. And by 2040, many states have goals to get to 80 percent.”

On decarbonization, “If you are doing new construction, we have some developer clients that swear up and down a well-designed all electric high-performance building can actually be cheaper than business as usual,” says Malhotra. “In new construction, decarbonization is easy, and actually a money saver. Everybody should be doing it.”

But there is an 800-pound gorilla in the room asset managers and others need to be thinking about: retrofits. “We have a lot of existing stock that needs retrofitting. And that’s where the crunch lies, because that’s not easy to do. And there’s not even close to a one-size fits all” he says.

“If you have a high rise, putting in individual heat pump units is financially not viable yet. Versus if you have a low-rise building, two or three stories, it’s much easier to make the shift,” says Malhotra.

“On electrification, there’s various options, like air source heat pumps and water source heat pumps. That one requires some source of water, so you have to be next to a lake, stream or river. Not very many multifamily properties are, so not many are viable.

Ground source heat pumps are expensive “unless you can do it on a large scale, which with affordable housing you cannot,” Malhotra says. “So, you’re left with air source heat pumps as your most viable option, which we do by the thousands now.

“I think we facilitated 6,000 heat pump installations last year,” he says.

Three Big Challenges

In the decarbonization of buildings, there are three big things that need to be done. “Typically, you have gas space heating, hot water and cooking. Those are the three systems that must be shifted from gas or oil or propane to electricity. And a heat pump is the technology that allows you to make that shift,” says Malhotra.

Malhotra gave a couple of examples of projects ICAST has done. In Troy, NY it did an existing project of low-rise six-unit buildings with the New York State Energy Research and Development Authority (NYSERDA) for the local housing authority that proved not to have the usual complexities existing properties have.

Notes Malhotra: “It was a gut rehab for a tax credit deal. It falls into my category of the easy ones. It was a gut rehab down to the studs.”

So, the Troy net zero project, though an existing one, was much like new construction, he says.

“You don’t need any of the gas infrastructure: no gas meters, no piping in gas for the furnace, hot water heater or stove. Now you have a heat pump that can do both heating and cooling and provide hot water.”

In Salt Lake City, at a 75-unit high-rise project called Stansbury Condos, “we moved them from from central boiler and chiller to unitary systems,” gaining a lot of energy efficiency.

“With a typical boiler you’re lucky if they are running at about 70 percent efficiency. In other words, 70 percent of the gas is converted to heat. You lose 30 percent in that transition.”

But with the cold-climate air source pumps installed at Stansbury Condos, the property gains over 250 percent efficiency.

“That’s the beauty of these heat pumps,” he says.

More Than One Benefit

Decarbonization has two benefits for asset managers and others involved in the process, Malhotra says. “You’re doing away with gas, but you’re also reducing the energy you need. The equipment is cheaper, efficiency is better, operating cost is lower.”

How pervasive is decarbonization now?

“In the new construction world, it’s ten or 20 percent pervasive in some areas and it’s growing fast,” says Malhotra. “Two years ago, it was maybe five percent. Eventually, it will be all buildings, especially with a new combo heat pump that is being developed now that does heating, cooling and hot water from one piece of equipment.”

The current hurdle is education, he says. “It takes about 30 minutes to convince the developer. It takes us two months to convince the architect and the engineer.”

Malhotra, founder of ICAST, has two engineering degrees, a MBA and has worked in the sustainability space most of his life, starting the firm 20 years ago.

He has 85 employees now but in a growing field he foresees having many more.

“I can’t find people,” he says. “I have 20 openings now. Our growth is limited only by our ability to hire.”

Leave a Reply

Your email address will not be published. Required fields are marked *