This article is sponsored by Mitsubishi Electric Trane HVAC U.S., or METUS. This interview took place during a live Q&A session with Randall Towb, Senior Manager, Business Development, Senior Living of METUS, at the SHN BUILD event in Chicago held on November 18, 2021. The interview has been edited for length and clarity.
Senior Housing News: What does HVAC stand for and how does it fit into the goals that senior living operators have over the next year?
Randall Towb: HVAC is definitely not the sexiest part of the building, but it’s critical, for sure. It has to do with heating, cooling and ventilation, which seems very simplistic, but there are a lot of moving parts. We all have it in our homes or businesses. The ventilation piece is bringing outside air into commercial buildings. Our job is to treat it, filter it, and control the system as a whole.
We focus on not only the thermostat that’s on the wall for the senior living resident, but the centralized system that serves the entire facility. If a maintenance director is offsite on the weekend and they can use their phone to fix a problem, that translates to huge savings. HVAC entails all of that.
From an energy standpoint, it’s about 40% of the energy used in a building. In senior living, it can be higher than that, especially for a community in colder climates, because we all know seniors want that room warm.
In an all-electric building, which most new senior living buildings are, HVAC can account for as much as 60% of the energy bill when there is a cold snap in the area. Traditional electric heat kits use a ton of energy. The type of technology that we’ll talk about today, which is Variable Refrigerant Flow (VRF), is a high-performance heat pump. It’s about 3 to 4 times the amount of heat for the same energy input as traditional electric heat.
“Variable,” is the key word. The heart of the HVAC and the VRF system is the inverter compressor. It’s a lot like the cruise control on your car. A building is not always using 100% of the heating or cooling capacity of the equipment. The sun rises in the east and moves west and thermal loads shift throughout the day. Even a room with more occupants might create more heat at different times of day, depending on when people congregate in those rooms, such as the dining or community areas of the senior living community.
Additionally, you have different equipment such as: coffee makers, dishwashers, laundry rooms and TVs, all of which create heat and cause that load in the building to shift over time. Variable Refrigerant Flow (VRF) uses refrigerant to heat and cool a specific zone in that building by matching the exact same amount of energy needed for the space or room.
One of the really cool things about VRF technology is the heat recovery aspect of it. It takes advantage of free, naturally created heat from the thermal load and moves it to other parts of the building that might be shaded or set to a lower temperature. The refrigerant turns that free heat into a superheated hot gas, delivers it to the cold zones, then changes state to a subcooled liquid and provides free cooling in other zones.
SHN: What are the exciting numbers around ROI? What should people be looking out for? What should they be thinking about in terms of why this HVAC system matters?
Towb: The ROI is one thing, but the total cost of ownership is perhaps more important. A typical senior living facility is roughly 130,000 square feet with about 150 resident units and common areas. The typical savings over the 20-year life of the equipment is $2 million to $3 million for a senior living community by using VRF versus traditional split systems with electric heat. In some cases, it could be more.
Sometimes the ROI starts on day one. Ventana by Buckner won the 2009 Senior Living News Architectural Award for CCRC. Siobhan Farvadin from HKS and her team designed that building. She was on a podcast a couple of years ago and talked about how from the very beginning, VRF was a lower cost than the four-pipe hot water and chilled water system. Then, we had a retrofit job with Atria Merrimack Place near Boston. They did a new building with VRF and had an existing building with a two-pipe chiller boiler system. VRF saved them a million dollars versus just replacing all the old equipment.
Sometimes the ROI can be on day one, sometimes it can take three to four years. Over the 20-year life of the equipment, we usually see several million dollars in savings for the owner—savings that go directly to their net operating income. Also, in ROI, one of the things that I like to talk about with VRF is that it is a more energy-efficient technology, and there’s a lot to that.
A lot of the utilities will offer significant rebates because it is such energy-efficient technology. Some of them don’t offer any. It’s dependent on the specific utility, but we’ve seen upwards of $115,000 rebates for that same 130,000 square foot facility. They’re all usually very easy to apply for.
From the very beginning, many small developers don’t know there are federal tax credits as well. The 179D federal program and the 45L federal program came into existence in roughly 2003. 45L is for anything that’s three stories and below like senior living, for-profit senior living qualifies. 179D is for anything that’s 4 stories and up.
We’re seeing $2,000 per resident unit in a tax credit. We just helped a developer in the Houston market pre-qualify for a $312,000 45L federal tax credit because they’re using VRF in their community.
SHN: What is the top benefit for residents? Where do residents start to notice the ROI?
Towb: It has a lot to do with comfort. Comfort is a part of wellness as is indoor air quality. For example, a packaged terminal air conditioner, PTAC, is very common in mid-level hotels and many senior living communities. PTACs are loud and they start and stop all throughout the night, and the temperature rises and falls constantly. The sudden starting and stopping noise of the PTAC compressor and fan, plus the temperature swings negatively impact a senior’s sleep quality. Furthermore, PTACs don’t do a very good job of removing moisture from the air, so humidity is much higher. All those things affect indoor air quality, and they affect the health of the resident and staff.
Having a good HVAC system and ventilation system enables the operation team to control ventilation air and the humidity levels automatically, which improves resident and staff comfort and does a very good job of filtering the air. An important aspect of VRF systems is that the fan and the compressor vary their speeds and capacity to match what the room requires to keep a consistent temperature.
For resident rooms, the VRF indoor air handler has a supply air and return air section which are self-contained. As it runs throughout the day, you get more air passes through the filter. If you add advanced filtration strategies such as UV lighting or needlepoint bi-polar ionization, it is even more effective.
The VRF air handlers and outside condensers operate with much lower noise levels compared to traditional “on / off” HVAC systems. Noise levels inside and outside the senior living community impact the wellness levels for the residents.
SHN: Do sales teams use this as part of their conversations with prospects?
Tomb: They should. I wish we would see it happening more, even if the building does not get an official LEED/Green or Wellness certification. If the building has high efficiency HVAC equipment such as VRF, the sales and marketing staff should educate the prospective resident and their family on why the community is designed with it. I think the executive team, the chief technology officers or the chief impact officers could benefit their organizations as well by arming their staff with this knowledge of comfort, indoor air quality and reduced energy consumption.
I believe prospective residents and their families would be proud that the community’s design is helping the future generation. It is important for us all to realize when our investments are helping to reduce the carbon footprint and improve the environment.
SHN: what are three key points for operators to know about VRF and warranty, about maintenance and service contractors?
Towb: I’m speaking from the METUS standpoint, but I think a lot of owners, development teams and operators fail to realize that we, the manufacturer, like to know where our equipment is installed, especially in a community the size of a senior living community. We have sales teams, and service teams all around the country, and even if we’re not selling services for-fee basis, we still have to get involved in warranty issues.
The more we know about that community, the better we can serve our clients. Who did the installation, who designed it, who’s the service contractor, or does the service team need us to recommend a service contractor that knows our type of equipment? It keeps escalating.
With labor shortages, the cost of mistakes made during installation are significant. Maybe you don’t get leased up all in year one, and it takes you 18 months to get to 80% occupancy. Your HVAC system isn’t running throughout the building, so typically, you don’t start to see issues until after the one-year labor warranty is past.
As the manufacturer, we would like to know the design team and we want to know who the owner and the operator are. We provide services that are either free or very reasonable. All of the VRF manufacturers offer an extended warranty that’s free, and all it requires is that the installing contractor documents a few key pieces of information, which are always provided to the GC.
There’s a takeaway from that, reach out to us, we want to know that our equipment is going in your building. We want to have that relationship because it’s beneficial for us as well.
Editor’s note: This interview has been edited for length and clarity.
This article is sponsored by Mitsubishi Electric TRANE HVAC U.S. (METUS), whose mission is to provide personal comfort to customers and create prosperous communities where they live and work. To find out how visit https://www.metahvac.com/
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