Controlling Your Building’s Heating Expenses

Dealing with snow removal, black ice, and the biting cold of winter is tough. Getting a whopping heating bill at the end of a winter month can feel like insult added to injury.

This article outlines a few easy ways to control heating costs giving property managers some nice wins for cold weather board meetings.

Calibrate Your Thermostats

Most people set their thermostats to a temperature number they have always set it at, regardless of how the room actually feels. A thermostat that heats a space to 75 degrees when the user is expecting 73 can cost your community thousands of dollars over a winter.

Refer to your heating systems manual to set it for calibration. Then, get good quality thermometer and go to each terminal in your building. Adjust the thermostat’s baseline temperature to that of the thermometer.

Then, put up signs offering to lend your thermometer’s to residents to let them do the same for their units.

Insulate your Hot Water Tank

While it is a heavy lift to re-insulate a building, insulating a building’s central hot water tank can be done in a day and have a 1 to 2 year return on investment from reduced utility expenses.

This make an especially big difference with older or electric hot water systems. Please take note of the following:

Use only non-flammable materials like fiberglass or rock-wool.

For gas heaters, only insulate the sides of the tank, leaving the top and bottom exposed for ventilation purposes. Do not cover any vents as this poses a carbon monoxide hazard.

Thicker insulation will result in a longer payback period, but will save more money in the long run. Consider 6” of insulation the minimum, 18” the maximum. It’s also fine to gradually layer it over time to match budget priorities.

Consider also insulating exposed hot water pipes.

For additional savings, you can install a solar hot water heater on your roof. Note that this differs from a more common solar electric or photovoltaic (PV) system, which convert light into electricity.

Solar hot water systems system collect heat from the sun hitting your roof, then pump hot fluid down to a heat exchange tank, heating the potable water in your building. These systems vary depending on size, but typically run $40k to $200k.

Most states and many localities have generous subsidies to mitigate the cost by as much as 50% or more. Be conservative in sizing your system- bigger is not better with this technology as larger systems require a disproportionate amount of maintenance and expertise.

Solar hot water companies may encourage you to size a system to cover more than 75% of your hot water load, but % will still have a significant impact on your budget and keep maintenance costs low.

Lock in Your Natural Gas Supply Rate

While the utility will always be responsible for delivering natural gas, many states allow you to choose the company that supplies your natural gas. These competitive suppliers offer you fixed or variable rate plans, typically lasting for 1 to 3 years.

In early 2016, natural gas prices hit 17 year lows on the national market (see below), so experts are advising managers to lock in for longer terms to avoid price hikes. Many property managers turn to energy brokers to help them find the best price across many different suppliers, complete the paperwork, and help explain the process to their Boards.

If you have any questions about these items, or anything else pertaining to saving money on your building’s utilities, please reach out to Andrew Zimdahl, az@honeydewadvisors.com or contact us below with your questions.