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Defining affordability – an exercise in semantics?

With market demand for affordable housing projects reportedly on the rise, there is a perceived need for reasonably priced cooling solutions. But what exactly makes an HVAC system affordable? Is equipment selection a simple matter of looking at the initial cost, or should other considerations, like OPEX and energy efficiency be factored in?

| | May 17, 2016 | 9:51 am
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House sketches_SS

Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman made headlines across the globe when he unveiled, on April 25, details of the Kingdom’s Vision 2030, which identifies economic reforms aimed at reducing dependence on oil, diversifying economic revenues and cutting energy subsidies. Described as an “ambitious but achievable blueprint” for the future, the vision – it must be noted – also highlights the Kingdom’s plan to attend to its growing housing market and increase the number of Saudi homeowners, by “introducing a number of laws and regulations; encouraging the private sector to build houses; and providing funding, mortgage solutions and ownership schemes” that will meet the needs of its citizens.1

We need to redefine ‘affordable’ to mean ‘optimised’ cooling solution

Saudi Arabia is not the only country in the GCC region that is taking a closer look at its housing segment. In the first quarter of this year, different media outlets in the UAE reported that in response to growing market demand, industry interest in affordable housing is increasing. The National, for instance, in a February report quoted Land Sterling’s Abdul Basset Betraoui, who made the observation that affordable housing has “kicked off” in the past year and a half.2

Putting things in context

Kartik Raval, Territory Manager for Air Conditioning Equipment at Leminar Air Conditioning

Sharing Betraoui’s observation, Kartik Raval, Territory Manager for Air Conditioning Equipment at Leminar Air Conditioning, says that the affordable housing sector is “definitely on the up” and, as proof, points to the various housing initiatives that have been – and are being – launched under the Sheikh Zayed Housing Programme and the Sheikh Mohammed Bin Rashid Housing Establishment umbrellas. He is quick to note, however, that the term “affordable” has to be viewed in a regional context. “When we talk of affordable,” he says, “it should always be in regional terms, because some countries’ concept of affordable might be other countries’ idea of luxury.”

His statement echoes the sentiment expressed by Anwaar Al Shimmari, Director of Design at the UAE Ministry of Infrastructure Development and Board Member of the Sheikh Zayed Housing Programme, during the 4th Annual Middle East VRF Conference held in March, organised by CPI Industry. While speaking at the event, Al Shimmari stressed that “affordable” not be used to describe the country’s housing projects, explaining that if people were to look at, for example, the programmes of UN-Habitat, they would realise that what the UAE provides is luxury and not affordability.

Much ado about a word

It is not only when used in relation to housing projects that the modifier elicits a cautious response. HVAC industry stakeholders are of the view that the word needs to be clarified when used to refer to cooling solutions, even if the discussion is on how the industry can meet the cooling requirements of the affordable housing segment.

Azmi Aboul-Hoda, Managing Director of EMergy

Azmi Aboul-Hoda, Managing Director of EMergy

“Affordable is a very general term,” says Azmi Aboul-Hoda, Managing Director of EMergy. “Many factors should be taken into consideration. Are we talking about affordable in terms of space? How about in terms of initial cost, running cost, maintenance and application?”

He adds that even if a piece of equipment is sold at a cheap price, it is not necessarily affordable, for it could prove expensive down the line, when maintenance and operating costs are calculated. It is for this reason, he reveals, that when clients opt for cooling systems with the lowest initial cost – often split units – his first response is always to try and persuade them to choose better quality products.

Scott Coombes

Scott Coombes, Director of AESG

Offering a slightly different take on the matter, Scott Coombes, Director of AESG, is of the opinion that the meaning of affordability changes as the focus shifts from one party to another. “It really depends on who you’re focusing,” he says. “Affordable for a developer is very different from affordable for a tenant. For a developer, an affordable cooling system is one that has low CAPEX, but what’s cheap to a tenant is a system with low utility and running costs, or low utility OPEX. What’s going to be cheap to an owner or an operator is a system that has low maintenance cost, especially if he has tenants for a residential building. Tenants will shoulder the utility cost but not the maintenance cost. So an operator is going to be looking at low maintenance OPEX.”

Coombes points out that the situation is not always that simple, as other elements could come into play. “For example, while a developer may look for low CAPEX, he may also know that his property will have better resale value if it has a more efficient cooling system.”

Redefining affordability

To help settle the conundrum of what makes a solution affordable, Moutaz Abdalla proposes redefining the word altogether. “We need to redefine ‘affordable’ to mean ‘optimised’ cooling solution,” he says. “I don’t think ‘affordable’ as most people understand it would represent the best word when it comes to cooling solutions.”

Abdalla, who is the Division Manager for Energy Efficiency at AESG, illustrates his comment by drawing a comparison between variable speed chillers and constant speed chillers. “A variable speed chiller is more expensive in terms of initial cost, but its running cost is way less. And that initial cost can be recovered over time – on average of three years, maximum four years, and we’re talking about a full system that will last for 15 to 20 years.”

Naming VRF technology as another example, he continues, “I’m sure you’ve heard of The Sustainable City. All their villas have VRF systems, which are slightly more expensive than the traditional split unit systems in terms of initial cost, but they are more efficient, and that makes a huge difference.”

To support his statement, he references a study commissioned by RSB Dubai on the market share and efficiency of different cooling solutions, which his company and other consultancy firms worked on. According to the results of the study, VRF technology appears to offer “significantly better efficiency than ducted, split or window AC”.3

Moutaz Abdalla, Division Manager for Energy Efficiency at AESG

Emphasising the need for a change in mindset, Abdalla recommends that people refrain from focusing on what’s cheap and, instead, look at energy efficiency and the long-term costs involved. “If we’re going to assess affordability, then it must be linked to ROI, reliability, ease of installation and maintenance and environmental impact. We should not dwell on the affordability of a cooling system now but on the affordability of that system’s lifecycle cost,” he says.

Getting a different perspective

Raval, too, believes that a change in people’s thinking is required, after having noticed that system-selection decisions tend to be dictated by the developer’s or property owner’s plans for the building. He shares his view that clients who will be involved in the operation of the property, typically show more interest in the lifecycle cost of a system, adding, “But if the building is going to be sold off, clients rarely consider other factors outside of CAPEX.”

He also agrees that discussions on affordable cooling solutions should take into account all costs involved. He, however, thinks products that have low initial cost should not be automatically dismissed as being inefficient or of having inferior quality. “There are a lot of systems available in the market for housing projects,” he says. “Some of them are high-end and high-spec, but there are products that are economically priced, and yet still offer value for money. One-to-one systems, for example, while relatively cheap, are not only easy to install and commission but also simple to operate and maintain.”

There are highly efficient one-to-one systems available… If you compared the efficiency of those systems with that of VRF, you’ll see that there’s barely any difference in performance

The same cannot be said for VRF systems, he points out. “First of all, price is an issue, because VRF is more expensive. Second, compared to existing one-to-one solutions, which have been used over decades in this country, VRF is quite new. Its maintenance is costlier. Talking about installation, not every contractor working today is geared up to do a VRF installation. And the commissioning of VRF systems require laptops and certain software, which is not the case for one-to-one. Any technician in town can install a one-to-one split unit, and they don’t need software or a laptop to do commissioning.”

With regard to energy efficiency, he claims that comparisons between VRFs and one-to-one systems are not always done in a fair manner. He elaborates: “When people do a comparison, they normally compare the least efficient one-to-one system in the market with a VRF [system]. Why is that when there are highly efficient one-to-one systems available? If you compared the efficiency of those systems with that of VRF, you’ll see that there’s barely any difference in performance.”

Comparison errors

Industry players making flawed comparisons, Aboul-Hoda reveals, is among the biggest challenges in the HVAC sector, and one that has resulted in erroneous purchase decisions. “In chilled water systems, for instance, the choice of control valves significantly affects the performance of the equipment,” he says. “They work within a certain range of pressure, and when the pressure goes beyond that range, the valves become ineffective. This can be avoided through the use of either Pressure Independent Control Valves (PICVs) or differential pressure controllers.”

The problem, he declares, is that many designers continue to design systems with 2-way and 3-way valves, technologies that are at least 30 and 40 years old, respectively. “PICVs and differential pressure controllers, on the other hand, are around 10-15 years old, but designers seldom use them,” he observes, saying that the reason often given is the price difference – an argument that he thinks is invalid.

House sketches 2__SS

“There’s no big difference when it comes to costs,” he says. “Sure, a PICV is more expensive than a 2-way [valve]. But when you install a 2-way valve, you also need a Double Regulating Valve (DRV), something that you don’t need with a PICV. So you are actually getting the  more efficient PICV for the price of a 2-way [valve] and a DRV. And yet, there are engineers who tell their clients that PICVs are more expensive, without thinking about the added cost of the DRV.”

Citing comparisons between the initial cost of VRF systems and that of chilled-water systems or packaged units as another case in point, Aboul-Hoda notes that CAPEX discussions tend to not include the costs of component parts or accessories. “VRF is on the expensive side, that’s true; but a VRF system comes with several components from the first shot,” he says.

“Suppliers will give you a quotation for the whole system, including the components. With the others, you get a separate quotation for the equipment itself and another for – in the case of chilled water – the pumps and valves.”

Despite making that observation, Aboul- Hoda stresses that he is not prescribing VRF systems as the sole answer to the cooling needs of the affordable housing segment, since cooling requirements vary from one project to another.

“For huge villa projects that have, for instance, a 5,000-square-metre built-up area, I would personally go for chilled water, as it offers better control and better indoor air comfort,” he says. “But if we’re talking about a 400-square-metre villa, justifying the choice of chilled water over VRF will be difficult.”

An oversized problem

Another example of a costly miscalculation that industry players make is oversizing, says Aboul- Hoda, who claims that it’s a problem he has discovered while conducting energy audits. “All of the buildings I’ve audited suffer from oversizing,” he says. “One residential building here in Dubai, for instance, had four chillers, even though it only required one, or two at most, with one as standby. We know this, because when we checked the operating hours of the chillers, one was operated around 8,700 hours per year, while the other three each clocked in only 15 hours per year.”

Attributing the problem to the practice of “rounding up”, he explains: “Engineers in the design chain tend to ‘round up’ measurements. For example, while designing the cooling load of a building, one person measures the envelope by measuring the wall, and it is 1.2 metres, but he rounds it up to 1.5 metres. Then you have another guy in the chain measuring the area and height of the external walls, and he rounds up both figures. Those additions build-up, and then at the end of the day, standards tell us that we are allowed to keep 10 to 15% safety factor.”

The safety factor, he adds, is something that many designers take advantage of, because they think that oversized is better than undersized. “So they add the safety factor, and they come up with a figure like 2.3 TR. They take that figure to a manufacturer, who tells them that the first unit above 2.3 is 2.5. Again we are adding 10-15%. All that rounding up is why oversizing is such a big problem not only in the UAE and the Middle East but also in other parts of the world. And needless to say, oversized systems are not exactly affordable.”

Rating building performance

To address the problem of oversizing, Aboul-Hoda believes that authorities ought to look at introducing an assessment scheme for the overall energy performance of buildings.

It’s an idea that Coombes also brings up, saying: “It’s an important step that the government needs to make towards certifying existing or new buildings in terms of their energy efficiency. If you have some sort of energy performance certificate for a new build or a building to go on lease, the actual performance of the cooling system becomes very important. Developers, then, would start taking OPEX into consideration, instead of driving directly towards the cheapest CAPEX.”

There are engineers who tell their clients that PICVs are more expensive, without thinking about the added cost of  the DRV

Expressing optimism that the market will respond well to an energy performance certificate for a building or residential unit, Coombes adds: “I think that’s something that will definitely, in the future, affect developers who, being very cost-conscious, have used low-quality systems, because it will show in their energy performance. And as soon as tenants start to gain more information on how buildings actually perform, developers and operators and property owners will start to make more sensible decisions.”

Design matters

While he believes that it is imperative that clients be encouraged, through standards and regulations, to make informed choices when it comes to what qualifies as an “affordable” cooling solution, Coombes states that consultants and other industry players should also do their part to help clients maximise their investment.

“We specialise in introducing ecological footprint in the built environment,” says Coombes, “Hence, from our point of view, it is paramount to introduce energy-efficient products very early in the design stage. In our experience, whenever we are able to introduce them early enough, we do find that clients are able to cut costs in other elements of the building, like envelope or glazing or even mechanical equipment.”

Adding to Coombes’ statement, Abdalla applies his preference for the term “optimised” to building design, saying: “If there’s one area that we’ve been able to help a lot of clients with, it is in reducing the size of the cooling system required by optimising the architectural design of the building. And we do this by using passive cooling techniques that help reduce the cooling load, which, in turn, reduce the cost for the client.”

Expert -speak

Prashanth BS, General Manager of the Air Conditioning Business Group at Eros Group, identifies different measures that he says can be implemented easily during the design and construction stages of buildings. The following measures, he claims, can help cut cooling-related costs…

Insulating surfaces

Prashanth BS, General Manager of the Air Conditioning Business Group at Eros Group

Prashanth BS, General Manager of the Air Conditioning Business Group at Eros Group

To keep heat from entering the home, use thermal insulation with superior K value, thermal conductivity, water vapour permeance and permeability for hot surfaces, like walls, roofs and attic floors; and cold surfaces, like ducts and pipes. Fire and smoke ratings of the material selected should meet or exceed local fire and safety codes and properties.

Physically cross-linked foam insulation materials like polyolefin-based insulation, with at least 0.032 W/mk thermal conductivity, are easy and quick to install. The cost can be recouped quickly in the form of low energy bills throughout the year.

Double glazing glass windows with lower U-value (thermal transmittance)

Windows that are constructed with an air gap between two glass panes, with a reflective outside glass equipped with high U-value, will help not only by blocking the heat but also by reflecting it, thereby allowing only sufficient light inside to keep the spaces lit. By selecting and installing double glazing instead of single glazing, the amount of energy lost can be reduced by up to 75%, and cooling bills lowered by up to 20% each year.

Heat loss is normally measured by the thermal transmittance or U-value, usually expressed in W/m²K. In its most basic terms, the lower the U-value, the greater the thermal insulation; however, the amount of solar gains or g-value can also have a big impact.

Window Energy Ratings or WERs, which take account of solar gains, provide good indicators of how energy-efficient windows for homes can be. The Window Energy Ratings Scheme is based on a scale of A+ to G, with A+ rated windows being the most energy-efficient.

Applying reflective barriers

Dark-coloured home exteriors absorb 70% to 90% of the radiant energy from the sun that strikes the home’s surfaces. Some of this absorbed energy is transferred inside by way of conduction, resulting in heat gain. In contrast, light-coloured surfaces effectively reflect most of the heat away from your home. Another way to reflect incoming heat is to install radiant barriers on surfaces.

Utilising shading

This is the simplest, most effective way to cool spaces and reduce energy consumption. Up to 40% of the costs of cooling can be saved by utilising shading techniques, such as overhangs, landscaping and working the drapes and blinds. Drapes and curtains made of light-coloured fabrics reflect much of the sun’s rays and help reduce heat gain. The tighter the curtain is to the wall, the better it will reduce heat gain. Two-layered drapes are most effective for summer cooling. Blinds, although not as effective as drapes, can be adjusted to let in some light, while reflecting the bulk of the sun’s heat. The more reflective side of the blinds should face outward.

Reducing heat sources

Heat generated within the house can contribute significantly to the costs of cooling. Switch to energy-efficient LED bulbs, because only five per cent of the energy that goes into a typical incandescent bulb comes out as light. The remaining 95% comes out as heat. Though they are initially more expensive, they are actually more affordable than incandescent bulbs in the long run, because they use less energy and last much longer.

Fresh-air cooling contributes the highest to the cooling load. Therefore, reducing the amount of fresh air to be cooled, coupled with the use of ventilation recovery systems and demand ventilation, will help.

Sealing and insulating ducts and pipes

Many spaces with central cooling have ducts that run through the attic and plenum space. If the seams in these ducts are leaky, especially in the attic or plenum, they lose cooled air into the house, creating additional load for the system.

Ducts and pipes that have very cold surfaces in unconditioned spaces should be sealed and insulated by qualified professionals using appropriate sealing materials. Don’t place thermostats in areas directly hit by sunlight.

Select high-efficiency cooling solutions

Technologies like inverter compressors, variable speed pump systems, programmable thermostats, demand ventilation and energy recovery systems can all add up to bring in high-efficiency cooling solutions. Though they are initially more expensive, they are actually less costly in the longer run, because they use less energy and last much longer. Investment costs will be recouped quickly, since you’ll be paying lower energy bills throughout the year.

Smart solutions for small homes or apartments can add value, while controlling and monitoring energy bills being paid to run cooling systems. For larger buildings, minimum-level BMS is a must to control and monitor the system, in addition to raising alarms and fault handling.


References:

  1. http://saudigazette.com.sa/saudi-arabia/full-text-saudiarabias-vision-2030/
  2. http://www.thenational.ae/business/property/affordable-dubaihomes-will-keep-residents-in-uae-for-longer-says-expert
  3. http://www.rsbdubai.gov.ae/dubai-cooling-study/

(The writer is the Assistant Editor of Climate Control Middle East.)


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