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Are inverter-based technologies still cost prohibitive in the Middle East?

Experts encourage market to look beyond initial investment

| | May 21, 2017 | 9:20 am
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Although the reported benefits of innovations, such as inverter-based technology in splits and chillers, always come highly regarded, customers are apprehensive about, if not downright against, paying for the additional cost that comes with state-of-the-art products. However, a number of manufacturers are quick to point out the efforts they have made to change the prevailing mind-set and that education is a key factor in helping people move beyond a short-sighted vision.

“It is very normal for every end-user or contractor to be concerned about initial cost,” said Tuna Gulenc, General Manager, Daikin Middle East and Africa, “but what matters is the total lifecycle cost.”

Gulenc said that changing the mind-set is often a slow, yet steady, process. He gave an example gleaning from his experience in Turkey, where, he said, progress was made in a step-by-step manner but that in a period of about eight years market penetration of inverter splits increased from five per cent to nearly 100%. Aside from the training to raise awareness, Gulenc said, the “government had a lot of role here, because of regulations promoting minimum energy efficiency”.

Paras Adhvaryu, Regional Business Director, Chillers and Modular Plants, Daikin Middle East and Africa, provided a GCC perspective on regulation: “Until a couple of years back, there was minimum energy-efficiency regulations in the region. People could use what they wanted, so they went for the cheapest product available at that point of time, not considering the energy consumption or the lifecycle of the equipment, but now you have the Emirates Authority for Standardization and Metrology (ESMA) in the UAE, the Ministry of Electricity and Water (MEW) in Kuwait, and you have Qatar coming up with something soon. All over, the standards are talking about minimum energy levels; you have to meet them or exceed them.”

Adhvaryu also touched on the increase in the cost of electricity over time and talked about how in 2007 in Dubai, the electricity tariff was 20 fils per kWh, while today it is 44 fils per kWh. “So, if I was using an equipment of whatever it was that I was using in 2007, I will end up paying more than double of my operating cost in electricity bills,” he said. “Owners have become aware of that, as well.”

Adhvaryu emphasised that opting for inverter-based technology is a more efficient and cost-effective long-term option, especially as, most likely, the tariff will not remain at its current 44 fils per kWh and will only continue to increase over time. In addition, he pointed out to the increasing demand for green buildings, in an effort to reduce carbon footprint and the desire to get LEED certification. He said that inverter-based technologies will go a long way in helping business owners meet such goals. He spoke particularly on Dubai’s burgeoning construction profile and on how in the highly competitive market, building owners are looking to differentiate one project from another. Thus, investment in higher-priced technology can help provide developments with a unique competitive advantage.

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