As more Australians start to live in strata buildings, and power bills rise, the business case for improving the energy efficiency and overall sustainability of these properties is becoming more compelling.
In NSW, an estimated 25 per cent of households live in apartments, most under strata title, with the sector tipped to comprise around 50 per cent of households within the next 20 years or so. And as the sector grows, so does the opportunity to make a substantial contribution to national emissions reductions.
It has become easier for strata title properties to undertake sustainability upgrades, according to Christine Byrne, founder of Green Strata in NSW. The Green Globe-winning community organisation assists individual strata owners, building managers and owners corporations in developing the business case, and also points them towards state or local council programs that can provide energy auditing services, funding, rebates or other support.
Byrne says the body of data developed around energy-using systems in strata buildings, the return on investment and payback periods of “low hanging fruit” initiatives is making it easier to demonstrate bottom-line benefits.
A few years ago, Byrne says, this was not the case, and the first piece of advice the organisation gave owners corporations was, “go and do an audit”.
Now, however, so many energy audits have been completed within the sector, many of them under local government programs, the big energy users have been clearly identified.
“We know the no-brainers,” she says. “All the audits come out and say the same things.”
Lighting – the first low hanging fruit
Number one on the list of easy-to-tackle items with short payback periods is lighting. The Botany Cope building for example underwent a lighting upgrade for common areas that cut energy use by 49 per cent from more than 200 kilowatt-hours a day to just over 100. The payback period, which was initially expected to be 3.5 years, was 2.5 years.
“What’s changed a lot [also] is the technology, there has been a reduction in price in LED lighting, and a lot of the form factors have also changed,” Byrne says.
By this Byrne means strata buildings with unusual common areas lighting designs and fixtures are more able to obtain a cost-effective LED alternative for retrofitting. On Botany Cope’s shopping list was an oyster light with movement sensors.
Sensors are sensible
Other easy items to install are carbon monoxide sensors in undercover car parks. Underground car parks are legally required to have ventilation equipment running 24/7, however, if a CO sensor is introduced along with variable speed drives for the fans, they only run at the level that is actually required, with considerable energy saving.
The 88-apartment Nexus building added CO2 sensors to control fan operation as part of a complete energy upgrade that also comprised installing a building management system, new variable speed drives on two pumps for the airconditioning condenser units and a monitored variable speed drive on the airconditioning condenser fan. The entire package of works cost $65,000 and had a payback period of under 48 months.
Generally, central airconditioning is a big energy guzzler, Byrne says, and upgrades like Nexus prove that increasing efficiency and reducing running costs doesn’t necessarily mean replacing big ticket items like chillers.
At Hyde Park Towers the owners corporation undertook a major energy efficiency upgrade in 2010, and part of the works program included examining the efficiency of all pumps, fans and boilers. The measures taken including installing equipment to reduce operational speed of some items and reducing the length of times fans and pumps were running. In combination with a whole-building upgrade to LEDs for 700 downlights that saved $4500 in energy costs in the first 12 months, reducing the number of fluorescent tubes used in the car parks by 50 per cent and installing timers for common area lights, the upgrade achieved a 20 per cent reduction in overall energy use.
Power factor correction
Power factor correction can be a sound investment. Network demand charges imposed on large buildings do not always reflect actual demand patterns, so this technology has been implemented by several projects, including Parkridge, a strata project that participated in City of Sydney’s Smart Green Apartments program.
The decision to proceed with the PFC technology was driven both by the decreasing price of the technology and the increase in power bills, and once installed in 2013, the payback period has been predicted to be 2.8 years based on annual energy bill savings of $1400 [at 2012 rates].
Some incentive schemes are available, such as Victoria’s Better Blocks program, Ku-ring-gai Council’s Smart Unit’s program and the NSW Government’s Energy Savings Scheme, but an owners corporation can also use its sinking fund to finance upgrades. This fund is a share of the quarterly levies set aside specifically for future upgrades or large capital items.
Byrne says the savings on outgoings – which are paid out of the general levies – can then be used to “pay back” the sinking fund.
According to Byrne, some suppliers are also starting to reach out to the sector with packages of energy-efficient options that are specifically suited to strata blocks.
The bigger challenges
There are some potential upgrades that are more difficult for owners to initiate, such as upgrading the glazing in their own apartment to double glazing. Under strata rules, the exterior fabric of the building, including the glazing, is common property.
This means any proposal to upgrade glazing would generally need to be a building-wide decision, and a very expensive and fairly complex process. A complication is that this type of upgrade benefits the individual occupant, not the body corporate. This split incentive creates difficulties in presenting the business case. The easiest upgrades are those where the owners corporation gets immediate financial benefit.
Byrne says one of the most common difficulties individual owners report is difficulty getting agreement from the body corporate of their block to install solar photovoltaic systems or solar hot water for their individual unit’s use.
Initiatives such as common gardens, worm farms and composting or installing bike racks that benefit the property as a whole can also add to the value and amenity of common property. Byrne says the main limitation for these is the question of space to install them and compliance with any relevant regulations.
Does sustainability add to resale value?
Byrne says there is a lack of data on the value of efficiency measures in terms of resale value.
“It depends on market conditions, the degree to which sustainability adds [capital] value to a strata unit,” she says. While sustainability clearly has a financial value for potential purchasers, because strata levies for building operation can be lower, Byrne says real estate agents rarely mention levies at all to potential buyers, so this aspect of value flies under the radar. Also, she says, potential buyers are generally not asking about sustainability. In terms of the market adoption curve, the green attitude shift is still in its early stages.
“We are not seeing it in this market. A huge education program needs to happen to generate demand [from buyers],” Byrne says.
One idea some owners have proposed, she says, is some form of signage or plaque for the front of buildings that lets people know how energy efficient they are.