As utility costs represent approximately 35 to 50% of the budget for high-rise condominiums, reducing these costs can significantly impact a corporation’s budget and the common expense fees paid by unit owners.
Smart Energy Recovery (“SER”) is a new eco-friendly company that assists condominium corporations in making energy-saving retrofits to building equipment and systems at no upfront cost to the corporations.
Here’s how it works. SER conducts an inspection of the building’s systems and equipment, such as windows, boilers, HVAC, lighting, motion detectors, CO² detectors and water pipes and reviews the corporation’s utilities bills for the previous two years. After a preliminary report has been prepared, SER then commissions a comprehensive independent energy audit which will make recommendations about what equipment/system retrofits should result in reduced energy consumption. After the corporation’s board of directors approves the retrofits and a work schedule, the corporation and SER enter into a service agreement (the “Agreement”).
The retrofit work may include a number of measures that will reduce electricity, gas and/or water consumption on the condominium property, including installation of more energy-efficient lighting, boiler replacement or upgrades, chiller replacement or upgrades, more efficient pumps, load shedding equipment, building energy controls and establishment of energy management best practices. SER pays for the cost, installation, ongoing maintenance and monitoring of the new equipment for the 15-year term of the Agreement.
In order to determine the monthly volume of electricity, gas and/or water savings resulting from the retrofit work the corporation’s monthly consumption of each utility is compared to the average baseline monthly consumption in the two years prior to entering into the Agreement with SER. SER will pay for the cost of the retrofit from the savings and pay the condominium its guaranteed savings outlined in the contract. SER will assume all the risk that the savings are adequate to do so. Adjustments are made to take into account increases of greater than 3% in the retail cost of the utilities over the course of the Agreement. As SER pays for the retrofit equipment, SER is entitled to any government or utility sponsored grants, rebates or financial incentives relating to the retrofit equipment.
During the term of the Agreement the retrofit equipment installed belongs to SER. At the end of the 15 -year agreement the condominium corporation buys the equipment from SER at its market value.
By partnering with SER, condominium corporations can get new equipment without having to make any upfront costs to acquire and install the equipment. In addition to any savings resulting from reduced energy consumption the corporation will also see additional savings by not having to maintain the equipment.