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East Village Co-op Cuts Fossil Fuel Use by 80% Through Hybrid Electrification & Heat Pump Install

Kathryn Farrell in Legal/Financial

East Village

The International Tailoring Company Building has achieved a triple-play with hybrid electrification: cutting fossil fuel use by over 80%, reducing annual energy use by 57% and — crucially — making apartments more comfortable. Improved climate control was a key driver for the upgrades at the 173-unit East Village co-op, which enable shareholders to enjoy both heating and cooling throughout the year, something the previous system did not allow. “We stayed in heating mode well into the spring when the apartments that are blasted with sun were too hot,” says board president Eric Einstein. 

Knowing the loft building’s dual-fuel boiler and chiller equipment was nearing the end of its useful life, the board enlisted Ecosystem, an integrated engineering and construction firm, to figure out how to make the apartments more comfortable. The far-sighted board began planning the project before Local Law 97 went into effect in 2019, and with the first compliance period this year decided to pivot away from fossil fuels. The solution was a modification of the co-op’s original water-loop heating and cooling system and the installation of nine air-source heat pumps on the roof. In addition, two gas-fired condensing boilers were installed in the basement to provide backup for the building. The upgrades will eliminate Local Law 97 penalties through 2050. 

The hybrid combination of heat pumps and boilers is necessary because heat pump performance falls in very cold weather. To fully electrify the building, three times the number of heat pumps would have been necessary, says Jaime Pereira​​​​, senior business development manager at Ecosystem. That wasn’t feasible given the roof space, and would have required costly upgrades to the electrical capacity. “This building didn’t need an electrical service upgrade — we are still operating within its existing electrical infrastructure,” he says. The two new gas-fired boilers ensure that the building will still have heat if there’s a major winter weather event.

Each apartment now has a hybrid water-source heat pump with heat and cooling provided through new fan coil units. The system runs water rather than refrigerant in the pipes and if residents run their cooling in winter — because of the building’s huge windows, some apartments heat up on sunny days —  the excess heat from their apartments is added to the water loop, lowering energy costs for the building. “There is minimal wasted heat because it is being recovered and used in the units or the domestic hot water system,” Pereira​​​​ explains. Crucially, the thermal-energy storage capabilities in the water loop make the project eligible for a transferable tax credit from the Inflation Reduction Act — with a sizable payback expected to be in the seven-figure range.

Long-term planning was key to financing the project, which exceeded $9 million and also included the replacement of the co-op’s deteriorated risers. “We started increasing our maintenance more than we needed eight or nine years ago in anticipation of needing a larger mortgage and a pool of cash for capital projects,” Einstein says. This strategy avoided the need for an assessment. Incentives from Con Edison and through NYSERDA covered $1.84 million of the total cost. The project was completed last year.

Another element of the upgrades was the replacement of the cooling tower with an adiabatic dry cooler, which eliminates the risk of Legionnaires’ disease and has fewer maintenance issues. In addition, a fresh air intake system was recommissioned to improve ventilation. AKAM property manager, Levani Sidiani, who manages the property and oversaw the project, says the new mechanical system is simpler to operate. “It's a huge relief for management as well as the building,” he says. “And shareholders are happy, especially considering the new system is more energy efficient.” 

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