Pitch
Creating an intelligent building retrofit platform to optimize efficiency and decrease energy consumption for any commercial buildings.
Description
Summary
Installing an intelligent building can reduce its power consumption by up to 40% - realizing instant savings on energy bills, while significantly reducing GHG footprints. However, the high capital cost of installing an intelligent system is a deterrent in today's market. ioAirFlow's solution is low capital-intensive and can be converted to an operational cost, greatly reducing the financial barrier for large-scale adoption.
Small and medium businesses in Ontario are looking to make their bottom line stretch further, while being sustainable. Businesses that own their own building, or are tenants in an existing building, are using high amounts of energy (buildings are responsible for 40% of all carbon emissions in North America) - but they can't afford an expensive green building solution.
ioAirFlow's solution is a platform that helps commercial and industrial buildings increase their energy efficiency and decrease their overall energy consumption. We achieve this through actively controlling existing mechanical systems (including HVAC and lighting systems, power bars, and more) through a centralized logic platform. We also provide data through our Internet of Things (IoT) network. This data includes benchmarking, diagnostics, green certification reporting, and energy audits that provide concrete recommendations on how to further improve.
ioAirFlow allows building managers to have access to granular temperature control with analytic oversight, in addition to the energy and related cost savings on reduced utility bills realized. Our solution can be used to monitor buildings in real-time to find out how energy is being used, as well as how your hardware is functioning.
We achieve our solution with a secure wireless solution optimized for large square footage. Unlike Wi-Fi or Bluetooth, our system is secure, centralized and would not compromise a building's IT infrastructure. In addition, our proprietary technology is reliable and easy to install in any building space.
Desirability
How do you know that your solution is desirable to SMEs, and will reduce GHG emissions?
The end user of ioAirFlow's product are building managers and tenants, while its customers are predominantly building owner-operators. Our technology can be installed into an entire building, a single floor of an existing building, or even a single office space. Tenants of any commercial building are typically responsible for their own utility bills through their monthly additional rent costs, so any building improvements directly affect their bottom line. Therefore, an easy to install green building solution is desirable.
The problem with green retrofits as a tenant is, you don't want to pay to make improvements to a building's hardware infrastructure because you can't take it with you if you move buildings - it doesn't increase your company's assets. However, ioAirFlow can be easily installed and uninstalled in a building. It can be taken with the owner of the technology - it is customer-specific, not building-specific. This makes it ideal for tenants to invest in a green solution, helping reduce their monthly utility costs. Tenants may not want to invest in physical updates to a building they are leasing, but if we can provide them with a data-driven benefit analysis on the payback period and ROI of further testing, this could be a further incentive (that would further reduce energy consumption and GHGs) that is not currently available in the market.
In our experience, building owner-operators do not retrofit their buildings because there is a lack of concrete recommendations that are provided that are easy to understand and implement ("increase your building's efficiency" is too vague for most people to understand the details on it). What ioAirFlow does is translate our data into concrete recommendations for system improvement. For example, we can track whether heat loss is greater in one room in the winter, providing a recommendation to check for air leaks in insulation or the windows. We can also notify if a piece of hardware is not properly sealed or otherwise functioning as intended, meaning the issue can be addressed before its fail point. A full suite of diagnostic solutions will complement our automation system, so that our customers can choose to install even more solutions to improve their building's efficiency, leading to more GHG reductions through reduced consumption.
We have discussed our technology with dozens of SMEs across the commercial building industry, from building owners to contractors. Based on these interviews, we are confident there is market demand for our solution and have received very positive feedback to date. Customers have expressed they want to see reliability, and proven results on reducing energy consumption. More testing is needed to demonstrate these results, which is why we need to test in more buildings. We are preparing to test our solution in real-world use cases, looking to test in multiple building types, in multiple climate conditions to ensure we have a rigorous data set.
Feasibility
What actions do you propose?
We are solving multiple customer and industry problems, some of which are outlined briefly below. These solutions are all gained by installing an ioAirFlow system in a commercial building, which includes a physical sensor network, centralized hub, and access to an API that controls the system. Not every solution will work in every building and is dependent on that building's existing infrastructure. However, each solution is an opportunity that all commercial building can pursue over time. In addition, all of these will have an impact on climate change by decreasing energy consumption in commercial buildings, while encouraging tenants and building managers to make greener choices when it comes to their energy consumption habits.
The most obvious action is the direct reduction of energy consumption within the building ioAirFlow is installed into. Any mechanical system, whether it be blinds, windows, lighting, power bars, HVAC and more can theoretically be attached to the ioAirFlow network, as long as we can attach our control sensor onto the existing hardware and it has an electronic on-off function. Connecting all of these devices to a single network provides an opportunity to optimize a building's entire energy consumption, tailored to the individual needs of each tenant and not sacrificing comfort control in any way.
By optimizing the functionality of existing hardware, ioAirFlow can prolong the lifespan of existing building infrastructure by making it more efficient. This in turn can prolong the lifespan of the building by ensuring it is still mechanically functioning for a longer time span. Buildings that last longer do not need to be demolished and reconstructed, decreasing construction costs and associated climate impacts.
Adding comfort control to replace current wired zone control can impact tenants' behaviour at the office. Creating micro-climate zones so more users will increase tenant comfort, making it unlikely they will take comfort control into their own hands (for example, bringing a space heater or fan to their workstation, which are significant energy drains to the system).
Creating long-term data trends, to observe the system over time and benchmark consumption inside the physical space. This will allow more informed decisions on what is working within a system, or what could be replaced to further increase energy efficiency. This process (known within the industry as benchmarking) also allows for inter-building comparisons, so best practices can be shared within a larger network.
When a mechanical failure occurs, it might go undetected for quite some time, or be difficult to locate. Pinpointing system failure points with more accuracy using ioAirFlow's network will lead to less system downtime, faster fixes and even the ability to incorporate preventative maintenance - finding out a system's fail point at the moment it occurs, or diagnosing issues before they reach a failure point.
ioAirFlow can collect and produce the required reports for organizations such as LEED, BoMa, Energy Star, ASHRAE and more. Reducing the adoption barrier on green building certification by making the data report accumulation easier to acquire will further encourage building owners to 'go green' and pursue these certifications. This will help drive the green economy, and help grow the building retrofit market.
Diagnostics and energy auditing provide concrete steps and recommendations that a user can take to further reduce their energy consumption. As noted above, ioAirFlow could track against heat loss due to poor insulation. Further examples of an audit include using motion sensors to determine whether a room is being under-used, and can accordingly recommend adjustments to heating, lighting, and more. At a systems level, diagnostics can identify whether a piece of hardware is malfunctioning, which can cause every other piece of hardware to have to work harder as a result (for example, if one damper in a system breaks but the thermostat that damper is connected to wants the temperature adjusted further, the entire system will continue to blast in fresh air until that thermostat is satisfied. This is an extreme and wasteful use of power).
Providing micro-zones also creates an opportunity to increase comfort control, so people have greater control to their own temperature. This would reduce bad habits in energy consumption, such as having space heaters under desks or leaving the window open in the winter. If micro-zoning temperatures does not provide a satisfactory solution, then a room audit may be able to identify alternate steps that could be taken to better regulate building systems that use less energy.
Who will take these actions?
ioAirFlow is an incorporated for-profit corporation working with businesses and customers to install our solution in commercial buildings across North America. There are some Ontario-specific organizations that we are already partnered with, or would partner with during this project. These are outlined below.
Our current partner, Behr Technologies, is the worldwide licensing body for the wireless network used by ioAirFlow called MIOTY. We have a longstanding partnership with this company, and will be working directly with them to optimize our wireless infrastructure. The company is based in Toronto.
Benchmarking in commercial buildings in Ontario was recently made mandatory, and there will be a demand for companies that can provide benchmarking solutions. We would work with organizations such as the Canada Green Building Council, ASHRAE, BOMA, and Energy Star (all of which have local Ontario chapters) to provide a solution both for their members and further afield. The probability of a carbon tax being brought in by the federal government also creates an opportunity, based on future cost avoidance on utility fees.
Government offices and agencies are potential customers for our platform, and we could install ioAirFlow in government buildings as part of this project. The commitment to sustainability by the Ontario government, while currently in flux due to the change in government, is still a strong incentive to install retrofits (especially those that reduce operating costs).
Where will these actions be taken?
There is a direct correlation between a larger square footage and greater return on investment when installing ioAirFlow, so ideally we would focus on larger building footprints. Toronto would be an ideal market for us (we have a partner company headquartered in Toronto, and we could work out of that office when running our tests). We would have capacity to pilot our project in Toronto ourselves between November 2018 and June 2019.
What are the proposal’s projected costs?
To be installed in five buildings, our projected cost would vary based on the square footage and existing mechanical infrastructure we are installing our solution into. Assuming that we are installing onto an HVAC system with variable air volume (VAV) dampers, and assuming an average floor space of 50,000 square feet per test, we would be able to recycle our hardware, meaning a one-time hardware purchase for all buildings. Our identified hardware supplier will be able to fulfill purchase orders by September 2018, with an estimated cost of $300/sensor (this cost will decrease as production increases due to economies of scale). If purchased in November, estimated hardware costs would be roughly $20,000 for 100 sensors (assuming a price decrease down to $200/sensor by November - this may be further reduced).
The only other costs would be for installation time, monitoring time, and if the test sites would require us to pay a portion of their utility costs during the testing period (or any additional payment). These would have to be negotiated on an individual basis, but a cost estimate would be minimal ($1,500 per test, or $7,500 total).
If travel and accommodation costs are included as part of the projected costs, and assuming all tests are staggered, then travel and accommodation costs are projected to be $750 per trip. For 5 building tests, 6 trips would be required, for a total cost of $4,500.
Given all of the above, at a high-level forecast, projected costs for our proposal would be $32,000. More information can be made available in a detailed project budget, and once test sites have been identified.
Scalability
Once the solution is built and implemented describe a path forward for it to scale to other users/companies.
According to the US EIA, there are 5.6 million commercial buildings in the United States. Extrapolating to Canada, we can assume there are about 6.1 million commercial buildings. 70% of buildings that exist today are anticipated to exist in the year 2050. This represents a total addressable market of just over 4.3 million buildings across the US and Canada.
ioAirFlow's target market is buildings constructed before 1990 (where automation is unlikely to currently exist), over 50,000 square feet (where mechanical building controls are more complex and require multiple zones). In the U.S., 50.3% of all current buildings were constructed between 1946-1990, while 50.7% of all buildings are over 50,000 square feet. This means the target market is an estimated 3.1 million buildings. Of these, some buildings will already have an automation system, and some will be unwilling to engage in recommissioning. Conservatively, the active target market for ioAirFlow with a potential receptive customer audience in the U.S. and Canada would therefore be at least 1.5 million (assuming a 50% pickup rate).
Our network infrastructure provider is in the process of scaling up, and has already announced partnerships with many world-class companies including Microsoft and Advantech (for more details, see here:https://behrtechnologies.com/news/advantech-behr-technologies-hitachi-solutions-and-microsoft-collaborate-to-develop-iiot-connectivity-solutionsThis provides us an opportunity to scale up our solution with these partners, who are already working in the automation space with similar technologies.
We have met with a world-leading technology company (under NDA) that has expressed an interest in partnering with us, provided we can provide them with use case data that validates our technology. These tests would give us the results we need to pursue that partnership, which has the potential to scale not only in North America, but worldwide.
How will your solution lead to change on a larger scale over time (i.e. 3 to 5 years out)? How many businesses can potentially be affected by your solution?
ioAirFlow's target market in North America is 3.1 million buildings. As buildings consume an estimated 40% of all energy continent-wide, reducing building energy consumption is one of the most effective ways to reduce greenhouse gas emissions. By scaling up, ioAirFlow expects to have a large-scale operation in both Canada and the U.S. This would allow us to reach our full market potential, contributing to a measurable and large-scale decrease in building energy consumption levels.
Our solution provides a retrofit solution for a whole new customer segment: tenants, and owner-operators buildings with no net revenue to invest into their real estate assets. By providing data, control automation, and further green recommendations we can have a greater influence over people's behaviour when it comes to changing consumption habits in their buildings, while minimizing behavioural change which prevents further optimization (as well, automating a system takes human error out of the equation).
What business and funding model have you considered for your solution to become sustainable?
ioAirFlow's business model is two-pronged: an installation cost for the required hardware and installation, and a monthly subscription fee. This monthly fee would be a 'value-plus' model, with baseline support being active system control and the ability to better control climate zones in a building. For an additional fee, the company could use the data it collects to provide benchmarking reports, green building reports, and more - these fees would be affordable, and ioAirFlow will work with companies to determine a price point that is still appealing to the average small business owner. Given the cost of maintenance for HVAC systems, access to preventative maintenance and diagnostic reports alone could save the company money in repair bills.
Our revenue structure for customers is to offer an amortized loan - turning these expenditures from a capital to an operational cost, making the cash flow hit less onerous. We have already identified a financing partner who can help set up this structure once ioAirFlow is ready to enter into paid contracts.
To achieve commercialization, capital funding is still required. ioAirFlow is currently seeking a capital injection through a combination of grants, loans, and private equity. These conversations are currently ongoing.
Impact
What impact will the proposed actions have on reducing greenhouse gas emissions?
Net environmental benefits include increased efficiency of building energy use, as well as the directly correlated decrease in consumption. By removing the capital-intensive barrier to entry on smart building retrofits, ioAirFlow hopes to also expand the potential market cap of building owners who see recommissioning as a viable option.
Automating a system will increase its efficiency, simply by taking the possibility for human error out of the equation and allowing for maximal building optimization. Additionally, a wireless solution provides greater customization of a building's control systems. By moving to a software-based platform, a building is better able to control its scheduling system. This includes having different setpoints based on your tenants’ working hours, automatically changing the setpoint for holidays and weekends, and automatically reducing airflow in unoccupied spaces. All of these will lead to a reduced GHG output.
What are other key benefits?
Access to data is a significant factor in making green decisions. Sometimes, all it takes to change a bad habit is to show the pattern of behaviour and find a better way forward. Accessing the right data will help expose those bad habits, and propose more effective solutions. ioAirFlow’s system collects data to use in system monitoring and benchmarking, including measuring energy consumption over time at a granular level. With that data, you can find new solutions to reduce bad consumption habits. You can also identify areas or construction zones that require more intensive work – for example, by tracking heat loss around external walls, you could identify where a wall might need to be re-insulated, or where HVAC ducting may be loose and leaking airflow.
About the Authors
Matt Schaubroeck is President & CEO of ioAirFlow, Inc. He is an MBA based on Canada, and co-founder of the company. He has developed the business case, with the technical assistance of a team of engineers. The ioAirFlow team is incorporated and purely based in Canada.
Related Proposals (optional)
References
https://www.ioairflow.com/ioairflow-blog
https://www.cagbc.org/cagbcdocs/advocacy/CaGBC_Roadmap_for_Retrofits_in_Canada_2017_EN_web.pdf
https://www.nrcan.gc.ca/energy/products/energystar/18953
https://www.carbontrust.com/media/13187/ctg054_energy_management.pdf
https://www.conferenceboard.ca/e-library/abstract.aspx?did=4832&AspxAutoDetectCookieSupport=1
https://www.eia.gov/consumption/commercial
https://www1.eere.energy.gov/buildings/publications/pdfs/corporate/bt_stateindustry.pdf
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