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Facilities HVAC Replacement Strategy for the New Year

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Last Updated on January 5, 2017

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Maintaining of a large corporate property portfolio is a complex job. Take your HVAC for example: keeping hundreds or even thousands of HVAC units running is mission critical. Yet FM is responsible for more than just upkeep of all these units. Increasingly, you are tasked with:

  • Keeping the environment comfortable for employees and customers
  • Reducing business downtime due to emergency repairs or equipment failures
  • Reducing energy consumption and cost
  • Switching to more environmentally-friendly refrigerants as required by federal mandate

As equipment ages, it becomes more inefficient. As a result, it’s increasingly likely to break down, provide inconsistent comfort, and drive up energy costs. That’s why meeting the objectives above requires having a plan for proactive HVAC replacement as units reach a certain level of inefficiency.

HVAC Replacement Strategy Step 1: Gather data

How can you tell which units are most likely to fail? Unfortunately, it’s not as easy as just replacing the oldest equipment first. There are more factors that impact the reliability and efficiency of an HVAC unit. Here is the information you should be regularly collecting in a central repository about all of your HVAC equipment. Armed with this data, you can devise a smart HVAC replacement strategy.

  • Original system specs (including the size and type of unit, model, serial number, age, and efficiency rating).
  • Condition (as reported by field maintenance experts during PM and repair visits). Develop a set of defined condition ratings so you know you’re comparing apples to apples.
  • Repairs history and cost data (time & materials). Track these costs both for the current year and over the lifespan of the unit.
  • Cost to replace HVAC system.
  • Current energy efficiency and cost to operate units.

HVAC Replacement Strategy Step 2: Analyze data and set priorities

With regular reports including the above data, you can begin to set priorities for HVAC replacement.

Be sure to consider the cost to operate and repair expenses along with equipment age. In some cases you will find older units that still have low maintenance expenses, but cost to operate is increasing due to losing energy efficiency. The local cost of electricity can sometimes factor into this equation as well: less efficient units are more of a liability when utility rates are higher.

Upcoming real estate strategies may also influence your HVAC replacement strategy. For example, you might be planning relocations, remodels, exiting a lease, or an increase or decrease in capacity at any location. Those decisions may make HVAC replacement in those locations a higher priority.

In many cases, you will probably find that replacing the units with the worst condition ratings first will bring the biggest return. That’s because you will improve cost to operate as well as avoiding expensive repairs.

HVAC Replacement Strategy Step 3: Build your business case

Now that you have prioritized the units you want to replace, you’re going to need to build a business case showing the costs associated with the HVAC replacement project as well as the return you can expect.

You have most of the information you’ll need to put this together from the data you have collected and analyzed. However, there are a few more factors you may want to consider.

1. Consider newer technology
When you factor the cost of replacing a unit (especially under emergency conditions), you probably assume you will simply replace each unit with a newer version of the same equipment type and size. However, it pays to think about upgrading to newer and more efficient technology for HVAC replacement. For example, you might replace an old rooftop unit with a customizable and energy-efficient VRF system that can provide heating and cooling simultaneously.

Related article: Is a VRF HVAC System the Right Choice for Your Business?

Investing in new technology often costs more initially and will need to be explained in your business case. But the long-term benefits, including enhanced comfort conditions, better reliability, and lower cost to operate, can often justify the upfront expense.

Learn more about the types of air conditioning system that are best suited for your facilities: The Ultimate Guide to NYC Light Commercial Air Conditioning.


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2. Factor in additional expenses for emergency HVAC replacement
Don’t forget that it almost always costs more for HVAC replacement in an emergency breakdown situation than doing it proactively. Make sure these costs are accounted for in your business case.

For example, an emergency replacement will take more time and result in more business interruption. That means the emergency HVAC replacement cost should include the cost of lost business while the location remains closed. Or, the cost of leasing temporary equipment for an extended period of time while waiting for equipment to be shipped and permits to be approved.
Planned replacements, on the other hand, can be scheduled in advance with minimal business disruption and extra expense.

3. Get advice from the experts
When putting together a business case for a HVAC replacement strategy, be sure to get bids and advice from trustworthy HVAC experts. A company that is experienced with servicing large facilities and multiple-location businesses will understand the issues you face. They can work with you to help you put together a proposal that works for your goals and your budget.

Related article: 7 Commercial HVAC Maintenance Tips for Multi-Location Businesses

HVAC Replacement Strategy Step 4: Getting buy in

Getting approval from upper management for your HVAC replacement project depends on more than your business case. Remember to show how your initiative can help with other goals and concerns that your management is focused on.

For example, for a retail-based business, customer experience is a very important consideration. While the longer-term cost savings you present may be compelling, it’s likely that high level executives will be equally concerned with the immediate benefits of enhancing the shopping experience for customers. Show them how HVAC replacement contributes to customer comfort.

Even for businesses with more traditional office environments, employee experience is becoming is big concern. That’s because of the so-called “war for talent” corporations are facing trying to attract and retain key employees with the skills they need to be competitive. Improving employee experience is also critical for improving productivity. In fact, according to IFMA, the top 2 employee complaints in the workplace relate to the temperature of the office. Your HVAC replacement strategy can make a contribution to your company’s efforts to improve productivity and be more competitive in your market.

If you would like some advice about putting together an HVAC replacement strategy for the coming year, please feel free to reach out to Arista at any time!