Navigant Research Blog

Energy Efficiency Transforms HVAC

— December 2, 2014

The federal requirements for heating, ventilation, and air conditioning (HVAC) systems are about to become much stricter.  Starting January 1, 2015, residential split system heat pumps, single package air conditioners, and single package heat pumps in the United States must have seasonal energy efficiency ratios (SEERs) of 14, an 8% increase in efficiency over the current SEER requirement of 13.  The SEER rating is used to gauge the operating efficiency of cooling systems.  It is the ratio of the cooling output of equipment over a cooling season divided by the electrical input.  Indeed, driven in part by tightening regulations but also by a larger push toward greater energy efficiency, HVAC equipment is undergoing substantial changes.  When minimum SEER requirements increased in the United States from 10 to 13 in 2006, innovations in compressors, refrigerants, and system design drove efficiency improvements.  Today, several air conditioner options provide efficiency in excess of 20 SEER.

Unfortunately, there are natural limitations on efficiency gains that can be made on current equipment.  As a result, new, more efficient HVAC equipment, such as variable refrigerant flow (VRF) systems, is gaining market share in the United States.  VRF systems represent a paradigm shift in how heat is transferred throughout a building and can provide energy savings of 34% compared to current HVAC solutions.  Originally developed in Asia, the technology is now gaining market share in the United States.  Though Asian-based companies dominate VRF manufacturing, the landscape is shifting through joint ventures, such as Johnson Controls’ yet-to-be-finalized tie up with Hitachi, and through the establishment of manufacturing operations in the United States, such as Daikin’s American manufacturing line in Houston.

Further Changes Ahead

Future gains in efficiency can still be gained through better control and wider adoption of currently available equipment.  However, some are looking even deeper at reducing the energy consumption of HVAC systems.  Currently, HVAC equipment ejects heat from a building into its surroundings.  Dr. Aaswath Raman, a research associate at Stanford University, is developing technology to dump unwanted heat into outer space.  Dr. Raman has engineered a material capable of manipulating the energy levels of the light it reflects so that sunlight can be reflected and transformed to a wavelength that sends it out of Earth’s atmosphere.   In effect, it can transfer the heat generated in a building by the sun to the much larger and much cooler heat sink of outer space.  Initial tests have demonstrated that Raman’s material can maintain a 4.9°C temperature difference between a box coated in the material and the outdoors.  If deployed in buildings, the impact on HVAC requirements would trigger a new wave of innovation in HVAC equipment.

For a more detailed look at how the HVAC market is changing, please join Navigant Research’s free webinar, Innovations in Heating, Ventilation, and Air Conditioning, on Tuesday, December 9, 2014 at 2 p.m. EST.   Click here to register.

 

Smart Building Startups Continue to Flourish

— November 17, 2014

Like the “Harvard of the [insert region here],” “the Next Silicon Valley” is a term so trite that it has become meaningless.  You may have heard of the Silicon Hills, the Silicon Strip, Silicon Wadi, or even the Silicon Valley of the East.  It seems that anyone with a pulse is trying to woo tech entrepreneurs into the next Silicon cluster.  Nevertheless, tech activity is not limited to Northern California.  A recent analysis by the Financial Times found that 60% of “unicorns” (tech startups that reach a $1 billion valuation) were created outside of California’s Bay Area.

Indeed, many local governments are trying to establish startup ecosystems to rival Silicon Valley, including the government of Washington, D.C.  Recently, Mayor Vince Gray announced the awarding of grants to tech startups totaling over $800,000.  Several of these companies represent the wave of innovation occurring in smart buildings.  Aquicore, a real-time energy management software for commercial real estate and industrial facilities, received $122,500.  And Azert, the developer of Smart(er) Socket, wall sockets integrated with Apple’s iBeacon technology and Wi-Fi, also received $122,500.

Other People’s Stuff

It might seem strange to think of wall sockets communicating, and even stranger to think of any building infrastructure using an Apple technology.  What’s more, the idea of a software startup that relies entirely on building controls hardware made and installed by other vendors was until recently unthinkable.  In the past, building systems were specifically designed not to work with other vendors’ products in order to ensure a long-term market for replacements and upgrades.  But the convergence of building technology and information technology, the adoption of open protocols, and greater integration between building automation systems have lowered the barriers to entry in the smart building market.

These startups demonstrate that the competitive landscape of smart buildings is changing.  It’s easier than ever to get building data, meaning that a wider pool of competitors is emerging.  What’s striking, and hopefully indicative of future trends, is that these companies are springing up in Washington, D.C., away from the established tech hub of Silicon Valley and away from established global building controls manufacturers.  Future innovation in smart buildings can be driven by anyone, anywhere.

 

Wireless Power Promises New Capabilities for Smart Buildings

— November 11, 2014

Power_Paddle_webIn the science fiction universe, transmitting power over great distances is remarkably easy.  A shield generator could be placed on, say, the forest moon of Endor and beam its power to an orbiting space station.  Lamentably, in the real world, such extensive wireless power transfer remains elusive.  But 2015 is poised to be a pivotal year in wireless power.

Current wireless power solutions focus on charging mobile phones and electric vehicles, and both are gaining momentum.  On the mobile phone front, the first commercially available products based on the Alliance for Wireless Power’s Rezense standard will soon hit the market, while the Wireless Power Consortium’s competing Qi standard continues to expand around the globe.

In the auto industry, wireless technology represents the future of plug-in electric vehicles and could be a factory option as early as 2017.

Smart Building Applications

The promise of wireless power extends beyond these early adopter markets – particularly in smart buildings.  The proliferation of the Internet of Things in buildings is currently hindered by limitations in power and communication capabilities.  University of Washington professors Joshua Smith and Shyam Gollakota have an innovative approach to tackling both problems wirelessly.  The two have started Jiva Wireless to develop the solution and plan on taking a leave of absence in 2015 to focus on bringing products to market as early as 2016.

Their approach is to harvest ambient energy in the form of Wi-Fi, TV, and cellular transitions.  As detailed in Navigant Research’s report, Energy Harvesting, these types of systems are already gaining traction in a variety of applications.  What’s novel about the Jiva Wireless approach is the use of ambient backscatter communication, which selectively absorbs and reflects radio frequency (RF) signals, effectively combining power and communication into one function.

Landscape without Wires

The launch of Jiva Wireless adds to an already crowded field of wireless power solutions.  Many of these solutions, as promising as they may be, have yet to make it to the real world.   Funding of these companies does not appear to be a challenge, though.  Energous, a company developing a wireless power solution using radio waves, raised $24 million in an initial public offering in March, despite not having a commercially available product.  Similarly, uBeam, which has a prototype that uses ultrasonic waves to transfer power, just received $10 million in Series A funding, bringing the total amount of capital raised to $12 million.

Wireless power incumbents are shifting, as well.  Duracell, an early adopter of wireless charging for mobile electronics and the pioneer of Powermat technology, is being split from its parent company, Proctor & Gamble, as part of a strategy of divesting non-core businesses.  Meanwhile, JVIS and d-Wired are attempting to resurrect conductive wireless charging by licensing intellectual property from FliCharge.  The shifting landscape of wireless power providers indicates an interesting road ahead in 2015.

 

Building Automation Shifts to Integrated Controls

— October 12, 2014

Building automation system (BAS) controls have long acted as a cash cow for vendors.  Historically, they were built on closed, proprietary communications protocols, virtually guaranteeing steady revenue from future maintenance and upgrades.  Now, though, customers are migrating to control systems with open protocols, such as BACnet and LonWorks, to gain greater flexibility and interoperability.  The emergence of these standards is changing the landscape of building controls.

The shift to open protocols largely benefits building owners (and has unsurprisingly been driven by the demand of building owners).  Competition is increased, as all vendors are on equal footing, which drives down prices.  Naturally, controls vendors are now exploring alternatives to gain a competitive advantage and regain steady revenue.  One emerging strategy is integrating more intelligence and more controls into HVAC equipment.  Even though more vendors can compete with open systems, the more intelligence that is shipped with HVAC equipment, the less there is available for controls companies to install, thereby protecting revenue from the increased competition.

Rapid Adaptation

Johnson Controls seems to be adapting to the changing environment rapidly.  The company made two important announcements in September.  First, it is reorganizing its building efficiency business to separate the North America branch from the global products business.  This will enable the company to focus on high-margin HVAC product lines, notably air distribution and ventilation solutions and variable refrigerant flow (VRF) systems.  The second announcement signaled plans to divest Johnson Controls’ Global Workplace Solutions business.

As I noted after Johnson Controls’ acquisition of Air Distribution Technologies, the move was not about products but about controls.  Johnson Controls’ joint venture with Hitachi to provide VRF systems follows the same strategy.  VRF systems represent lower potential revenue for controls suppliers because controls are typically provided by the equipment manufacturer.  Moreover, because VRF systems use refrigerant as the heat transfer medium instead of air, the need for complex air-side control of supply air temperature and humidity is obviated.  By shifting its focus to HVAC products, Johnson Controls is ensuring that its controls stay relevant.

 

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