Although the primary purpose of heating, ventilation, and air conditioning (HVAC) systems in commercial buildings is occupant productivity, the objective of most changes to HVAC systems in the next five years will be to decrease energy cost. Because of rising energy prices and the drive to reduce greenhouse gas (GHG) emissions associated with building operations, many building owners have begun to manage energy cost actively as an asset, rather than a fixed cost. HVAC accounts for almost one-third of the energy cost in commercial buildings, so these systems hold great potential for energy savings.

The HVAC industry in the United States changes slowly. Most commercial space is in small and medium-sized buildings and is heated and cooled by packaged units sold as commodities. Because of intense price sensitivity in the market, new features are only added as necessary for regulatory compliance and market differentiation. In large buildings, new construction and retrofits are designed for energy cost savings in the range of 20% to 35%, with incremental changes in conventional practices. While unconventional HVAC engineers achieve HVAC energy cost savings well over 50% with improved occupant productivity, at comparable prices, this practice is rare and appears unlikely to spread rapidly. At many levels, from national, state and local governments to corporate boardrooms and ratepayer-sponsored Demand Side Management programs, energy policies have a major impact on the market, driving innovations which would not otherwise occur, while also preventing other innovations which might have occurred.

This Pike Research report explores emerging HVAC innovations for the commercial building market, including building energy management systems, underfloor air distribution, active and multiservice chilled beams, and onsite ice-based thermal energy storage. The study includes an examination of market drivers and challenges, technology issues, profiles of key industry players, scenarios for market adoption, and forecasts for each sector.

Key questions addressed:

• Which HVAC innovations are most likely to expand significantly in the next 5 years, and why?
• Which HVAC innovations have short payback periods in retrofits, and attractive first cost increments for integrated design in new construction?
• What are the relative strengths and weaknesses of Underfloor Air Distribution versus Integrated Chilled Beams?
• For onsite Thermal Energy Storage, what are the primary market barriers and successful business strategies to address these barriers?
• What market interventions and investments have potential for major impact on the market for Rooftop Units in the southeastern U.S.?
• What policies will drive European innovation ahead of the U.S.?
• Which aspects of HVAC are likely to be subject to increasing levels of litigation, and how can this risk be mitigated?

Who needs this report?

• HVAC system manufacturers
• Energy service companies
• Architects, engineers, and contractors
• Commercial building owners and managers
• Utilities
• Government agencies
• Industry associations
• Investor community

Table of Contents

1. Executive Summary

1.1 Introduction

1.2 HVAC Industry Trends Regarding Innovation

1.3 Innovations Poised for Growth

2. Market Issues

2.1 Market Divisions

2.1.1 System Type, Building Size, and Region

2.2 History

2.3 Global Drivers

2.3.1 Cost and Risk Reduction

2.3.2 Greenhouse Gas Reduction and Public Image

2.3.3 Government/Utility Incentives and Regulations

2.3.4 Energy as an Asset to Be Managed

2.3.5 Attracting and Retaining Customers, Employees, and Tenants

2.3.6 Shifting Load Share and Integrated Design

2.3.7 Peak Load

2.4 Global Barriers

2.4.1 Lack of Capital

2.4.2 Uncertain or Insufficient ROI

2.4.3 Lack of Knowledge

2.4.4 Split Owner-Tenant Incentive

2.5 European Drivers

2.5.1 Policy

2.5.2 Culture

2.6 U.S. Drivers

2.6.1 Energy Cost Savings

2.6.1.1 ENERGY STAR

2.6.2 Public Image

2.6.2.1 LEED

2.6.3 Government/Utility Incentives and Regulations

2.6.3.1 Building Codes

2.6.3.1.1 ASHRAE Standard 189.1

2.6.3.2 Utility Incentive Programs for Energy Efficiency

2.6.3.2.1 Least Cost Procurement

2.6.3.2.2 Utility Rate Decoupling

2.6.3.3 U.S. Department of Energy

2.6.3.3.1 Energy Efficiency & Renewable Energy Commercial Building Energy Alliances

2.6.3.3.2 Commercial Building Partnerships

2.6.3.3.3 National Action Plan for Energy Efficiency

2.6.3.4 U.S. Environmental Protection Agency

2.6.3.5 Regional Policies and Programs

2.6.3.5.1 Mandatory Energy Performance Disclosure

2.6.3.5.2 New York City, PlaNYC 2030, Greener Greater Buildings

2.6.3.6 National Energy Policy

2.6.3.6.1 Carbon Trading

2.6.3.6.2 Chiller Replacement

2.6.4 Occupant Productivity

2.6.5 Awareness

2.6.6 Appraisal and Valuation

2.6.7 Attracting Tenants

2.6.8 Wal-Mart

2.7 Barriers in the United States

2.7.1 Financing

2.7.2 Institutional Inertia

2.7.3 Awkward Investment Vehicle

2.7.4 Small Installed Base

2.7.5 Low Priority vs. Other Concerns

2.7.6 Short Time Horizon in Private Buildings

2.8 HVAC Manufacturers in the U.S. Market

2.8.1 Aaon

2.8.2 Carrier/United Technologies

2.8.3 Honeywell

2.8.4 Lennox

2.8.5 Siemens

2.8.6 Trane/Ingersoll-Rand

2.8.7 York/Johnson Controls

3. Technology Issues

3.1 Introduction

3.2 Emerging Design

3.2.1 Integrated Design

3.2.2 Building Information Modeling

3.2.3 Demand Controlled Ventilation

3.2.4 Mixed Mode Ventilation (Passive + Mechanical)

3.2.5 Dedicated Outdoor Air Systems

3.2.5.1 Regenerative Dual Duct Systems

3.2.5.2 Buildings for a Sustainable Climate

3.3 Emerging Technologies with Market Scenarios

3.3.1 Energy Management and Control in Buildings

3.3.1.1 Building Management Systems/Building Automation Systems

3.3.1.2 EMS

3.3.1.3 Integration

3.3.1.4 Building Energy Management Systems

3.3.1.5 Drivers

3.3.1.5.1 Convergence of BMS and IT

3.3.1.5.2 Smart Grid

3.3.1.6 Barriers

3.3.1.7 Market

3.3.1.8 Key Industry Players

3.3.1.8.1 Aircuity

3.3.1.8.2 Optimum Energy

3.3.1.8.3 Telkonet

3.3.1.9 Scenarios

3.3.2 Onsite Thermal Energy Storage

3.3.2.1 Overview

3.3.2.2 Drivers

3.3.2.2.1 For Utilities

3.3.2.2.2 For Building Owners

3.3.2.3 Barriers

3.3.2.4 Market

3.3.2.4.1 Calmac

3.3.2.4.2 Ice Energy

3.3.2.5 Scenarios

3.3.2.5.1 Building Integrated TES

3.3.3 Underfloor Air Distribution

3.3.3.1 Overview

3.3.3.2 Drivers

3.3.3.3 Barriers

3.3.3.4 Market

3.3.4 High-Performance Rooftop Units

3.3.4.1 Features and Challenges

3.3.4.2 Drivers

3.3.4.3 Barriers

3.3.4.4 Market

3.3.4.5 Scenarios

3.3.5 Geothermal Heat Pumps

3.3.5.1 Water Source Heat Pumps

3.3.5.2 Drivers

3.3.5.3 Barriers

3.3.5.4 Market

3.4 Additional Emerging Technologies

3.4.1 Displacement Ventilation

3.4.1.1 Drivers

3.4.1.2 Barriers

3.4.1.3 Market

3.4.2 Split Ductless Heat Pumps

3.4.2.1 Overview

3.4.2.2 Drivers

3.4.2.3 Barriers

3.4.2.4 Market

3.4.3 Thermally Powered Cooling

3.4.3.1 Types

3.4.3.1.1 Absorption Size

3.4.3.1.2 Absorption Applications

3.4.3.1.3 Absorption Heat Source, Installation, and Operation

3.4.3.1.4 Absorption Environmental Hazards

3.4.3.1.5 Manufacturers

3.4.3.1.6 Adsorption Drivers

3.4.3.1.7 Barriers

3.4.3.1.8 Dehumidification

3.4.3.1.9 Solid Desiccant

3.4.3.1.10 Liquid Desiccant

3.4.3.1.11 Direct and Indirect Evaporation

3.4.3.2 Solar Thermal Cooling

3.4.4 Chilled Beams

3.4.4.1 Drivers

3.4.4.2 Bariers

3.4.4.3 Market

3.4.5 Energy and Heat Recovery Ventilation

3.4.5.1 Drivers

3.4.5.2 Barriers

3.4.5.3 Market

3.4.6 Radiant Panels and Slabs

3.4.6.1 Drivers

3.4.6.2 Barriers

3.4.6.3 Market

3.5 Beyond the Scope of this Report

3.5.1 Combined Heat and Power

3.5.2 District Thermal Energy

3.5.3 High Volume Low Speed Fans

4. Market Scenarios

4.1 Introduction

4.2 Scenario 1: Business as Usual

4.3 Scenario 2: Radical Efficiency

5. Acronym and Abbreviation List

6. Company Directory

7. Table of Contents

8. Table of Charts and Figures

9. Scope of Study, Sources and Methodology, Notes

List of Charts and Figures

• Total Space by Sector: ENERGY STAR Rated vs. Not Rated
• Certified Green Building Space, United States: 2010-2015
• Building Energy Management System Revenue, United States: 2010-2015
• Ice-Based Thermal Energy Storage Revenue, Rooftop Units, North America: 2010-2015
• Ice-Based Thermal Energy Storage Revenue, Custom Systems, United States: 2010-2015
• Underfloor Air Distribution Revenue, United States: 2010-2015
• Commercial Floor Space with RTUs for Primary Cooling by Application, United States
• Annual Cooling Energy Used by RTUs by Application, United States
• Western Climate Challenge-Certified Rooftop Unit Revenue, United States: 2011-2015
• Geothermal Heat Pumps in Commercial Buildings, Annual Revenue, Including Equipment and Installation, United States: 2010-2015
• States with Decoupling Legislation
• Survey Respondents Who Consider Energy Efficiency a Priority
• Longest Payback Period Allowed for a Significant Energy Efficiency Investment

List of Tables

• Total Space by Sector: ENERGY STAR Rated vs. Not Rated
• Certified Green Building Space by Program and Segment, United States: 2010-2015
• Certified Green Building Space, United States: 2010-2015
• Building Energy Management System Revenue, United States: 2010-2015
• Ice-Based Thermal Energy Storage Revenue, Rooftop Units, North America: 2010-2015
• Ice-Based Thermal Energy Storage Revenue, Custom Systems, United States: 2010-2015
• Underfloor Air Distribution Revenue, United States: 2010-2015
• Commercial Floor Space with RTUs for Primary Cooling by Application, United States
• Annual Cooling Energy Used by RTUs by Application, United States
• Western Climate Challenge-Certified Rooftop Unit Revenue, United States: 2011-2015
• Geothermal Heat Pumps in Commercial Buildings, Annual Revenue, Including Equipment and Installation, United States: 2010-2015