Itihad Community Management

The pressure on Owners’ Association Managers and Interim Boards of the Dubai’s Owners’ Associations to save on energy bills has created a sort of group think in the entire industry.  Owners’ complain of high service charge, the OA manager explains that more than 50% is going to energy bills, the solution; install meters and transfer some cost of energy to tenants, which will directly reduce service charge, and once tenants will start paying for what they use the overall energy consumption will also decrease.

Not sure how much energy or actual dirhams are saved but a potential meter fixing will cost a couple of hundred thousand dirhams, and will bring with it an ongoing process of billing. Is meter fixing the solution to high energy consumption?

The ability to measure consumption does not guarantee any saving leave alone its ability to payback the investment done on it. However, having meters and the ability disconnect does equip the management with a tool to improve service charge collections. Meters are particularly useful in developments where occupancy levels are low and owners may argue why they have to pay a consumption charge when the unit is unoccupied. The same also applies to units with big terraces.

Itihad Community Management

There are 5 typical Chilled Water System arrangements that exist in various developments across Dubai;

  1. Chilled Water supplied by District Cooling Company (DCC). DCC bills private units directly and the OA pays only for the common areas.

  2. Chilled Water supplied by District Cooling Company (DCC). DCC bills the entire development as a single entity. OA does sub metering to recover consumption from units. How capacity is charged depends on the capability of its Manager.

  3. Chilled Water supplied by Own Chiller. Sub-meters are installed and OA does the billing.

The OA can save energy bills by:

    1. Optimize Chilled Water PUMPS which run on electricity and contribute significantly to the electricity bills.

    2. Install Programmable Thermostats in Common Areas, such as corridors and gym, and programming them to turn off during specific hours . Alternatively security/cleaning or maintenance staff could be instructed to turn off the AC Units at specific times of no usage and set temperature to 24-26 C when in use.

    3. Ensure that HVAC equipment in common areas is maintained well. Dirty filters, malfunctioning actuator valves, faulty controllers, could have a steep effect on the bill.

    4. For buildings with their own chiller they must get their plants optimized.

  1. Chilled Water supplied by District Cooling Company (DCC). There are no sub-meters entire cost is covered by Service Charge.

  2. Chilled Water supplied by Own Chiller, there are no sub-meters and the entire cost is covered by Service Charge.

For arrangements 4 and 5 following additional ways may work

  1. the OA may consider regulating chilled water flow of the entire building.

  2. The cost of fitting sub-meters should be justifiable.

    1. Compare at least past 1 year consumption with similar developments in terms of tonnage allocation and occupancy.

    2. After examining the common areas consumption in other similar developments the OA can estimate its own consumption in common areas. And thereafter the estimated consumption of units can be charged to tenants as a dynamic rate per sq ft (reviewed annually).

    3. How much saving is achieved by measures above and how much is expected by installing meters?

Can Owners Increase Rental Return by Charging Cooling Cost to the Tenants?

Consider yourself a tenant and answer if you would pay the same rent for two apartments, wherein one you have to pay for Chiller and in one you don’t.  In the short run the difference may not be very obvious however the market forces will surely play their role to adjust the prices. To save energy and money HVAC systems must be efficient.

Can installation of BTU meters reduce Energy bills?

Chilled Water (BTU) meters do provide a fair and transparent process of cost allocation, however BTU meter installation is simply a means to an end and not an end in itself. Mere presence of meter does not save energy. Much more needs to be done at the equipment and awareness fronts.

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