Construction Today - September/October 2017 - 83
IN THIS SECTION
'There are simple ways
to manage cost and
complexity to get the
equipment you need.'
ment replacements. You can manage cost and complexity by determining whether you need new hardware, software or both.
If your building uses modern devices with modulating capabilities and digital controls, you likely won't need to buy any new
equipment. You can layer advanced control strategies on top of these
technologies at a relatively low cost and reap the benefits of energy
savings, tenant comfort and improved productivity.
However, if your energy systems are outdated, you will need to buy
new equipment. You can still manage cost and complexity in this
scenario by deciding whether to buy or finance.
Let's review two options:
* Cash Purchase: Your first option is to pay for the equipment and
upgrades in full at the time of their installation. The advantage
of purchasing your equipment is just like when you pay cash for
a car - the car is yours, and you don't owe any interest or fees to
the bank. The disadvantage of purchasing is that you won't have
that cash for strategic investment or a rainy day. With an outright
cash purchase, you will make a large capital investment in year
one. Energy savings and incentives will offset part of this cost, but
most savings will occur in the years that follow, over the life-cycle
of the equipment.
* Equipment Financing: Your second option is to finance th
equipment and pay for the upgrades over time. "Equipment
financing" has become the industry catch-all term for equipment loans and leases. The two most commonly used forms of
equipment financing for HVAC/controls are bank loans and
capital leases. With capital leases, you can replace or upgrade
your HVAC/controls with no cash out of pocket. Your monthly
payments in many cases will be less than your anticipated energy
savings, making the project cash flow positive from month one.
Consider a situation, for instance, where a chiller breaks in the
middle of the summer in a large-scale apartment building. This will
quickly result in a chaotic situation for you and a frustrating predicament for tenants if the issue is not remedied swiftly. The repairman
recommends a new, high efficiency unit but the pricey replacement
will place strain on your cash flow. In this case, equipment financing is
the smart choice to fix a costly and unexpected issue.
allow Haselden to keep a
hospital project on track.
A community center will
be an asset to the Town
of Pelham, Ontario.
Perini Management Services Inc.
Barr and Barr - Construction of
Amherst College New Science
Skanska USA Inc.
Haselden Construction -
UCHealth Longs Peak Hospital
Bancroft Construction Co. -
Smart buildings are the future. Advanced
HVAC/controls systems generate energy savings, fuel tenant comfort and spur economic
growth for you, the building owner. Although upgrading to "smart" equipment can
be an expensive and complex process, there
are simple ways for you to manage cost and
complexity to get the equipment you need.
Cash purchase is one option. Equipment
financing is another, and making financing
accessible for the commercial building industry is vital not just for our infrastructure,
but for those who live and work within it.
Matt Worth is vice president and general manager of Noesis, a LeaseQ company.
He has 20 years of experience in professional services leadership and has worked in
Software as a Service (SaaS) since 2001. To learn more, visit www.noesis.com/site.
SEPTEMBER/OCTOBER 2017 CONSTRUCTION-TODAY.COM