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Article - July 2000
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This new commercial building comfort industry will market to tenants, and products will be installed by office furnishing installers, not building trades.

Thomas Hartman, P.E.


In January I wrote about the challenges and opportunities facing the HVAC industry, and particularly those whose businesses and careers are now focused on new technologies and controls.  That article was intended to kick off the new millennium with a preview of the enormous change I believe is in store for our industry, and I urged us all to reassess our goals to ensure we are positioned to meet this challenging future. Following the article, a number of readers posted messages to our web site asking for greater discussion and more information about the nature of these envisioned changes. Some asked how such rapid change can take place in an industry that has been largely isolated from the turbulence of the current technological revolution. This article expands that earlier discussion and outlines the forces driving change as well as the nature of the changes themselves. It concludes with some thoughts about how to benefit from this changing industry landscape.

A GROWING INDUSTRY PROBLEM

Most who are active in the HVAC industry know there are many long-standing problems. For engineers, the complaint list usually starts with low fees, increasingly complex regulatory and compliance requirements, and accelerated project schedules. For contractors, increasingly complex projects on tighter schedules and greater pressure on costs are large issues. Manufacturers find themselves constrained by a lack of understanding about their increasingly technology intensive products. Meanwhile, developers are experiencing a much more competitive environment from large corporate entities with huge financial resources who may soon dominate the market.

However, a much greater problem affecting the entire industry is looming over us all. This is a growing problem that stems from what I believe is a lack of proper focus in our industry. To illustrate this issue, consider Figure 1 which shows the elements of a typical HVAC system which might be employed in a commercial building. Fans, pumps, refrigeration, towers, boilers, piping, air ducts, dampers, valves and controls are the central elements of most HVAC systems whether or not they are configured just as shown in Figure 1.

Figure 1: Elements of a Typical HVAC project

When I present Figure 1 to Engineers and Contractors, most can tell me rules they employ for sizing and selecting chillers, boilers, air systems, and piping. Few, however, can recall the basic rules about the influence of humidity, air movement or radiant energy on occupant comfort. Furthermore, as shown in Figure 1, typical HVAC system designs tend to isolate the occupant from the HVAC system, with no direct link between the occupant and the system. So, while the purpose of an HVAC system is to keep building occupants comfortable, the overwhelming focus of the industry has and continues to be on the equipment rather than this crucial end use. The difference between the HVAC industry purpose and its focus is highlighted in Figure 2.

Figure 2: Purpose and Focus for a Typical HVAC Project

As shown in Figure 2, the purpose of all the equipment employed in HVAC systems is to maintain comfort and adequate ventilation for the people that occupy commercial buildings. But comfort or environmental quality for individual occupants is usually not a significant factor in the design of most HVAC systems. Occupants generally have no direct control over their thermal environment. Indeed, most do not even have a temperature sensor or thermostat near them. Many engineers consider that comfort and ventilation will be suitable so long as a minimum outside airflow is maintained into the building and a balance of heat flows is maintained in each zone. But zones often contain 600 or more square feet, multiple offices, and a number of occupants. Thermal variances within each zone, radiant effects, air movement and distribution, individual occupant preferences, and all the other factors that influence the perception of comfort and environmental quality are almost never directly considered in an HVAC design. The concept that the occupant should have some control over the thermal state of a workspace is ridiculed by some engineers.

DRIVERS FOR CHANGE

In recent years, the development of low cost sensing and processing capabilities has permitted the design of comfort systems that can do a much better job of monitoring and controlling space conditions throughout buildings. These technologies also permit occupant adjustments that do not disrupt the HVAC system. However, such technology enhancements have not been widely employed in products and are rarely sought out for system designs. Many engineers continue to declare that they are not necessary. If a system is properly designed, it is often argued, the building will be comfortable and the occupant will require no direct control. Other engineers argue that such features will be too complicated for operations staff to support. Such arguments may have been true long ago when comfort standards were much more flexible and controls were not, but in the era of the "knowledge worker" and digital controls, these arguments have become far less persuasive.

Whatever arguments are made concerning the adequacy of our present HVAC designs, they lose strength very quickly when the occupants are consulted. For decades, surveys of building occupants have shown their biggest complaint about their workplace is the lack of a comfortable thermal environment. More recent surveys of office building occupants confirm that this long-standing complaint is unchanging. A recent BOMA survey shows occupants consider the two most important elements in a workspace to be thermal comfort and air quality. The same survey shows that lack of occupant control and lack of adequate comfort constitute the two largest complaints occupants have about their buildings. Thus HVAC systems rate at the top in both value and need for improvement by building occupants!

To try to understand why these long-standing occupant desires for improvement have not been heeded as enabling technologies have advanced, my firm cosponsored and participated in a survey of attendees to the 1997 BOMA conference and show in Minneapolis. We were interested to see if building owners and operators were impeding the implementation of better comfort systems in their buildings. The results of this survey is shown in Figure 3.

Figure 3: Survey of Building Owners and Managers

As illustrated in Figure 3, we discovered that comfort ranks first in importance on building owners' as well as the occupants' wish list. So the HVAC industry cannot reasonably blame developers and building Owners for the failure to implement more comfortable systems. It looks increasingly, as the old saying goes, "We've seen the enemy and it is us!" While it is probably true that buildings are more comfortable than they were decades ago, it is clear that the industry is not meeting the rising expectations of building occupants for comfort and control.

INDUSTRY IMPEDIMENTS TO BETTER COMFORT

Reliable Controls So, if technology enables more comfortable buildings, and occupants and building owners both want them, why aren't they being designed and built? The reason is that the building construction industry has institutional impediments to the type of change required to make systems more comfortable. The following is my list of the primary impediments to delivering a satisfactory HVAC end product in the building construction industry:

  1. Innovation is Discouraged: The HVAC industry is one of the few technology focused industries in which innovation in product design is discouraged. If a manufacturer develops a new product with advanced features that significantly separates it from others, that manufacturer knows that a substantial portion of market will be closed to this product because designers are trained to specify only those components for an HVAC system that have equals such that any one of multiple products (usually at least three) can be applied. Designers are loath to specify products without equals. When the subcontractor goes with his/her shopping list to get pricing for the hundreds or thousands of different products that need to be purchased for the HVAC system, there is no time for negotiation on any but perhaps several major components. If a distributor sees that its product has no equals, the price will usually be higher; a natural and expected market phenomenon. So, because the number of products required in a typical HVAC system is large, and because current construction procedures do not provide designers with the capacity to negotiate and enforce pricing to the contractor, the practice of specifying equals to achieve price competition endures and continues to stifle innovation on technology based products.

  2. Pressure on First Costs: This item is not new to anyone in the building construction industry. Many designers have had projects whose original criteria focused on improved controls, smaller zones, better glazing, or other comfort enhancing features only to see those priorities lowered and sometimes vanish altogether as final budgets are developed. This can be a discouraging process for a conscientious designer, especially when one or more key elements are cut from a carefully designed system such that the function of the remaining components may be compromised. But such things happen with surprising frequency and they discourage the industry from applying more focus on comfort even when it requires only a very small cost premium.

  3. Operations Support Issues: The HVAC industry has never built strong bridges between designers or product manufacturers and buildings operations staff. We hear all too often the common rejoinder, "The operator will reduce any system to his/her level of understanding." This is true of all systems in all industries, and it should challenge designers and product manufacturers to put more emphasis on operational support issues. But in this industry it is more often used as an excuse not to work harder to achieve more effective systems, particularly at the zone (comfort) level.

  4. Lack of Integration: Because this industry continues with the outdated tradition of considering controls separate from hardware elements, zone products lose function due to the lack of integration of hardware and controls. Control companies develop generic terminal unit controllers whose flexibility is used in being able to adjust to any one of a number of different terminal unit types. Terminal unit hardware manufacturers build simple devices to which any controller can be adopted. Comfort enhancing features such as integrated occupancy control, use of radiant or air movement to adjust the perception of the thermal environment, or individual occupant control would normally be easily and inexpensively implemented in a zone system, but terminal hardware is crude and terminal controller program capacity is aimed at hardware adaptability. Thus the cost of each terminal unit with separate controls and hardware is high and function is low. This lack of controls integration is one of the most substantial impediments to improved occupant comfort.

  5. Lack of Imagination: Perhaps the greatest impediment of all is the profound lack of vision by the HVAC industry as a whole. Engineers, manufacturers, contractors, developers and building operators all seem to understand the issue of comfort, but very few will admit they could do a better job of providing comfortable environments. In this "show me the money" industry, only a few see value in working to provide better comfort solutions while a majority seem willing to blame the occupants themselves for being "complainers."

NEW IMPLEMENTATION PATHS FOR COMFORT ENHANCING SYSTEMS

To remove these impediments would require restructuring the building construction process, an unlikely course of action in the short term. However, as building owners and tenants alike begin to view occupants as "profit centers," change is being forced onto our industry. Change will occur and it will likely occur very differently than most in the industry anticipate. Consider that individual comfort devices are now being developed that can be employed with underfloor or ceiling air supply systems, or can be incorporated into the workstation itself. Research conducted by our firm has shown that recently developed enabling technologies can be implemented into low cost terminal comfort devices that allow occupants seated adjacent to one another in open office areas to perceive a difference in thermal comfort of 2oF to 3oF. Furthermore the computing power installed in these devices permits the accounting required to provide individualized comfort billing just as the phone company now provides monthly bills for each office phone. These technologies show great promise. It is reasonable to envision that truly effective personal comfort devices can soon be connected to standard HVAC systems. Our firm is now working with forward looking manufacturers to make this a reality.

Now let us consider that such products are available, but because each employs specially developed, integrated features designed for particular applications, the market does not offer equals. The cost of each device depends on the application focus for the device which is likely to vary from those intended for executives with large individual offices, to those for densely populated open office areas.

The thought that such products could be implemented in a building intended for multiple tenants through a change in the building construction process is not likely for several reasons. First, because there are no equals, the specifier would lose the ability to control the cost for which these products were purchased. Second, because building owners often have little idea about how the space in a new building will be utilized, which types and how many of each type will be required for the tenants is not known when most buildings are built.

Instead, it is becoming increasingly clear that the building's tenants and not the building owner should determine which types of comfort systems to employ in offices. This is an important consideration because if a mechanism can be developed to market the end use comfort systems directly to the tenants, many of the impediments listed above need not apply. Consider that employers normally spend $8,000 to $12,000 per employee on workspace fixtures and equipment to enable each employee to perform his or her tasks effectively. In this context, the cost of a personal comfort device does not seem large when one considers that comfort is regarded as the most important aspect of a workspace and constitutes the largest failure of workplaces today. Marketing directly to tenants permits value issues to be weighed by employers who will directly benefit by the investment in improved comfort of their employees. Marketing directly to tenants also eliminates the need for equals among products as tenants will appreciate differentiating features and have the ability to negotiate for products best suited for their particular work environment.

A COMFORT INDUSTRY AS A NEW PARADIGM

Marketing end use terminal comfort components more or less independently of an HVAC system will not be difficult because as shown in Figure 1, HVAC systems are typically quite disconnected from the distribution system at each occupant's workspace. Furthermore, building projects have increasingly moved the purchase and installation of terminal distribution equipment to the tenant build-outs. Often a credit is applied and the tenant is required to adhere to certain building standards in so far as the selection of equipment and layout is concerned. Such a procedure that offers tenants choice in individual comfort terminal systems would be easily applied to this increasingly popular means of building construction.

The ease of implementing individual terminal control is further reinforced by Figure 4 in which an individually controllable terminal comfort device has replaced a standard diffuser at the workstation. Such a personal comfort device could be ceiling mounted as shown, workstation based, or could be part of an underfloor distribution system. Functional individually controllable terminal comfort devices are becoming available for nearly any type of delivery system.

Regardless of the type of end comfort device chosen, Figure 4 shows that the most important network connection for such end use devices is not the building control network, but a network that permits occupants to request comfort adjustments from their PCs and enables the exchange of data necessary to provide a record of the activity for end use accounting and/or billing purposes. With the growing communication standards available today, it is not difficult to connect the two networks together and achieve certain optimization functions, but it is also possible to make the individual comfort products completely independent of the existing HVAC system so that such a comfort system network could be implemented in an older building lacking a modern building system network.

Figure 4: Building Control And Comfort Control Networks

To be cost effective for a building tenant, such an integrated, individually controllable terminal comfort product must enhance employee performance by about one quarter of one percent, or reduce sick leave by about 1/2 day per year per employee. Either of these outcomes will make the investment in an enhanced, individually controllable comfort device for each workspace worthwhile for an employer. Studies that try to quantify such relationships show performance gains generally in a range of 5% to 15% for individual comfort systems AND sick leave reductions of several days a year per employee. Therefore, while hard numbers for the effects of enhanced comfort and individual control on workplace economics will always be difficult to ascertain, a picture is already emerging that implementing such features is a wise investment for employers!

HOW BIG A POTENTIAL IS THE COMFORT INDUSTRY

As noted earlier, recent BOMA surveys have found that comfort and individual control of comfort are the two largest complaints building occupants have about their work places. Integrated technologies that permit micro climates at each workstation through the use of radiant thermal exchange and local air movement patterns have been developed and are ready for implementation into more functional individual control products. Such products will provide exactly what occupants desire: an immediate and noticeable (but not excessive) response to requests for thermal changes. Our firm estimates that there are about fifty million conventional workspaces in North America for which terminal units with individual comfort controls could be applied without requiring any modifications to the remainder of the building system. This represents an immediate market of more than $50 billion. We estimate that as the focus of HVAC design properly shifts to comfort, this element of the building construction industry will attain a size comparable to that of the entire HVAC industry today!

A LOOK TO THE FUTURE

So, the future I see for our industry is not an evolutionary change in the way buildings are designed and constructed to make them more occupant friendly, but the development of a parallel "comfort" industry that is network based and will appear more like the PC and peripherals industry than the building construction industry. This new commercial building comfort industry will market to tenants, and products will be installed by office furnishing installers, not building trades. Those who have the most potential to benefit from this new industry are manufacturers who are bold enough to build products that integrate state of the art controls with terminal hardware in a single package that is designed to capture the economies of high volume production. Designers and system integrators can also capture value by applying this new breed of products effectively and integrating them into functional control and accounting networks.

SUMMARY

The lack of focus in our industry on occupant comfort issues has created an enormous gap between terminal systems that are being installed in buildings today, and those that could be installed to enhance comfort and provide the individual control features building occupants want. This gap has created an enormous opportunity that is unlikely to be captured by working within current building construction processes and procedures. Those who wish to participate in capturing this value must be willing to work to develop alternative implementation paths that include direct or indirect sales to building tenants, and the development of comfort systems and networks that can operate relatively independently of building HVAC systems. Enabling procedures and technologies have already been developed. The market is ready. Are we?

Additional information on individual comfort and control technologies developed by The Hartman Company and technologies discussed in this article is available at www.hartmanco.com. Comments and questions about the article may be addressed to Mr. Hartman at tomh@hartmanco.com. 


More about Tom; 

Tom Hartman is an internationally recognized expert in the field of advanced high-performance building operation strategies.

 A year ago this July Tom wrote us an article Network Control: A New Paradigm for HVAC 
and then in January 2000 provided us with HVAC Control: An Essay on Change

A Press Release from Tom

Ultra High Efficiency "LOOP" Chiller Plant Technology Now Available to Owners, Designers and Contractors


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