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VRF vs. District Energy: The Best Way to Heat and Cool Your Facility

Modern commercial building managers and landlords have more to consider than ever when it comes to selecting an HVAC solution for their facilities. While energy efficiency, reliability, and cost-effectiveness are still of major importance, factors like sustainability and maximizing circulation due to health concerns are critical considerations as well. In order to stay competitive and attract desirable tenants, facility owners and managers need to look at the full picture when choosing a temperature control solution for their properties.

Two of the most often-considered solutions for building space heating and cooling are Variable Refrigerant Flow (VRF) and district energy. They both offer unique strengths and risks, and a careful analysis of both is necessary to make the smartest decision for your specific situation.

Variable Refrigerant Flow (VRF) Systems

VRF is a refrigerant based heating and cooling system that utilizes a central outdoor condenser to feed multiple indoor evaporators. There are two main reasons a developer might choose to go with a VRF system: zoning controls and ductwork. VRF allows for more precise zoning controls, meaning if you need to heat or cool rooms to drastically different temperatures, VRF might be a good choice. Because VRF uses a central outdoor condenser, it also means there is less indoor equipment needed, such as utilizing separate window AC units for every room. This also keeps things quieter indoors.

There are several considerations to keep in mind about VRF systems, however:

  • Capital costs: VRF systems require upfront capital costs to install. Additionally, the average life of a compressor is about 10-15 years, and they range in costs from $5k to $15k in commercial buildings. This means that every 10-15 years, you’ll need to invest more capital to replace multiple compressors.
  • Maintenance: VRF systems consist of multiple complex pieces of equipment which require qualified HVAC mechanics to repair and maintain. This means either keeping HVAC technicians on staff or hiring a vendor each time maintenance or repairs are required.
  • Electricity reliance: VRF systems require electricity to run, which exposes buildings to multiple risks:
    • Buildings are at the mercy of sometimes volatile electricity rates and policy changes that may drive those rates up in the future.
    • Many buildings are billed based on peak electricity usage rates – essentially usage during the hottest and coldest days of the year. VRF can drive up peak demand (and costs) dramatically.
    • In the event of a loss of electricity, such as during a storm, the building would lose heating and cooling as well, which is dangerous to occupants, especially in very warm or cold climates, and could damage equipment and assets in the building.
  • Safety hazards: VRF systems require onsite use of potentially toxic refrigerants, which poses a safety risk to occupants of the building.
  • Space demand: VRF systems are normally housed on rooftops, which precludes that space from being used for building amenities, such as lounges, gardens, or rooftop pools. Additionally, there is a misconception that VRF systems do not require ductwork. Ductwork is certainly required to ensure safe air cycling in a building, especially as a result of COVID-inspired code changes to keep building occupants safe.
  • Reduced structural/building envelope integrity: VRF systems require roof penetration, which exposes the building to potential leaks or other structural issues.

District Energy

District energy is a form of energy delivery in which steam and/or chilled water are generated at a central facility and then distributed through a network of underground pipes to buildings, rather than those buildings using onsite boilers or chillers that use fossil fuels. Entirely different from VRF technology, district energy has its own set of considerations when planning for your building’s heating and cooling needs.

There are several attributes to district energy that are worth considering:

  • Reliability: District systems are a great source of reliable energy, whether heating or cooling. The robust underground steel-encased pipes of a district network are reliable even in severe weather, and district energy systems maintain 99.99% uptime. Additionally, because its central facilities are fueled by multiple sources and have bult-in redundancies, reliable district energy cooling and heating is available even in the event of electrical losses. This is critical for the wellbeing of occupants and the protection of sensitive assets and equipment, especially for mission-critical facilities like hospitals, public safety facilities or laboratories.
  • No upfront capital costs: Because district energy does not require cooling or heating equipment onsite, there are typically no upfront costs associated with connecting to a district energy system – unlike the high upfront capital costs required for boilers, chillers, and cooling towers. Many district energy providers are even willing to invest in connecting a building to the district system and will cover the cost of any street repairs and beautification that comes up along the way. Often, existing ductwork in a commercial building can be retrofitted to accommodate district energy.
  • Scalability: District energy can be introduced gradually, if desired. Floors or areas of a building can be added one at a time. It is also possible to submeter for tenants, contrary to common misconception.
  • No rooftop penetration/space demand: District energy does not require rooftop chillers or compressors, freeing up rooftop space for amenities, a solar array, or other storage or equipment needs. This also means no rooftop penetration, which can reduce risk of damage due to a compromised building envelope.
  • Energy savings: Because district energy does not rely on electricity, building peak usage would be much lower than with VRF or installing electric units. That means that variable loads for heating or cooling would be drastically reduced, creating a flat load profile with lower demand charges.
  • Environmental (and financial) benefits: The reduced electricity demand would make a building eligible for more rebates and tax incentives. In some cases, the U.S. Green Building Council also assigns more LEED points to buildings that use district energy.

To summarize, it’s important to consider your reliability needs, ability to make an upfront capital investment, long-term maintenance needs, and sustainability/incentive goals when selecting the right HVAC system for your commercial building space. If you’re looking for some inspiration, click here to check out how other facilities are approaching their heating and cooling needs, from museums, to hospitals, to laboratories, and beyond.