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Thread: The cost of efficiency

  1. #1

    Default The cost of efficiency

    Some context...I buy and renovate houses in the urban northeast. While their condition at purchase ranges from okay to not so hot, they are usually structurally sound. That said, they almost never have adequate insulation...if they have any at all...and building envelops offer little in the way of a thermal barrier. Of considerable importance is the fact that apartments in these houses often rent to Section 8 tenants.

    As a landlord I can opt to pay utilities or have the tenant pay, the difference being the amount of rent money I receive from the local housing authority (more if I pay). In either case, the amount of money earmarked for utilities is not sufficient to cover today's wildly inflated gas and electric costs. Now, to the heart of the matter.

    I am in the midst of rehabbing a three family house in Newark, NJ. It needs a completely new heating system...actually three systems...and I have opted to go with direct vent, gas-fired boilers feeding hot water baseboard registers, one boiler for each floor. Hot water will be provided by three, 199k btu, tankless water heaters. My goal is to make this house as green and as energy efficient as possible, while being mindful of a tight budget, in order to reduce utility costs. The reason is that even though the rent might be paid by the housing authority, astronomical heating bills will make the house unaffordable for the tenant or a losing proposition for me, depending upon who is paying the utility costs. So, here is what I am wrestling with: given the fact that it is economically unfeasible to seal and insulate the entire building envelope is there a benefit to paying the premium for high efficiency boilers (90% or greater) or would I be better off with lower efficiency (low 80s) while investing the price difference in more insulation (but still not the whole building)?

    In advance, thank you for any guidance you can provide. The efficiency of heating systems in affordable housing is an issue that will take on increasingly more importance as time goes on.

    Brian McCabe

  2. #2
    Moderator & Master Plumber hj's Avatar
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    Aug 2004
    Cave Creek, Arizona

    Default heating

    I think your question is like asking the condemned man if he wants to be shot or hanged. Without adequate insulation, either way will be inefficient and I doubt that a 10% increase in boiler efficiency will be enough to compensate for the extreme heat loss of the structure. In addition, windows and doors usually contribute the most to the heat loss, so improving them will sometimes be more advisable.

  3. #3
    In the Trades Gary Swart's Avatar
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    Sep 2004
    Yakima WA


    IMHO, insulation is one thing that actually will pay for itself. Granted it will require some additional expense to do the job in this case, but it will be worth it. I don't know if you were considering insulation as a DIY job, but in my experience, I find insulations companies will furnish and install insulation for about the same price as I can buy just the materials. Not only that, but insulating is a nasty job for a DIYer.

  4. #4
    In the Trades Bob NH's Avatar
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    Oct 2005
    New Hampshire


    The utility bills (fuel and electricity) should be paid by the person whose finger is on the thermostat or light switch. If someone else is paying the bill they don't turn off lights or turn down the heat.

    There will probably be government programs for paying energy costs that the owner may not be eligible to receive.

    Insulation and energy saving should be based on balancing capital and energy costs as you would do it for yourself.

  5. #5


    I would go with the higher efficiency equipment especially if its gas fired boilers. I installed a new boiler in my poorly insulated house and saw a huge difference a 75%-80% reduction in heating costs. Its now tough to justify spending the money and adding more insulation even if I only have an inch of fiberglass in the walls.

    A gas fired boiler will modulate giving you much better performance on warmer days where the insulation comes less and less in to play. On a warm (40 degree) day insluation is not going to have a huge effect on your heating load. Being able to fire at 20% of rated capicity will have a large effect by not short cycling on your operating efficiency.

    I also think its easier to add new windows or inslaution on a peice by peice basis after the fact. Installying a new heating plant is a large and costly undertaking. Adding a new window or two is a half day $500 project. Same goes for blowing in more insulation after the fact.


  6. #6


    Quote Originally Posted by hj View Post
    I doubt that a 10% increase in boiler efficiency
    The real increase in efficiency is a lot more then 10 percent. Standard boilers (non condensing) are rated in way that they will never operate in field with a 65 degree drop in temp. Thier actuall seasonal efficiencies are far lower then thated usually between 50%-70%. Because condensing boiler have the ability to modulate and put out only as much hear as is needed they actually can operate at 95% seasonal efficiency.

  7. #7

    Default Many thanks

    I've posted here a couple of times and I have always gotten good advice. My inclination was to move ahead in the direction of greater efficiency but I am amazed at your statement regarding the reduction in energy costs. Is that real? What would account for such a high figure?


  8. #8



    The old boiler was over sized for starters so thats no good. However it did leave me with extra baseboard which was good allowing me to run lower water temps at higher efficiencies. Gas is also way cheaper then oil per BTU so that factors in.

    My best analogy to standard equipment is this. Imagine your V8 powered truck with out a gas pedal or transmission youi turn on the truck the motor goes instantly to peak power at 5000 RPM and stays there. The only way you had to regulate your speed is by turning off the engine to coast and using your brakes. Its going to be reasonably efficient at full load towing a trailer up a hill. How is it going to be when you need to go 25mph through stop and go traffic lights ?

    A modulating boiler has the ability to throttle and only generate as much heat as is needed so your seasonal efficiency goes way way up


  9. #9
    Master Plumber master plumber mark's Avatar
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    Feb 2005
    indianapolis indiana - land of the free, home of the brave....
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    Talking a rental unit with Tankless ???

    I dont know if I read this right...

    you are thinking of putting tankless boilers into
    government housing to supply the heat as one of your options????

    was that correct??? or is only the hot water being provided by
    the tankless heaters....

    Which Either way......
    That would be like putting a plasma TV on the wall of an outhouse..

    Wouldent it be wiser to just put in a normal gas hot water heater and
    then take the HUGE saveings and insulate the place as tight as possible

    I realise with government houseing you will still get
    your occasioinal broken windows and bullet holes to patchup.......

    but still you would be very wise to spend the money on insulation
    becasue it will certainly pay for itself in no time....

    a normal heater is much wiser in a rental home any day over a tankless....

    the simpler you make things the better off you will be with
    future call backs and other maintaince issues. especially with the tankless

  10. #10
    Master Plumber Redwood's Avatar
    Join Date
    Dec 2007


    One thing to consider is if you leave paying for the heat to your welfare tennants you may be setting yourself up for huge damage costs of freeze up when they fail to pay for heat and are shut off!

    Some people have different budget priorities.


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