IoT for Efficiency: Yardi Energy’s Cole Schoolland Sheds Light on Energy Management Strategies

By Mallory Bulman

Cole Schoolland, account executive at Yardi Energy

Energy data can tell a big story, and two measurements taken 11 years apart speak volumes. In 2005, fossil fuels accounted for 86 percent of the nation’s energy use, according to the U.S. Energy Information Administration. By 2016, that share had declined to 81 percent. The apparently modest but unmistakable change is a sure sign that energy efficiency has become a top priority for property development, renovation and operations.

Along the way, energy management solutions have proliferated, creating unprecedented opportunities for owners and managers to cut consumption. Internet-based strategies offer the promise of robust energy savings, but choosing the tools best suited to a property can be challenging. 

Among those on the front lines of this dynamic field is Cole Schoolland, a San Francisco-based account executive at Yardi Energy. He recently offered insights into the role of the Internet of Things and best practices for selecting an energy management solution.

What’s driving the growth in Internet-enabled energy information systems?

Schoolland: In simple terms, it is a huge economic opportunity. By expanding the information or data available to us, we can make more efficient decisions, and that saves time and money. That is the essence of (the Internet of Things). The advent of the internet and cheaper manufacturing for sensors and communications are allowing us to turn almost anything into a sensor that can give us information.

This is particularly relevant to the world of energy in buildings because of the scale of the opportunity. Buildings consume a lot of energy. In the U.S., nearly half of the energy consumed is used by buildings, and a lot of complicated equipment goes into it to provide all the end uses of that electricity. By gaining visibility into where it is going and what it is being used on, we can make some valuable changes to the way we operate them.

How have IoT products evolved in their ability to maximize energy savings? What kinds of features can energy information technology offer that most building management systems don’t?

Schoolland: Hardware is far cheaper and more adaptable than ever. This provides a great base from which to apply software solutions, thanks to the communications platform provided by internet connectivity.

Building automation is an excellent example. Traditional control systems (including building automation systems, building management systems and so forth) were built with microcomputers, were networked locally, and were very costly to put in place. According to the U.S. Energy Information Administration, only 10 percent of commercial buildings in the U.S. in 2012 could afford some kind of automation or control system. Today, you can go buy a Nest thermostat for $250 and put it into your house.

More modern IoT solutions, particularly when paired with web-accessible software, provide four critical new elements: (lower costs), so the technologies can be affordably installed in smaller buildings; remote access, (which) allows engineers to more efficiently manage large portfolios; trending data alerts; and applied machine learning, which allows for more automation and more alerts for specific scenarios that lead to actions, making human operators more efficient.

How is energy-saving technology becoming more accessible to those who may be hesitant to integrate new methods of energy management?

Schoolland: The only reason we are having this conversation is because providing the hardware and communications requirements for data is now affordable on a scale never before seen. This means opportunity for buildings and industries that have never had (energy-saving technology) before, such as retail. Many retailers are struggling, and the smart ones are taking advantage of new technologies like this.

Sprint’s stores, for instance, are, on average, about 3,000 square feet, (which is) very small. They made the investment in a smart-energy controller for HVAC and lighting and saw energy reductions of 14 percent across the board, recouping their investment in less than two years. Later on, they also verified that the data from this solution was able to benefit their maintenance strategy, resulting in another 10 to 20 percent savings. I’d tell (those who are hesitant) to hurry up or be left behind by your competitors.

How do energy information systems adapt to the different requirements of commercial and multifamily properties? Which systems are better suited for some properties than others?

Schoolland: It will depend on both the size and type of building you have, as well as the way the building is occupied and managed. Larger buildings, especially those with more centralized systems, are more likely to have already made a significant investment. This means the opportunity is to provide those extra benefits an existing system may not. Smaller buildings, such as retail chains or multifamily units, can purchase affordable controllers, giving them access to huge energy and operational savings they did not have before.

In the case of multifamily, where there are tenants and property managers or landlords, you have two different levels at which you need to engage. From the occupant’s point of view (be they a tenant, customer or employee), this means to provide simple and easy feedback or engagement. The landlord or property manager needs full access as an administrator for operational control.

The IoT industry offers a lot of different tools. What should one look for when seeking an energy management strategy?

Schoolland: One of the most difficult things about this sector is the sheer number of options. The industry is richly saturated with vendors offering different plug-and-play modules or point solutions to solve specific problems. Everyone’s solution will be somewhat nuanced.

Regardless of your specific situation and type of portfolio, I think there are a few things to be aware of. Look for expertise; a vendor should be able to tell you how you will be successful with their solution. If a solution is half-baked, the baked end will always be sales and marketing. Look out for solutions that feel like an investor pitch. This may mean a vendor is more concerned with their own IPO exit strategy than your long-term success. Companies offering a SaaS (Software as a Service) solution allow the vendor to provide a superior product and are often more committed to the client’s long-term success.

Look out for single-point solutions. Siloed solutions have no place in this market. No one wants to wind up with dozens of different apps. Ask if this enables your communication across business units. For instance, does your new energy management platform automatically trigger actions in your work-order management system? Look out for proprietary solutions (hardware or software products that only operate with one specific vendor). Vendors should not be able to hold clients hostage with their own data.

How can building owners and managers offset the initial cost of investing in an energy information system? What are some things they should look for to ensure that they get a return on their investment?

Schoolland: There are many ways costs can be offset, but most will come with a tradeoff. There are always folks out there willing to finance for cash now while they reap the long-term benefits of your solution. Utility incentives are often available, but know they are more trouble than they are worth. You can easily burn through your opportunity cost cutting through red tape. If you have made the capital available, you want to act and recoup your investment as soon as possible.

After some work, you should expect to see a detailed business case analysis to let you know what this investment might yield. If it sounds good, chances are that it is. In addition to the financial analysis, review the implementation plan and strategy behind the tool. Know what it costs, get the right people involved, make a plan driven with good financial analysis and execute. A good vendor will know how to shepherd you through this process.          

Originally appearing in the CPE-MHN Guide to 2018.