Are variable frequency drives the new LEDs?

LED lighting has set the standard for success in ratepayer-financed commercial and industrial (C&I) energy efficiency incentive programs over the last decade.

The technology is ubiquitous and for good reason: LEDs are relatively easy to install; the technology is effective, reliable and easily understood by customers; and they fit well into the upstream incentive model. As a result, LEDs have proliferated throughout the energy efficiency landscape as the first option to save energy and spend ratepayer dollars.

Variable frequency drives, or VFDs, are a technology that seemingly fit a similar profile to LEDs. Like LEDs, VFDs have prescriptive incentives in virtually every C&I energy efficiency program in the U.S. Like LEDs, their energy-saving ability is unquestioned, easily achieving between 30 percent and 55 percent kWh savings, depending on the application. And, like LEDs, the VFD market potential is huge. The U.S. Energy Information Agency (EIA) reports that about half of all U.S. commercial buildings were constructed before 1980, making it likely there are VFDs installed on the HVAC motors in those buildings.

So why haven’t VFDs enjoyed similar success to LEDs? First of all, VFD technology is not as well understood. VFDs work by algorithmically controlling motor speed to match the actual conditions the system is experiencing.

Typical HVAC systems are designed to handle the worst-case scenario, i.e. the hottest day of the year. And while those conditions occur only a few times each year, the system operates at full capacity whenever it’s turned on.

VFDs control the motors in the system, matching their speed to what is actually needed. This method is so effective that even a 20 percent reduction in motor speed can reduce the energy consumption of that motor by close to 50 percent. This concept, unfortunately, can be difficult for a contractor to explain to a building owner, especially when compared to LEDs that turn on with the flip of switch and shine brightly in occupied space.

In addition, building owners are not the only ones who don’t have a firm grasp on VFDs. Because LEDs have so dominated commercial energy efficiency programs over the last decade, many of the vendors most comfortable working with utilities and their rebate processes are lighting contractors.

These contractors can have a hard time identifying VFD opportunities and when they do, they often subcontract the engineering and installation work. Subcontracting means smaller margins, which make it that much less likely that lighting vendors will look for VFD applications in the first place.

Lastly, VFDs are not suited to the upstream incentive model largely responsible for the proliferation of LEDs. In this model, the utility pays the incentive directly to the lighting manufacturer or distributor, allowing the contractor to purchase the discounted LEDs without any paperwork or even contact with the utility.

Utilities can do this and still be confident that they will receive the kWh savings because LED installation is relatively simple and there is very little risk of failure once the lighting is installed. A VFD, on the other hand, requires professional startup and commissioning, without which there is no guarantee the drive will function as designed.

These challenges are not insurmountable, but a new approach is needed. Of course, financial incentives are important, but they’re not a panacea. For more engineered technologies like VFDs, enhanced support before and after the project sale is imperative. Lighting contractors need to be trained to identify VFD opportunities and given the engineering resources to make the sale and design the project. After the VFD is installed and wired to the motor and power source, a task most electricians can do, a resource knowledgeable on VFD operation is usually necessary to startup, program and commission the drive.

VFD manufacturers are in the best position to partner with utilities to provide that level of support. Not only do they have the technical expertise and resources to provide training, advise on design and offer startup and commissioning services, but they have the ability to ensure their VFDs maintain their energy-saving value into the future. Whether through aftersales service, extended warranties or spare part orders, manufacturers can remain engaged far longer than the installing contractor. Utilities can leverage this relationship to make sure that the savings they pay upfront continue to accrue into the foreseeable future.

LEDs do offer a clear blueprint for success in the energy efficiency incentive market, but utility program managers need to account for the challenges engineered technologies present to implementation. VFDs require a different set of relationships than do LEDs and the role manufacturers play in successfully integrating them into the energy efficiency incentive market is an important one.

Author: John Sheff is business development manager at Danfoss. Danfoss is a member of the MEETS Accelerator Coalition, a group of companies, utilities and regulators focused on investment in energy efficiency projects.

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