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Better Measurement and Verification with Verdigris – VFD retrofit at the Orchard Hotel

It’s easy to spend money on energy efficiency. Between LED lights, solar panels, smart windows, battery storage, you name it – there are billions of dollars going around. What’s harder is to verify that your investment makes financial sense. How do you know that your retrofit is delivering the promised payback? 

As we enter the second year of our installation with one of our favorite customers, the Orchard Hotel Group in San Francisco, we thought it would be a good time to look back at a key project we completed in our first year – the M&V analysis of a critical retrofit at the Orchard Hotel. 

Installing a VFD at the Orchard Hotel, San Francisco

A common retrofit for building mechanical systems is to install a variable frequency drive (VFD) for electric motors. A VFD allows operators to modulate a motor’s speed at finer increments than a legacy multi-stage drive, leading to more efficient operations and smoother starts.

As mentioned in our recent case study, Juan Bueno, the General Manager of the Orchard Hotel Group, had opted to upgrade a 2-step fan drive on his cooling tower to a VFD. As part of Verdigris’ granular energy monitoring at his two hotels, it made sense to use our high definition data to validate the results of this investment in detail. In addition to the cooling tower, the Verdigris installation captured the rest of the chiller plant for Orchard Hotel, which included a chiller, chilled/condenser water pumps, and a heat exchanger.

The retrofit was based on a quote showing a solid payback of just under 1.5 years. The vendor included an analysis stating the old 2-step drive consumed over 35,600 kWh/year, and the new VFD would bring a 3x reduction. The savings, at a stated base rate of $0.17/kWh, would be $4,100/year. However, the vendor’s job was done once the VFD was installed. It was up to Juan to prove the ROI in order to justify this investment to hotel ownership.

What is M&V?

Measurement and Verification (M&V) is an industry standard process for determining actual savings from an energy conservation measure (ECM).

Generally, it is difficult to directly compare the performance of new and old equipment at the same time under the same conditions, especially when the equipment is part of a larger system, such as cooling for the entire building. Instead, through direct measurements, one could baseline the energy use prior to the retrofit over the course of a year. This allows one to capture seasonal changes. Another year of monitoring after the retrofit would allow one to compare the performance in a more complete fashion. Finding the savings requires modeling the consumption that would have taken place the second year, had the retrofit not taken place, based on the consumption from the year prior.



Source: IPMVP 2012 Volume 1

What if I don’t have time to baseline a whole year?

Juan engaged with the Verdigris team 1 month prior to the retrofit. This presented the problem of having only 1 month to baseline a building’s performance. The challenge is that the full seasonality of building activity cannot be directly observed, such as how it reacts to weather in summer compared to winter.

Often times a linear regression model is used for predicting what consumption would have been had no retrofit taken place, based on the baselined consumption prior to the retrofit and correlated with outdoor air temperature. Linear regression, while simple, can be quite powerful as a general predictive model. To help increase the predictive ability of the model, additional features were added, such that the final model used:

  • Outdoor air dry bulb temperature
  • Outdoor air dewpoint temperature
  • Chiller energy consumption, from Verdigris sensors
  • Corresponding time of day
  • Corresponding day of week


Resulting chart comparing directly measured and modeled energy use

Comparing the results

The vendor likely performed a similar regression analysis – it's a commonly used tool in the industry. The difference is that the vendor didn't have access to the same granularity of data that the Verdigris system provides. Using whole-building data to predict the consumption of a single device is a bit like counting ears of corn if you only have a satellite picture of the cornfield. With Verdigris, we can use what's called "ground truth" circuit-level data to build better M&V models. 


Vendor Quote

Verdigris Model/Measured

Annual energy, no retrofit (kWh)



Annual energy, with retrofit (kWh)



Annual energy savings (kWh)



Annual savings ($)



Simple Payback Period (years)




Our linear regression model based on the ground truth data predicted savings of 3,921 kWh. This meant a payback period closer to 8 years, and only 16% of the quoted savings.

Where to go from here? 

The analysis of this VFD retrofit has given some mixed results. On one hand, the retrofit is slated to save approximately 56% on overall energy use for the cooling tower. That's great! This is lower than the 69% predicted savings in the quote, but not terrible. On the other hand, it is readily apparent that the quote overstated the consumption numbers of both the pre- and post-retrofit cooling tower. As such, the modeled dollar savings of $667 is only 16% that of the quoted savings, turning the once appealing 1.3 year payback to nearly 8 years.

When M&V analysis relies on whole building data to estimate savings, this introduces too many other factors to the equation, such as other equipment changes in a building, that impact the modeling effort. With Verdigris, the equipment-level energy data for the entire system (both for the cooling tower and the chiller itself), combined with multivariate statistical modeling, allows us to more confidently model system consumption. Even better, using Verdigris you can do it in less time than a traditional M&V analysis.

Prior to Verdigris, Juan didn't have the right data to verify his vendors' claims on equipment upgrades. Now, after installing Verdigris, Juan is using his granular energy data to find new project opportunities, hold his vendors accountable, and make the best decisions for his ownership group. 

See how Verdigris can help you find better ROI on your critical retrofit projects.

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