If you haven’t noticed, the price of water is going up. Often overlooked in favor of its more costly cousin electricity, water usage in buildings is quickly becoming a major expense. With electricity conservation stealing the show and garnering most of the capital expenditure for building improvements, water systems investments have few options for quick savings. Soon, though, improving water conservation will be just as important as electricity.
Average water prices and sewer bills in 50 major American cities are rising. In 12 of the biggest U.S. cities, the price of water and sewage increased by an average of 80 percent between 2010 and 2018, according to an analysis by The Guardian. For now, the problem is relatively nascent. Water is still cheap, much cheaper than electricity, but regardless of how relatively expensive water is, it can still eat away at a building’s NOI, hurting valuations.
Office buildings account for 9 percent of total water use in the United States, according to the EPA. Restrooms, heating & cooling, and landscaping use the vast majority of the water following through office buildings. Fixtures are getting better every year. Toilets used to flush 2.5 gallons every pull, now high-efficiency toilets use less than 1 gallon. More efficient fixtures are key to using less water, but using less water isn’t the only way to lower your water bill.
Expansive savings
“Having written thousands of checks to city water departments, I was surprised and embarrassed to learn about this,” SmartWaterValve President Tim Crockett said. For years Crockett has worked in the commercial real estate sector, working in investments and corporate occupancy. His current endeavor is aimed at reducing all building’s water bills.
Water billing is volumetric but not everything in water isn’t actually water. There’s plenty of gases in water, like the oxygen fish use to breathe. In volumetric billing, you’re paying for all that gas in the water, not just the water itself, because the water meters read it all as additional volume. Once water is used, its pressure typically drops. Water is delivered at 65 psi, so opening a fixture in the building causes a drop in water pressure, expanding the air present and causing flow surges, both of which read as the increased volume at the meter. That means building owners pay for more water than they receive.
When installed on the downstream side of the water meter, the valve reduces pressure drop across the meter by creating a core of pressurized water keeping gas dissolved, thereby limiting its volume as the water passes through the meter with gases still compressed. The variable resistance of the valve acts as a shock absorber, maintaining even flow profiles despite usage by eliminating pressure drops and surges at the meter. In layman’s terms, the valve keeps bubbles out of the water so you’re not paying extra for them.
The device is based on Boyle’s Law, a scientific principle stating that a gas’s pressure and volume are inversely proportional. When you squeeze a balloon, the volume occupied by the air inside decreases, accompanied by an increase in pressure exerted by the air of the balloon. Boyle’s Law is why scuba divers must ascend slowly. If divers ascend too rapidly, the decreasing pressure can cause the air inside their bodies to expand too quickly resulting in decompression sickness, a life-threatening condition commonly referred to as the bends. Applied to water in pipes, when pressure decreases at the meter, the air inside the pipe expands, thereby raising water bills based on volumetric meters.
The variable spring-loaded plunger maintains a constant pressure on the incoming water supply directly adjacent to the meter, allowing the water to pass through in a compressed state, soon after returning to its original uncompressed state. The valve isn’t removing the air or compressing it, it’s simply preventing it from expanding. Water billing is dependent on many factors making generalizations difficult, but case studies verified by the Texas A&M Engineering Experiment Station have shown a 22 percent reduction in water and sewer expenses with SmartWaterValve, saving roughly 20 percent on water bills with payback typically in 3 months to 2 years depending on volume.
“We’ve spent decades focused on reducing electricity, there’s a lot more money in reducing electricity because it costs more and there’s a lot of energy conservation methods available in that market,” Crockett explained. “Plus most property owners and managers are not aware this is even a problem.”
Most conservation valves that actually save water are pressure reduction valves, lowering pressure to lower overall flow rates. Less water flows with less pressure. Pressure reduction valves can also help protect plumbing equipment and fixtures. In commercial buildings that are often multiple stories, pressure reduction valves help to regulate water pressure across floors. Without a rooftop reservoir, pressure is lower on higher floors. With a rooftop reservoir, pressure is higher on lower floors. Pressure reduction valves can both help maintain constant pressure across a building’s water system.
It makes WaterSense
The EPA developed WaterSense standards to guide purchasing decisions aimed at water use reduction. WaterSense labeled fixtures are independently certified to be at least 20 percent more water-efficient than standard models. The EPA also has WaterSense labeled irrigation systems that cut down on loss from evaporation, wind, and runoff. Heating and cooling systems need to be monitored for mineral buildup to maximize the number of times water can be recycled through the system.
“High-cost low-quality water is a national issue … the federal government is clearly not playing the role it needs to play,” Howard Neukrug, director of the water center at the University of Pennsylvania and former head of Philadelphia’s water department told The Guardian. “The bottom line is that assuming there’s no federal helicopter with $1 trillion, rates are going to go up dramatically to pay for infrastructure and quality issues.”
Buying land to dig lakes, building pumps, water treatment facilities, water pipes, sewer pipes, and maintaining the system is an enormous cost for municipal governments that’s only increasing. After rising faster than ever before for a decade, prices are expected to get even steeper as major American metros deal with shortages and growing populations.
Saving water isn’t just about saving money. Conservation efforts for sustainability goals and cost savings are important, but in context, buildings are spending a fortune on water. Water conservations’ value proposition revolves around capitalizing net operating income. If a building has a 5 percent cap rate, cutting $1 worth of cost increases the value of the asset by $20. Saving $1,000 a month on a building’s water bill can increase the value of the assets by $240,000 at a 5 percent cap rate, Crockett explained.
Water conservation efforts may not ever get the attention they deserve until it’s too late. As important as it is to reduce energy consumption in buildings, it’s equally important to think about water use reduction. Water conservation efforts are years, perhaps decades, behind similar efforts for electricity. Most office and institutional buildings don’t even submeter water usage. A wave of rising water prices will soon force the issue.
