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Improving Building Energy Costs And Efficiency With Thermal Energy Storage

Commercial real estate owners and their tenants are under more pressure than ever to reduce their impact on the environment while keeping costs low. Real estate is responsible for 40% of global greenhouse gas emissions, and increasingly, shareholders are calling on companies to invest in environmental, social and corporate governance improvements.

One of the best ways for buildings and companies to meet sustainability goals is to examine their energy usage, as energy-related greenhouse gas emissions account for the majority of all pollution-related emissions, particularly the burning of fossil fuels for heating.

Pat Bain, senior account executive at Boland Trane, said that one way organizations can contribute to their sustainability goals while saving on their energy bills is by embracing thermal energy storage.


“Everyone's trying to get rid of, reduce or eliminate the use of fossil fuels,” Bain said. “Transitioning to a low-carbon future relies on all forms of energy storage. Using electricity to provide your heating can be very expensive, so people are looking at alternatives like thermal storage systems, which enable companies to decarbonize, improve grid and building resiliency, and increase their bottom line.”

Bisnow spoke with Bain to learn more about thermal energy storage, its overall benefits and how Boland can help buildings make the changes they need to become more sustainable and cost-efficient, especially with regulations pushing the need for electrification and decarbonization on the horizon.

Bisnow: What is thermal energy storage?

Bain: Thermal energy storage is a process of storing hot or cold energy for use at a later time. Most thermal energy storage systems have a large tank, storing hot or cold water, which will then be used as needed by the building. Data centers, for example, store a tremendous amount of cold water to help cool server farms when they are overheated. Other buildings have tanks filled with water that, depending on what season you’re in, will use energy to make ice and then melt that ice to provide cooling. The key here is that through thermal energy storage, you are able to disconnect when you make the ice or hot water you need to produce cooling or heating from when you actually use it.

Thermal storage acts like a battery to more intelligently generate or distribute stored energy to satisfy cooling or heating needs while lowering the impact on the grid and the environment. The thermal battery charges when the grid demand and energy costs are low or excess renewable energy is available. On the flip side, the thermal battery discharges during periods of high grid demand, low renewable production and high electricity costs. By utilizing stored energy, a company can avoid peak consumption and demand charges.

If you dig into your electric bill, you'll see that you're paying more for electricity during peak times of the day, like during the afternoon in the summer, when it's expensive for the utility company to make electricity. This demand charge could end up being up to 60% of an overall bill. Traditionally, thermal storage systems have been used to make ice at night, when energy is cheap, and then melt it for cooling in off-peak times to avoid these charges. Similarly, they can heat water during the morning hours for use throughout the day.

Bisnow: What are some of the broad benefits of using thermal energy storage?

Bain: The main benefit of thermal energy storage is flexibility. What thermal storage allows owners to do is capitalize on when cleaner, cheaper, renewable energy is abundant. When renewable energy sources aren't available, electricity is expensive or they’re burning more fossil fuels during peak consumption times, they can melt the ice made during off-peak hours and use thermal heating or thermal cooling to maximize their use of renewable energies.

The primary thing many people don’t realize about thermal energy storage is that there are two points in the Inflation Reduction Act that increase the benefits of installing these systems through both ​​tax deductions and tax credits. The IRA expanded the 48 ITC energy investment tax credit to include thermal energy storage property. The ITC can help thermal energy storage achieve a lower first cost compared to conventional chilled water plants. Additionally, the IRA expanded the 179D commercial buildings energy efficiency tax deduction to include a new direct payment option for many tax-exempt entities.

So along with all the benefits of decarbonization, electrification, use of renewable energy and decreased use of fossil fuels, there are tax benefits as well.

Bisnow: How can Boland and Trane help buildings adopt thermal energy storage?

Bain: Between Trane and Boland, we have the system expertise to help buildings incorporate the right equipment and design solutions. We've packaged the controls, equipment and systems to make them more standardized, which is more cost-effective to implement. To some, these systems may seem complicated, but they really don’t need to be. We can help owners reap the benefits of thermal energy within budget and integrate them into their existing systems to maximize performance. In addition to utility savings, we help clients navigate and maximize available grants, tax incentives and utility incentives, all with the goal of improving the bottom line.

The electrification of heating and cooling is coming, and a building that can adapt its electric consumption with the aid of renewable energy sources will lower its carbon emissions proportionally and improve its bottom line.

This article was produced in collaboration between Boland and Bisnow's Studio B. To read more of our collaborative articles, click here.

If you are interested in learning more about how thermal energy storage can benefit your building, contact us at or (240) 306-3000.


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