Geothermal Heat Pump

Payback time: Eight to 12 years

For sites with space to dig underground, geothermal heat pumps are quickly gaining popularity as an efficient way to dramatically lower both heating and cooling costs–while reducing the building's dependence on fossil fuels. These underground pumps use the thermal properties of the soil to either heat or cool a building. Here's how the system works: A series of pipes, often called a "loop," are buried in the ground next to the building. These pipes circulate a fluid that absorbs heat from–or relinquishes heat to–the surrounding soil. The geothermal pump then removes the heat and transfers it to the building. (The process is reversed for cooling.) This system can also be used to provide hot water.

Such a system can reduce cooling costs by up to 40 percent and heating costs by up to 70 percent, estimates architect Ross-Bain. Be prepared, however, to pay a hefty price tag for these heat pumps. "A geothermal system is an extremely efficient way to heat/cool a space, but it can cost twice as much as a typical air conditioning system," says Ross-Bain.

While a geothermal system is typically found in suburban and rural areas because of space requirements, urban applications are possible. You'll soon find such a system at Washington Park, the redevelopment of a YMCA into a 63-unit residential project in Chicago. "I believe we are the only non-government urban development that has used this system," says Wyllys Mann, a project manager for Chicago-based East Lake Management & Development Corp. The developer is adding the system beneath a large parking lot that was already on the site. The system (including the costs of repaving the lot) cost about $440,000, but the developer secured a grant from the Illinois Clean Energy Community Foundation to cover one-third of the price and reduce the payback time by three to four years.

Photovoltaic Panels

Payback time: 10-plus years
SOLAR POWER: Thanks to a large grant from a local utility company, Gold Dust Apartments in Missoula, Mont., installed a 15-kilowatt photovoltaic array, which

SOLAR POWER: Thanks to a large grant from a local utility company, Gold Dust Apartments in Missoula, Mont., installed a 15-kilowatt photovoltaic array, which

Credit: Courtesy homeWORD

While many green strategies are making more and more financial sense for multifamily application, there are still a few items with a significantly high payback time. What's at the top of this list? Photovoltaic panels. These panels, typically mounted on the roof of a building, consist of photovoltaic cells made of semi-conducting materials to directly convert sunlight into electricity.

Photovoltaics range anywhere from $6.50 per watt to $8 per watt to install (and keep in mind it takes about 2,000 watts to supply an average sized single-family home with half of its energy supply). "Photovoltaics don't seem to work at all right now, unless somebody is willing to grant you the money to pay for it," says Hord of Hord Coplan Macht. "Every time I have looked into it, it's an unbelievably long payback."

Industry experts do expect prices to eventually drop, especially as other countries aggressively pursue solar systems as a sustainable development strategy. "With the Chinese looking to dramatically expand their use of photovoltaics, I think what we're going to see is that the prices for these systems are going to drop significantly in the next couple of years," predicts Lewis of SmithLewis Architecture. He also hopes to see increased governmental incentives, such as those currently offered in Germany, in the United States to offset the high costs of solar systems.

For multifamily firms interested in photovoltaics (but not the cost), utility companies represent one of the best places to find grants to supplement the high price tags, advises Betsy Hands, program manager for homeWORD, a nonprofit affordable housing developer based in Missoula, Mont. The company was able to secure a $120,000 grant from Northwestern Energy, its local utility company, to cover the entire cost of a photovoltaic system for one of its properties. Today, Gold Dust Apartments boasts a 15-kilowatt photovoltaic array which produces about 25 percent to 50 percent of the total power needed for the apartment units. Based on today's utility costs, the system saves the building about $1,900 per year in energy costs, which would have translated into an extremely long payback for the developer had it not obtained the Northwestern Energy grant.

For developers determined to take advantage of the sun, solar/thermal hot water systems are a more cost-effective option. These systems use the sun to heat a building's water supply. At Washington Park, such a product cost about $15,000 more than a typical system and is projected to save up to $2,500 a year, according to Mann, the project manager.