No. 6 Oil: How to make boiler conversions pay

All New York City buildings, both large and small, are required to convert to cleaner fuels in compliance with Local Law 43. With a few isolated exceptions, any building located in the five boroughs that is currently burning No. 6 oil for heating and hot water will need to convert to comply. There are a number of conversion options to bring your building into compliance, but virtually all of them will involve upfront costs ranging anywhere from a few thousand dollars to hundreds of thousands of dollars. The purpose of this article is to outline a strategy that can help make your conversion offset these upfront costs - to pay for itself. The key to this strategy is to generate savings, not only from the oil to gas pricing differential (if applicable), but also from lower energy consumption as well. The savings from favorable gas pricing is baked into the process, but achieving energy savings is not. In order for your conversion to maximize its payback potential, you need to benefit from both. It is important to note that most older buildings burning No. 6 oil have oversized boilers. These boilers are oversized because older buildings originally had single pane windows and it was customary to include open windows (for fresh air) as part of the original boiler sizing calculations. With oil to gas conversions, the focus is always on the savings realized from the lower pricing of gas as compared to oil. Once the economic analysis of the pricing savings is calculated, the process usually grinds to a halt. This is especially true with multifamily conversions where the savings from the pricing differential is usually sufficient to pay for the conversion. In this scenario, the option to downsize a boiler becomes a lost opportunity - both financially and environmentally. With a No. 6 oil to No. 2 oil conversion there is no savings from a pricing differential. The only opportunity for savings is a reduction in energy consumption - you save because you consume less oil. Fortunately, boilers in older buildings using No. 6 oil are generally oversized, so resizing your boiler is a realistic energy savings opportunity - and environmentally responsible. A note of caution - determining the correct sizing of a boiler involves a complex analysis. Make sure your consultant is experienced and has a proven track record of accurate boiler sizing. George Crawford is a principal at NYG Green Partners, New York, N.Y.