Why VRF Billing Is Different and How to Stop VRF Billing Complaints
Why VRF isn't like other loads and why that matters for your billing
VRF (or variable refrigerant flow) is an effective way to heat and cool your spaces. But all too often, VRF charges are a monthly nightmare for tenants and residential property managers.
Is there a way to stop, or at least diminish, tenant complaints about VRF charges? We've got some ideas.
Why VRF Isn't Like Other HVAC (and Shouldn't Be Billed Like Other Loads)
Without going fully into the weeds, VRF is a complex piece of tech, and its energy consumption is impacted by many factors: weather, occupancy levels, service area setpoints, demand on the compressor, performance of the compressor, etc. It takes an HVAC expert to correctly install such a complex system, and it takes an HVAC billing expert to understand how the energy apportionment/charge calculation is determined from the system's software.
Why Tenants Are Screaming and What to Do About It
Every month tenants get that second electricity charge for their VRF consumption, their tempers flare. In their view, apportioning additional electricity charges to them must be wrong.
To solve the screaming, you need to do three things:
- Define the electricity apportionment charge in a lease rider.
- Be prepared to explain to tenants how the VRF system works.
- Ensure you have the support of both your installer and your billing provider for smooth, accurate performance.
Let's review each of these solutions in more detail.
Solution #1: Set Expectations With a VRF Lease Rider
The first solution to reducing those tenant decibels is to clarify VRF requirements. We suggest you start by adding a lease rider. This rider should clarify that the tenant:
- Acknowledges that the HVAC unit in the apartment is run on electricity via a variable refrigerant system
- Acknowledges that they will receive a bill each month for proportional tenant electrical usage with respect to the VRF system to heat and/or cool their space
- Understands that the HVAC unit needs to be serviced periodically to maintain proper working condition
- Understands that energy apportionment software from the VRF system's manufacturer calculates the kWh consumption billed to each apartment associated with a specific condensing unit.
Solution #2: Train Your Team to Explain VRF
The second solution involves creating expertise on-site so you can improve verbal communication with tenants. To do this, you should have your installer and your billing company work side by side with your property managers and staff to educate them in how VRF systems work.
Why does your team need so much preparation? Because tenants are going to use ChatGPT to research this technology and think they are now experts. The on-site team needs to be able to explain how your system actually works.
Think of it this way: if you and your billing provider can't explain to tenants how the VRF charges are calculated and why the tenants' bills are correct, how are you going to recoup those costs successfully?
As an example, we regularly work with a VRF installer Berry's Cooling. Together, Berry's installation knowledge and our HVAC and lease expertise have created that essential trifecta: well-informed staff supporting powerful, low-drama occupant comfort and cost recovery.
Solution #3: Hire a Billing Provider That Actually Understands VRF
The third solution to de-escalating complaints about VRF charges is to hire a billing company with experience in HVAC and not just in electrical submetering. As we said earlier, VRF is not like other electrical charges and needs to be addressed by billing companies that understand the differences. This background is essential to ensuring that your VRF bills will be correct every month.
Here are some questions to ask prospective billers to help you evaluate their understanding of VRF:
- Can you explain how these components work together—the condenser, refrigerant piping, branch selector box, and indoor terminal units?
- How would you explain to tenants how their VRF billing charges are calculated?
- Do your billing analysts understand what a British thermal unit (BTU) is?
- Is your company monitoring VRF usage daily?
- Are your analysts educated on which utility rates can be applied to tenant VRF usage?
The biller's answers, and the speed and confidence of their responses, will be... instructive.
Key Takeaways
- Installing VRF systems properly takes experienced and eagle-eyed providers. If you’re in the tri-state area, we recommend you check out Berry’s Cooling for installation services. (If you're a long-time utiliVisor customer, you know how rare it is for us to make a vendor recommendation.)
- Billing VRF is much more complicated than billing for lights and outlets: you really have to have HVAC experience to understand the system's data and from that data allocate costs fairly. In other words, VRF billing is not the time to have the manufacturer of your electric submeters also do your billing – you need a specialist, specifically one who understands refrigeration.
- In the name of sanity preservation (and your hairline), make sure your lease terms clearly state that tenants will receive two electricity charges each month: one for lights and plug loads and another for the electricity the VRF system used to heat and cool the tenant's space. Say it early and often – “VRF is a separate monthly charge.” You won’t regret it.
You Might Like
Related articles from our blog:
About utiliVisor
Your tenant submetering and energy plant optimization services are an essential part of your operation. You deserve personalized energy insights from a team that knows buildings from the inside out, applies IoT technology and is energized by providing you with accurate data and energy optimization insights. When you need experience, expertise, and service, you need utiliVisor on your side, delivering consistent energy and cost-saving strategies to you. What more can our 45+ years of experience and historical data do for you? Call utiliVisor at 212-260-4800 or visit utilivisor.com
