Helping Tenants Stay Cool and Lowering Energy Use with Heat Pumps

Denver's summers are getting hotter. Eyal's tenants were feeling the heat.

Eyal Tzarfati is the owner and property manager for a four-unit apartment building in Denver's Park Hill neighborhood. After 2024 - the second hottest summer on record in the city - he couldn't let his tenants go another summer without cooling. So he started looking for options for installing air conditioners.

Eyal got an email from the city about heat pumps. He learned they could provide highly efficient heating and cooling for the apartment units and are a more efficient alternative to the building's old boilers. The downside: heat pumps represent a much higher upfront cost than standard AC units. And, as Eyal was to learn, they also require a bit more help from a contractor to choose the best configuration and navigate the city's permit process.

That year, the city launched the Energize Denver Energy Navigation program (EDEN) pilot designed to help small building owners like Eyal comply with new energy efficiency standards. The program paired owners with an energy and finance coach to guide them through their compliance options. Eyal's building qualified to participate and he was soon chatting with Tracy Phillps, his EDEN program advisor.

Eyal shared his concerns with Tracy about the higher cost of heat pumps and uncertainty in achieving compliance with Energize Denver. Tracy reassured him by showing him that financial incentives could make the project affordable and that heat pumps would more than meet the compliance requirements.

Most buildings in the "small buildings" category of Energize Denver can comply by replacing the lighting fixtures throughout the building with LEDs. However, for a small number of buildings, this route isn't practical. These buildings can pursue a 15% reduction in their total energy use instead. Because the heat pumps are much more efficient than the existing boilers, the project would reduce the building's energy use by more than 15% and count for compliance.

With Tracy's help, Eyal navigated the permitting and contracting process to get his heat pumps installed. "It's hard to navigate the process and it's hard to get contractors to help in the right ways," Eyal told us. "So having someone like Tracy to help with [it all] is how we were able to get through it."

One big lesson: find a contractor experienced with installing heat pumps. Adding heat pumps to multifamily housing is still a relatively new concept. Still, it is possible - and even favorable - when your contractor is willing to work with the building's layout and work with the unique challenges of having multiple units each needing equipment.

It's also important to have a contractor who will help with the more extensive permitting process that multifamily buildings must go through compared to single-family homes. "There are more steps than a normal home will go through. And each of those steps was kind of a surprise for me," Eyal told us.

Adding more steps to the process means the project will often take longer than you expect. "I spent a lot of time waiting, waiting, waiting, for approvals, getting drawings, getting permits, and getting plans approved." Another lesson learned: give yourself more time than you think you need to complete the project.

Despite the additional time and money, Eyal and his tenants are very happy with the outcome.

"Eyal could have taken the easy way out to get into compliance with Energize Denver," Tracy told us. "But he was really interested in making his building more efficient and providing cooling to his tenants. So, getting the heat pumps really ended up being a win for everyone."

"I think the tenants have forgotten what it's like not to have AC," Eyal told us. "Every time I come here, those heat pumps are running, so I know they are using them."

More than that, the cooling is affordable for the tenants. "I know the tenants are using [the heat pumps], which also tells me they can afford it. That was my concern." Eyal's next project is to partner with Xcel Energy to weatherize the apartment units and add insulation where needed, further lowering bills.

"Every time I walk into an apartment, and it feels nice and cool there, I know that's [the tenants'] experience every day. And that's how I know it was worth it."