Commercial-Scale Air-Source Heat Pump Program Program Manual

Commercial-Scale Air-Source Heat Pump Program Program Manual Effective Date: October 24, 2017 The Massachusetts Clean Energy Center ( MassCEC ) has authorized $30 million in funding to support a suite of Clean Heating & Cooling programs through 2020. As part of this initiative, MassCEC provides Grants to install high-efficiency, cold-climate air-source heat pumps ( ASHP ) at commercial, public, nonprofit, agricultural, and multifamily properties through the Commercial-Scale Air-Source Heat Pump Program (the Program ). In the interest of increasing access to these technologies to broad customer populations, MassCEC offers higher incentive levels for affordable housing developments, public agencies, and non-profits. Eligible projects ( Projects ) include variable refrigerant flow ( VRF ) ASHP systems of any size as well as commercial-scale air-to-air, split-system heat pump ( Mini-Split ) systems at commercial, public, nonprofit, agricultural, and multifamily facilities. This Program also applies to Mini-Split Projects of the following scale: 1. More than twenty (20) Single-Head ASHPs; or 2. More than two hundred forty (240) kbtu/hr of heating capacity at five (5) degrees Fahrenheit (with any single-head unit counting as 12 kbtu/hr). For Mini-Split Projects that do not meet these criteria, please refer to the Residential and Small-Scale ASHP Program Manual available on the MassCEC website. Under the Program, a System Owner and system designer and/or installer must submit an Application and receive confirmation the application has been approved for the proposed Project prior to purchasing equipment or beginning construction of the ASHP Project. Construction may begin only after MassCEC approves an Application. Funds are paid by MassCEC when the Project meets the required program milestones. This Commercial-Scale Air-Source Heat Pump Program Manual (the Program Manual ) describes the Grant application process (Section 1), eligibility requirements (Section 2), and Grant levels (Section 3). The capitalized terms used in the Program Documents are defined in Section 4 of this Program Manual. Program Documents and information are located on the Program webpage at: http://www.masscec.com/get-clean-energy/business/air-source-heat-pumps.

Table of Contents 1. How to Participate in the Program... 3 2. Eligibility Requirements... 6 2.1. Project Site Eligibility... 6 2.2. System Owner Eligibility & Requirements... 7 2.3. Eligible Project Costs... 7 2.4. Eligibility for Public, Non-Profit, and Affordable Housing Incentives... 7 2.5. Primary Designer and Primary Installer Requirements... 8 2.6. Technology Requirements Variable Refrigerant Flow Systems... 10 2.7. Technology Requirements Mini-Split Systems... 13 2.8. Additional Requirements (All Systems)... 16 3. Grant Structure... 17 4. Program Definitions... 20 5. General Terms and Conditions... 24

1. How to Participate in the Program Step 1. Confirm Project Site Eligibility: All Project Sites must meet Program eligibility requirements as detailed in Section 2.1. It is recommended that System Owners explore complementary incentives, such as those offered by Mass Save. Step 2. Select a Primary Designer: The System Owner must select a Primary Designer (for a VRF Project) or a Primary Installer (for a Mini-Split Project) that can meet the requirements in Section 2.5. MassCEC recommends consulting the Participating ASHP Installers page on MassCEC s website prior to contracting with a Primary Designer or Primary Installer. A VRF System Owner may select a Primary Installer at this time as well (which may be the same entity as the Primary Designer), but this is not required until the submission of Milestone #1. Step 3. Complete Preliminary System Design: Before applying for a Grant, the Primary Designer (VRF Project) or Primary Installer (Mini-Split Project) must complete a preliminary system design (or engineering concept) that meets the requirements outlined in Section 2.6. This design will enable completion of the Grant Application but does not need to be final, and it is expected that designs will change. Step 4. Apply for Grant: The Application should be completed and submitted jointly by the System Owner and the Primary Designer or Primary Installer (together, the Applicant Parties ). MassCEC strongly encourages the Primary Designer or manufacturer representative to prepare the Application, with assistance from the System Owner. System Owners must receive written notice of the approval and amount of an Award ( Award Letter ) from MassCEC prior to starting construction of the ASHP system. The Application Documents must be emailed to ASHP@masscec.com with the subject line ASHP Commercial Application: [Project Site Name]. The Applicant Parties must review all submitted information. Applications must include the following, except as noted by an asterisk: 1. Application Form A completed Excel Application form, which includes the Application checklist, contact information for key project staff, site information, data on the proposed ASHP system, grant amount, project timeline, budget, and Payment Milestone checklist. 2. Project Narrative (Large Projects only) A completed Project Narrative form. Not required for VRF Projects with less than 240 kbtu/hr of rated heating Capacity at 17 degrees Fahrenheit. 3. System Owner s Agreement Signed by the System Owner and, in the case of a third-partyowned system, by the Site Owner as well. 1 1 The Application may include either the entire System Owner s Agreement or the last page (the Signature and Acceptance Form). Signatures must be scanned versions of original handwritten signatures. 3

4. Load Calculation Summary The summary report of the heating and cooling load calculation, as described in Section 2.6 (VRF) or Section 2.7 (Mini-Splits). This may be submitted at Milestone #1. 5. ASHP Design Summary (VRF only) A summary page from ASHP design software that shows key design data that meets the equipment sizing criteria described in Section 2.6. This includes the model numbers for indoor and outdoor units to be installed and the VRF capacity under maximum block load conditions. This may be submitted at Milestone #1. 6. AHRI Rating Sheet (VRF only) A one-page specification downloaded from the AHRI website that shows the rated system performance. A sheet must be submitted for each outdoor ASHP model listed on the Application Form. 7. Electric Bill A copy of the electric bill from the Project Site (for address verification only) that clearly displays the name of the utility, rate code, and service address. New construction projects can submit the electric bill or a request for electric service at Milestone #2. 8. Tax Documentation o All System Owners (including all tax-exempt and government entities) must submit signed W-9 forms separately to finance@masscec.com (do not copy ASHP@masscec.com). Likewise, if the Primary Designer or Primary Installer is designated as the payee, that organization must submit a W-9. o Tax-Exempt Entities (including government entities) must also submit tax-exemption certificate or IRS tax-exemption determination letter to finance@masscec.com. 9. Affordable Housing Documentation If applying for an Affordable Housing Grant, the documentation described in Section 2.4 must be submitted. Step 5. Receive Award Letter: Upon receiving the Application, MassCEC program staff will send two (2) separate emails. The first email will confirm that the Application has been received, and the second will indicate one of the following Application statuses: The Application is complete and has been accepted. The Award Letter and Milestone Completion Form will be attached to this email; The Application was incomplete or did not comply with Program requirements, and further information or revisions are needed; The Application was complete and has been forwarded to MassCEC s third-party consultant for Design Review (see Section 2.5); or, The proposed Project is ineligible and has been rejected. MassCEC will notify the Applicant Parties of their Application status within four (4) weeks of receipt, barring extenuating circumstances. If the Application meets all Program requirements and funding remains available, MassCEC will issue an Award Letter to the System Owner via email that will provide details on the Award amount and denote which party will receive payment ( the Payee ). If the Project is selected for a third-party Design Review, MassCEC shall notify the System Owner when issuing the Award Letter. The System Owner must submit design documents to MassCEC or its third-party consultant prior to ordering equipment, as described in the Design Review process in Section 2.5. 4

Step 6. Complete Project Milestones: Project installation may commence only after receipt of the Award Letter. Projects must be completed within twenty-four (24) months of the Award Date on the Award Letter for Project Sites at existing buildings and thirty-six (36) months for Project Sites at newly constructed buildings. Projects must meet intermediate milestones and submit Milestone Deliverables accordingly, as described in the following table: Milestone Milestone #1: System Design and Equipment Purchase Milestone #2: Construction and Commissioning Deliverables Summary Project Milestones Milestone Completion Form Invoice documenting ASHP models and quantities ordered Updated Application Documents reflecting revised design, if applicable Primary Installer Agreement, if not already submitted Milestone Completion Form Photographs of installed equipment Demonstration of system start-up testing (manufacturer start-up or commissioning report) Electric Bill, if not already submitted % of Grant 30% 70% Time Allowed (from Award Date) 12 months (existing buildings); 24 months (new construction) 24 months (existing buildings); 36 months (new construction) Milestone Deliverables requirements are detailed in Section 2.6 and Section 2.7. Milestone Deliverables should be submitted by emailing a completed Milestone Completion Form to ASHP@masscec.com with ASHP Commercial Project Deliverable: [Project Site Name] in the subject line. In the event of unusual delays, the System Owner may request an extension by emailing ASHP@masscec.com and providing an explanation for the request, which may be granted at MassCEC s discretion. Note that if a different set of ASHP units are selected after the Grant funds have been reserved, the Application Documents must be resubmitted with updated information on the system design. MassCEC will review the updated Application Documents based on Program criteria and may adjust the Award amount or (if the Project is no longer in compliance with Program requirements) elect not to allow a modified Award. Assuming modifications are approved, MassCEC will issue a revised Award Letter with the appropriate Grant amount or notify the System Owner (via email) that the Grant amount has not changed. The Grant amount may not be increased if equipment changes are made at completion of Milestone #2, but it may decrease if the installed Project qualified for a lesser Grant. MassCEC may request additional documentation at either Payment Milestone to confirm that the Project meets all the requirements outlined in Section 2. Step 7. Receive Grant Payment: Grants may be paid to either 1) the System Owner; or 2) the Primary Installer if the System Owner provides permission in the Application. Upon approval of the Milestone 5

Deliverables, payment will be issued to the designated Payee within four (4) weeks, barring extenuating circumstances. 2. Eligibility Requirements System Owners, Primary Designers, Primary Installers, and Projects must meet the following eligibility requirements. 2.1. Project Site Eligibility Eligible Project Sites The Commercial-Scale ASHP Program supports Projects at multifamily housing developments, as well as commercial, public, and non-profit facilities. The Program allows for third-party owned systems, meaning the System Owner may be a different entity from the Site Owner. Both new buildings and existing buildings are eligible. Major building renovations or rehabilitations are typically considered new construction for purposes of this Program. Projects must provide space heating, and may provide cooling as well. Space heating must be used throughout the heating season. A Project Site is typically defined as a single, contiguous structure owned or managed by a single entity. Multifamily buildings or other developments that encompass multiple buildings may be considered one or more Project Sites. Likewise, if a Project Site is developed in multiple construction phases, it may be treated as multiple Projects for purposes of this Program (requiring a corresponding number of Applications). The System Owner should contact MassCEC with questions about whether the ASHP installation will be treated as one or more Project, which affects maximum Grant amounts. MassCEC will take the System Owner s preference into account but reserves the right to make the ultimate determination. This Program applies to all VRF Projects. It also applies to Mini-Split Projects of the following scale: 1. More than twenty (20) single-head ASHPs; or 2. More than two hundred forty (240) kbtu/hr of heating capacity at five (5) degrees Fahrenheit (with any single-head unit counting as 12 kbtu/hr). Project Site Utility Service Requirement The Project Site must be located in an electric utility territory that contributes to the Massachusetts Renewable Energy Trust. This includes the Massachusetts electric service territory of National Grid, Eversource, Unitil, and municipal light plants that have elected to pay into the Renewable Energy Trust (please see www.masscec.com/municipal-lighting-plant-communities for more information). Project Site Energy Efficiency Requirement Each Project Site shall work with its utility, or another entity, to identify and implement opportunities for energy efficiency upgrades before or in coordination with the installation of the Project. Any Project Site with existing facilities must have had an energy efficiency whole-building walk-through completed within 6

the past forty-eight (48) months or schedule a whole-building energy-efficiency walk through prior to Project Completion. More information about Mass Save s energy efficiency programs for new construction/major renovation, large retrofits, small businesses, and multifamily buildings is available at www.masssave.com/en/business/incentive-programs. More information about Mass Save s no-cost facility assessments can be found at www.masssave.com/en/saving/business-rebates/facilityassessments. 2.2. System Owner Eligibility & Requirements Primary Contact The System Owner must designate a primary contact on the Application Form. This individual is responsible for ensuring the Project meets all Milestone Deliverable deadlines and that both the System Owner s organization and contractors respond to MassCEC communications in a timely manner. If this individual vacates their position at the organization, a new contact must be assigned, and MassCEC must be notified of the change by email. MassCEC reserves the right to revoke awards at its sole discretion in the event that the primary contact is unresponsive to MassCEC requests. Multifamily Rental Property Multifamily property owners with existing central heating and/or cooling systems often have centrally metered heating systems, with heating costs paid by the property owners. These owners may receive funding through this Program, however if the Project switches existing tenants from a centrally metered heating system to individually metered ASHP units paid primarily by the tenant, the property owner must agree that their tenants rent and utilities payment will not increase as a result of the Project. (This does not preclude rent increases for other reasons and does not apply to new tenants.) 2.3. Eligible Project Costs Eligible Project Costs include ASHP equipment (indoor and outdoor units), refrigerant piping, controls, wiring, and other components necessary for proper system operation, as well as all costs directly related to system design, installation, and commissioning. If project proponents have questions regarding Eligible Project Costs, they should contact MassCEC prior to submitting an Application. Note that that this Grant can only cover up to fifty (50) percent of Eligible Project Costs, as described in Section 3.1. 2.4. Eligibility for Public, Non-Profit, and Affordable Housing Incentives MassCEC offers higher-tiered incentives for Projects that meet certain criteria. Public and Non-Profit Grant Public and Non-Profit Entities Projects are eligible to receive higher grant levels under the Program. Public Entities are defined as instrumentalities, authorities, agencies, departments, or political subdivisions of the Commonwealth of Massachusetts, including municipalities. Non-profits are defined as organizations under Section 501(c) (3) of the Internal Revenue Code and registered with the Massachusetts Attorney 7

General, Non-Profit/Public Charities Division. Projects that receive funding from the DOER-administered Leading by Example program are not eligible for funding through this Program. Affordable Housing Grant MassCEC and the Commonwealth of Massachusetts have a particular interest in increasing access to clean heating and cooling technologies for low and moderate income residents. As a result, MassCEC offers higher-tiered ASHP incentives to multifamily affordable housing developments in Massachusetts. Any Project may apply for the Affordable Housing Grant if the System Owner can demonstrate that at least fifty percent (50%) of the property s units are committed or deeded to units at or below eighty percent (80%) of the state s median income, using one of the following methods: 1) An eligibility letter from the Low-Income Energy Affordability Network ( LEAN ) s Low-Income Multifamily ( LIMF ) Energy Retrofits Program. See http://leanmultifamily.org/ for more details. 2) A deed restriction that explicitly states the development has reserved at least 50% of the units for households earning 80% or less of the standard median income level. If it is not explicit, then Applicants will need to provide item 1, 3, or 4 instead. 3) For housing shelters, a letter from an individual with signatory authority stating that the property is used as a housing shelter. 4) Other forms of documentation as determined by MassCEC on a case-by-case basis. Higher tier incentives are not cumulative and projects owned by Public Entities and Non-Profits utilizing the Affordable Housing Grant are not eligible for additional funds through a Public and Non-Profit Grant. 2.5. Primary Designer and Primary Installer Requirements This Program defines three categories of ASHP contractor roles: 1) Primary Designer (VRF Only); 2) Primary Installer (VRF); and 3) Primary Installer (Mini-Split). An individual can sign up to participate in the Program in one, two, or all three of these roles. Primary Designer/Installer Agreement Primary Designers (for VRF Projects) and Primary Installers (for Mini-Split Projects) must complete and return the Primary Designer/Installer Agreement prior to or with the Application. For VRF, Primary Installers must complete and submit this agreement prior to or with Payment Milestone #1. The Primary Designer may be a manufacturer s representative, employee of an engineering or contracting firm, owner s engineer, or another qualified individual. If an entity acts as both a Primary Designer and Primary Installer, only one agreement must be submitted at the time of Application submission certifying that the individual will abide by requirements and terms of the Program. The Primary Designer/Installer Agreement is valid for future Projects through this Program and does not need to be resubmitted for each Project. 8

Accreditation and Training Primary Designer (VRF Only) The Primary Designer should be the individual completing the majority of the design work on the VRF system. Other individuals involved in Project design may be listed on the Application Form but are not responsible for meeting the Program requirements. The Primary Designer may be a manufacturer s representative, employee of an engineering or contracting firm, or owner s engineer. Prior to submitting an Application, the Primary Designer must submit copies of the following certifications: 1. A Professional Engineer ("PE") license in mechanical engineering or another relevant field; and 2. A letter or certificate from the manufacturer verifying that he or she has successfully completed at least eight (8) hours of manufacturer training within the last five (5) years for the products to be used in designs under the Program. For VRF designers who do not meet these requirements, there are two options: 1. A manufacturer may submit a written request for a waiver from these requirements on behalf of the Primary Designer. MassCEC will review such requests on a case-by-case basis. The Primary Designer may submit additional brand certifications throughout the Program. 2. If the Primary Designer has a PE license but has not received VRF training, he/she may sign up as a Primary Designer, but when submitting a new application to this Program, the Primary Designer must designate a colleague who will work on the Project that meets the training requirements. The Primary Designer must have experience completing software-based heating and cooling block load calculations, selecting appropriate HVAC equipment, ensuring system designs comply with relevant building codes, and completing physical system design drawings and structural analyses. The Primary Designer must agree to comply with the Design Review process outlined below. Accreditation and Training Primary Installer The Primary Installer must submit a copy of a letter or certificate from the manufacturer verifying that the individual who will oversee system installation has successfully completed the training requirements outlined below for each product line they will install through this Program: 1) Mini-Split ASHP at least four (4) hours of manufacturer training within the last five (5) years. 2) VRF ASHP at least sixteen (16) hours of manufacturer training within the last five (5) years. This must be submitted with the Application or earlier for Primary Installers completing Mini-Split Projects or no later than Milestone #1 for those completing VRF Projects. Primary Installers may submit additional brand certifications throughout the Program. A manufacturer may submit a written request for a waiver from these requirements on behalf of the Primary Installer. MassCEC will review such requests on a case-by-case basis. MassCEC Design Review 9

MassCEC may submit any system design to a third-party reviewer and intends to submit at least one system design from each Primary Designer for review. Primary Designers should be prepared to work with the reviewer to answer any outstanding questions about the Project s design and must respond within seven (7) days to any information requests. These requests may include information beyond what is required for the standard application process, such as design drawings or energy analysis data. MassCEC Inspection and Commissioning The Primary Installer must agree to be subject to MassCEC inspection or conduct independent commissioning when signing the Primary Designer/Installer Agreement. MassCEC typically requires each Primary Installer s first two systems submitted through this Program to be either inspected or commissioned by a third party to ensure compliance with the requirements in this Program Manual. Inspections under MassCEC s Residential ASHP Program do not count toward this requirement. MassCEC reserves the right to review or inspect subsequent projects at random or due to suspected issues. If the third-party inspector or commissioning agent detects an issue with a system installation, MassCEC reserves the right to suspend current Applications and/or stop accepting Applications from that Primary Installer and/or its subcontractors. Primary Installers should be prepared to work with the inspector to answer any questions about the Project s design or installation and must respond within seven (7) days to any information or scheduling requests. Commissioning is recommended but not required for VRF Projects. If the System Owner opts to undergo a commissioning, the VRF system should be configured to maximize energy savings by optimizing zonal controls, integrating with building energy management systems, or through other post-installation measures. 2.6. Technology Requirements Variable Refrigerant Flow Systems Equipment Requirements To be considered Qualified Equipment under this Program, VRF units providing at least 65 kbtu/hr of cooling capacity must: 1. Have completed certification under the 2010 Standard for Performance Rating of Variable Refrigerant Flow (VRF) Multi-Split Air-Conditioning established by the American National Standards Institute (ANSI) and Air-Conditioning, Heating, and Refrigeration Institute (AHRI) ( AHRI 1230 ) and meet the definition of VRF Multi-Split Heat Pumps or Multi-Split Heat Recovery Heat Pumps in AHRI 1230; 2 2. Meet the minimum efficiency ratings established in the ANSI/ASHRAE/IES Standard 90.1-2016 Energy Standard for Buildings Except Low-Rise Residential Buildings ( ASHRAE 90.1 ), which serves as the Efficiency Standard for this Program. For VRF systems, ASHRAE 90.1 includes 2 Link: http://www.ahrinet.org/app_content/ahri/files/standards/ansi/ansi_ahri_standard_1230_2010_with_add_2.pdf 10

minimum ratings for Energy Efficiency Ratio ( EER ), Integrated Energy Efficiency Ratio ( IEER ), Coefficient of Performance ( COP ), and Seasonal Cooling and Heating Efficiency ( SCHE ). To be considered Qualified Equipment under this Program, VRF units providing less than 65 kbtu/hr of cooling capacity must: 1. Have completed certification under the 2008 Standard for Performance Rating of Unitary Air- Conditioning & Air-Source Heat Pump Equipment established by ANSI and AHRI ( AHRI 210/240 ) and meet the definition of VRF Multi-Split Heat Pumps or Multi-Split Heat Recovery Heat Pumps in AHRI 210/240; 3 2. Include the following features that differentiate the systems from Mini-Splits: a. Electronic expansion valves built into the indoor units; b. Piping systems with the capability to include a single piping network with branches for each indoor unit, rather than a separate pipe running from the outdoor unit to each indoor unit; and c. Designed using specialized manufacturer design and optimization software offered. 3. Achieve the following minimum efficiency ratings: a. Heating Seasonal Performance Factor (HSPF): 10.0 b. Seasonal Energy Efficiency Ratio (SEER): 17.0 c. Energy Efficiency Ratio (EER): 11.0 Projects that do not qualify as VRF under this Program include: 1. VRF Multi-Split Air-Conditioners that do not provide heating; 2. Ground-source heat pump systems, including those with VRF distribution systems; 3. Water-source heat pumps; and 4. Systems that qualify as Mini-Splits, as defined in Section 2.7. MassCEC may update or modify these requirements, potentially by establishing a more stringent Efficiency Standard. Before enacting such a change, MassCEC shall notify those manufacturers whose product lines will meet Program requirements of Qualified Equipment of the proposed changes and allow a comment period of no less than two weeks, after which MassCEC will finalize the requirement and reissue this Program Manual with the updated requirements. If MassCEC issues a significant change to the Efficiency Standard, MassCEC will strive to provide at least twelve (12) months notice prior to the date that the new requirements take effect. All Qualified Equipment with at least 65 kbtu/hr of cooling capacity can be found in the online AHRI Directory at https://www.ahridirectory.org/ahridirectory/pages/vrfhp/defaultsearch.aspx. Note that all units listed in the Directory are expected to meet ASHRAE 90.1 (and therefore meet the Efficiency Standard). 3 Link: http://www.ahrinet.org/app_content/ahri/files/standards%20pdfs/ansi%20standards%20pdfs/ansi.ahri%20standard%2021 0.240%20with%20Addenda%201%20and%202.pdf 11

All Qualified Equipment with less than 65 kbtu/hr of cooling capacity can be found in the online AHRI Directory at https://www.ahridirectory.org/ahridirectory/pages/hp/defaultsearch.aspx. Note that most units in this database do not qualify as VRF or meet the efficiency specification. System Controls Any VRF Project with at least 240 kbtu/hr of outdoor heating capacity at 17 F must include a central, Internet-connected controller that allows a remote operator to control the temperature within each conditioned zone in the building. MassCEC recommends but does not require inclusion of more advanced controls as well. Heating and Cooling Load Calculation The Applicant Parties must submit a summary of the heating and cooling load calculation. Block load calculations (which account for expected building use patterns) are required for Projects installing at least 240 kbtu/hr of total rated heating capacity at 17 F. Peak load calculations (based solely on heat loss/gain from outdoor ambient conditions) are allowed for Projects below this threshold, though MassCEC reserves the right to request more detailed calculations. A peak load calculation must include the heating and cooling loads for zone(s) being served by the VRF system. Block calculations must include both indoor and outdoor unit model numbers and the modeled air-source heat pump capacity under peak summer and winter design temperatures. MassCEC reserves the right to determine whether a software application is acceptable. If the Applicant Parties want to confirm whether the software is acceptable, they may contact MassCEC. Commercial Mini-Split Projects may submit peak load calculations using ACCA-approved Manual J/N software, as described under the Heating and Cooling Load Calculation requirements for Mini-Splits in Section 2.7. Equipment Sizing, Selection, and Design Summary All new construction or major renovation Projects must be designed to operate as the Project Site s primary source of heating and cooling and provide enough capacity to meet 100% of the building s block load. The Project can still include supplemental heating or cooling sources for spaces not designed to be conditioned by the VRF system, or to provide emergency backup or additional capacity in extreme weather. Furthermore, ventilation air is not typically counted in the block load and is therefore exempt from this sizing requirement. Projects at existing buildings do not need to meet this requirement, unless they are intended as a sole source of heat. In other words, retrofits with existing capacity may rely on additional sources of heat to meet their heating load. Equipment must be sized and selected in accordance with manufacturer-recommended practice. Furthermore, the Primary Designer must ensure that the equipment selection software (typically provided by the manufacturer) accounts for variations in heating and cooling load and capacity delivered that results from changes in outdoor ambient conditions, as well as refrigerant piping and anticipated building occupancy and usage patterns. 12

The ASHP Design Summary must include the indoor and outdoor unit model numbers and the capacity of the outdoor unit at winter and summer design temperatures (i.e. the temperatures at which the maximum heating and cooling loads will occur). Installation Requirements All ASHPs must be installed by licensed contractors in accordance with the National Electric Code and manufacturer s specifications, and must conform to all applicable municipal, state, and federal codes, standards, and regulations, as well as Program requirements. The System Owner must certify that the Project has received approval from the local building inspection authority as part of the System Owner s Agreement. 2.7. Technology Requirements Mini-Split Systems Projects installing Mini-Splits must meet the following requirements: Applicable Technologies Eligible Mini-Splits include the following technologies that have met the performance rating established by the AHRI 210/240 Standard for unitary air conditioning and air-source heat pump equipment: Air-to-Air, split-system heat pumps; Single-Head, Multi-Head, and Central systems; and Ducted and ductless systems (both single and multi-head). The following equipment types are NOT eligible for the Program: Cooling-only units; Single-stage heat pumps; Ground-source heat pumps (see Commercial-Scale Ground-Source Heat Pump Program); Water-source heat pumps; or Air-to-Water Heat Pumps. Equipment Requirements Only Projects installing qualifying high-efficiency, cold-climate Mini-Splits are eligible. A qualifying coldclimate Mini-Splits: 1. Meets the Qualified Equipment Performance Requirements for Mini-Splits in the table below; 2. Is listed as ENERGY STAR compliant; 3. Has a variable capacity compressor; and 4. Has both indoor and outdoor units that are part of an AHRI matched system. 13

Qualified Equipment Performance Requirements for Mini-Splits Minimum Performance Requirement Single-Head Air-to-Air Multi-Head/Central COP @ 5 F (at maximum capacity) 1.75 1.75 Percent of Rated Heating Capacity Delivered at 5 F 100% 100% HSPF 10 10 (Multi-Head), 10 (Central) SEER 20 17 EER 12.5 12.5 MassCEC will occasionally update these Performance Requirements to reflect the highest efficiency products that are available on the market. All ASHPs must be installed by licensed contractors in accordance with the National Electric Code and manufacturer s specifications, and must conform to all applicable municipal, state, and federal codes, standards, and regulations, as well as Program requirements. Heating and Cooling Load Calculation The Applicant Parties must submit the summary page of the ACCA Manual J (or Manual N, if applicable) calculation of the building s peak heat load at the ninety-nine (99) percent dry bulb heating design temperature and one (1) percent dry bulb cooling design temperature for the most relevant ACCA design location. Indoor temperature set points of sixty-eight (68) to seventy-two (72) degrees Fahrenheit, unless actual building use conditions will differ. All ACCA-listed Massachusetts locations and their heating design temperatures are shown below. For projects with multiple or many zones, one analysis for each representative zone is sufficient. For example, in a seventy (70)-unit apartment building with a combination of one-bedroom units and studio units, two Manual J calculations must be submitted one for a standard one-bedroom unit and one for a standard studio unit. 14

Massachusetts Location Heating Design Temperature ( F) Massachusetts Location Heating Design Temperature ( F) Barnstable 14 Martha s Vineyard 12 Boston 12 New Bedford 12 Buzzards Bay 17 Norwood 9 Chatham 16 Otis (Air Force Base) 13 Clinton 2 Pittsfield -3 Fall River 9 Plymouth 10 Falmouth Area 14 Provincetown 18 Framingham 6 South Weymouth 10 Gloucester 5 Springfield 0 Greenfield -2 Taunton 9 Lawrence 9 Weymouth 11 Lowell 1 Worcester 6 Equipment Sizing and Selection The Primary Designer must ensure that the building has sufficient heating and cooling capacity (from ASHPs and any other installed sources) to meet demand at specified temperature set points throughout the year for the space being conditioned. This must account for variations in load and capacity delivered that results from changes in outdoor ambient conditions, as well as piping and anticipated building occupancy and usage patterns. Any Projects at existing buildings that are designed to supply all of a building s heat load with no supplemental heat source must meet a minimum of 100% of the building total peak heating load as calculated using the ACCA Manual J (for residential) or other relevant design software. All new construction Projects must be designed to operate as the Project Site s primary heating source. Therefore, they must provide 100% of the building total peak heating load as calculated using the ACCA Manual J (for residential) or Manual N (for commercial). Equipment sizing should be based on the ASHP s capacity at the design heating temperature listed in the table above. For example, a Project installed at a new construction Project Site in Boston (heating design temperature of 12 F) should provide a minimum of 100% of the building s peak heating load based on the ASHPs capacity at 12 F. If the capacity of the ASHPs is not available at the design temperature, the ASHPs capacity may be interpolated between neighboring capacity points. Performance data at 5 F is available through the NEEP specification. Note: The Grant for multi-heads and ducted systems is calculated based on capacity at 5 F regardless of the Project s design temperature. 15

2.8. Additional Requirements (All Systems) Warranty Any Project receiving an Award under the Program must be covered by a minimum ten (10) year manufacturer s warranty for both parts and compressor (this may be a standard or extended warranty). Furthermore, the Primary Installer must provide a comprehensive warranty that covers all costs associated with correcting any system defects or significant workmanship issues identified within one year of the date that MassCEC approves the payment for Milestone #2. Deviation from Requirements Although MassCEC typically does not allow deviation from design requirements, certain site characteristics lend themselves to alternate system designs. For installations where the Project cannot meet the Program technical requirements, the Applicant Parties may request a waiver. Waivers are granted at MassCEC s sole discretion. Start-up All Projects must demonstrate system functioning by completing a manufacturer assisted start-up and submitting start-up sheets for each unit. In most cases, this is necessary for the System Owner to receive an extended warranty from the manufacturer. The start-up must comply with any manufacturer requirements for this process, for example, that the individual performing the startup to be authorized by the manufacturer. After start-up, the Primary Installer, or another qualified party, must complete a walk-through of system operations and maintenance, building energy management system software, and system controls with a System Owner representative (e.g. an operations or facilities manager). If the building has an energy management system, the VRF Project and system controls must be integrated with the energy management system. System Owners are strongly encouraged, but not required, to undergo system optimization for all Projects. Monitoring MassCEC may choose to monitor a subset of systems installed under this Program. To be eligible for an Award under this Program, the System Owner must agree to allow metering and monitoring to be conducted on their Project for up to twenty-four (24) months after installation, if requested. The System Owner will be required to submit utility and fossil fuel bills for two (2) years prior to installation (for existing buildings) and for the duration of the performance monitoring. Monitoring equipment costs would be paid by MassCEC. Data would be collected and analyzed for Program evaluation purposes and will not impact the Award. 16

3. Grant Structure Grant levels for qualifying Projects are outlined in Section 3.1 below. They are subject to change at the sole discretion of MassCEC. Applicants should review the Program webpage to confirm that they are reviewing the most recent version of the Program Manual. The System Owner is considered the default Payee. However, the System Owner may designate the Primary Designer or Primary Installer as the Payee in the Application. MassCEC will not provide funding that exceeds two hundred fifty-thousand dollars ($250,000). Grantees must cover at least fifty (50%) percent of Eligible Project Costs (the Cost Share ). Eligible Project Costs shall include all costs presented in the Application, less all other incentives received by the System Owner, including any state or federal grants, production credits, subsidies, and tax incentives, discounted to present value where necessary. MassCEC will evaluate these situations on a case-by-case basis, and reserves the right to reduce any Award projected to exceed total Project costs by an amount sufficient to prevent the excess. 3.1. Award Amounts Each Project is eligible for one of three (3) Grant types: 1. Standard Available to all qualified System Owners that do not qualify for the Public/Non- Profit Grant or the Multifamily Affordable Housing Grant. 2. Public/Non-Profit Available to entities that meet the requirements outlined in Section 2.4 for Public and Non-Profit Entities. 3. Affordable Housing Available to entities that meet the requirements outlined in Section 2.4 for Affordable Housing developments. VRF Award Amounts VRF Award amounts are based on the amount of heating capacity installed, based on the capacity of the outdoor units, measured in kbtu/hr at 17 F. VRF models that provide Heat Recovery capability receive a higher incentive than those that do not. Projects are eligible for maximum Grants sufficient to cover 1,800 kbtu/hr of capacity at 17 F an amount that varies depending on the Grant type. If installing a combination of Heat Recovery and non-heat Recovery system, the Heat Recovery capacity will be counted first for purposes of determining maximum incentive levels. Grant Type VRF without Heat Recovery VRF with Heat Recovery Maximum Grant per Project Standard $800 per 12 kbtu/hr $1,200 per 12 kbtu/hr $180,000 Public/Non-Profit $1,000 per 12 kbtu/hr $1,400 per 12 kbtu/hr $210,000 Affordable Housing $1,600 per 12 kbtu/hr $2,000 per 12 kbtu/hr $250,000 For example, a Project that qualifies for the Public/Non-Profit Grant that includes 1,200 kbtu/hr of Heat Recovery capacity and 1,200 kbtu/hr of non-heat Recovery capacity will receive a total Grant of $190,000. 17

Mini-Split Award Amounts For the purposes of determining Grants, awards for single-head ductless systems are based on the number of systems installed. For central or multi-head systems, MassCEC uses the outdoor unit s maximum heating capacity (in kbtu/hr) at 5 F, based on data provided by the Northeast Energy Efficiency Partnership (NEEP) at www.neep.org/initiatives/high-efficiency-products/emergingtechnologies/ashp/cold-climate-air-source-heat-pump. Grant Type Single-Head Central or Multi-Head Maximum Grant Ductless System System per Project Standard $625 per system $625 per 12 kbtu/hr $93,750 Public/Non-Profit $800 per system $800 per 12 kbtu/hr $120,000 Affordable Housing $1,500 per system $1,500 per 12 kbtu/hr $225,000 System Owners may install a combination of single-head and multi-head systems. Each System Owner is eligible for a maximum Grant of $93,750 per Project Site at the standard Grant level, $120,000 with the Public/Non-Profit Grant, or $225,000 with the Affordable Housing Grant. Grants for single-head ductless systems are available to support the first one-hundred fifty (150) units installed. The Project may include more than one-hundred fifty (150) systems, but the Grant will only support the first one-hundred fifty (150) installed. Grants for central or multi-head systems are limited to one thousand eight-hundred (1,800) kbtu/hr of heating capacity (maximum heating capacity at 5 F). Projects may include systems with additional capacity, but the incentive will not increase. Award Limits Individual System Owners may be awarded no more than $500,000 in total Awards through this Program and the Residential and Small-Scale ASHP Program combined in a fiscal year. A System Owner may contact MassCEC to request an exception to this limitation. MassCEC, at its sole discretion, may elect to increase the amount available to a System Owner over and above $500,000. The standard Award limit for any individual Project is based on 1,800 kbtu/hr of capacity, as described above. For purposes of determining maximum Grant amounts per Project, an individual building is typically considered a Project or a section of a building if ASHPs are not installed throughout the entire building. A Project that includes multiple houses, commercial buildings, or some combination thereof, shall apply as a single Project but may request a waiver from MassCEC to apply as multiple Projects. Waivers shall be granted at MassCEC s sole discretion. 18

3.2. Application Evaluation Criteria Applications will be evaluated to ensure that they meet the Eligibility and Project Requirements stated in this Program Manual. MassCEC may reject an Application or modify an Award at its sole discretion for any of the following reasons: Qualifications: the Design and/or Primary Installer team qualifications or past performance on MassCEC-supported projects was insufficient; Planning: the Project has not had sufficient design, installation, or permitting planning; Design: the Project design is poor and/or does not meet the intent of the Program; Risks: sufficient Project risks exist with the technology, project site, installation, or Applicant Parties and/or there is sufficient risk that the Project will not be brought to completion; Cost-Effectiveness: the Project has not demonstrated sufficient cost-effectiveness to the System Owner or to MassCEC and/or the Project costs are too high or the requested Grant level is not appropriate relative to the Project costs; or Quality of Application: the quality of the Application or responsiveness of the Applicant Parties is insufficient. 3.3. Availability of Funds Annual funding may be limited and is available on a first-come, first-served basis. MassCEC will provide three (3) months notice on the Program webpage if it is anticipated that funds will become unavailable in the given fiscal year. (The MassCEC fiscal year runs from July 1 through June 30.) If funds are exhausted, additional funding may be added at MassCEC s discretion. Throughout the duration of the Program, MassCEC reserves the right to modify and decrease the amount of Program incentives. MassCEC will provide a minimum of four (4) weeks notice before any changes to incentive levels go into effect. Please note that Projects that have already received an award will not be impacted but future funding limitations or incentive level modifications. 3.4. Contact Information For questions on the Commercial-Scale ASHP Program, please visit MassCEC s website at: www.masscec.com/business/clean-heating-and-cooling. Questions may also be submitted by email to the Air-Source Heat Pump mailbox at ASHP@masscec.com or directed to (617) 765-0011. 19

4. Program Definitions Affordable Housing Grant: The increased Grant amount for System Owners installing ASHP systems at sites that meet the Program s criteria for affordable housing developments. Air-Conditioning, Heating, and Refrigeration Institute ( AHRI ): A trade association representing manufacturers of heating, ventilation, air-conditioning, refrigeration, and water heating equipment. AHRI provides the database of equipment performance specifications which is used in this Program to determine the Grant amount. Air-to-Air Heat Pumps: These heat pumps utilize outside air as the heat sink and provide conditioned air to the indoor space. Air-to-Water Heat Pumps: These heat pumps using outside air as the heat sink and utilize water to condition the indoor space. Applicant Parties: The System Owner, Primary Designer, and sometimes Primary Installer, who together are responsible for providing the content of and signing the Application. Application: Documentation jointly submitted to the Program by the Applicant Parties requesting an Award. Application Documents: The documents required in an application, which consist of an Application Form, Project Narrative, System Owner s Agreement, electric bill, heat load summary report, and other technical documentation. Application Form: A completed Excel Application form, which includes the Application checklist, contact information for key project staff, site information, data on the proposed ASHP system, grant amount, project timeline, budget, and Payment Milestone checklist. Award: Grant funding awarded to a System Owner under the Commercial-Scale ASHP Program based on a submitted Application that has been approved by MassCEC. Award Date: Date that MassCEC approves and reserves funds for the Award. Award Letter: Written notice (including via email) from MassCEC informing the Applicant Parties of the approval and the amount of the Award. Central ASHPs: Central ASHPs condition air or water at a central location and distribute it throughout the building utilizing a distribution system. Clean Heating and Cooling: Air-source and ground-source heat pumps, solar hot water, and biomass heating. Coefficient of Performance ( COP ): The coefficient of performance of a heat pump is the ratio of heating provided to electrical energy consumed. Cost Share: The provision that the System Owner must cover at least 50 percent of Project costs through cash or other sources besides the Grant. 20

Design Review: A system design submitted to a third-party reviewer that works with Primary Designer to ensure the quality of the design. Eligible Project Costs: Equipment and labor costs required to install the ASHP system. Costs incurred as a result of Grantee labor are not eligible, unless pre-approved by MassCEC (and in these cases, only direct labor costs shall be allowed). Section 2.3 provides further guidance on Eligible Project Costs. Energy Efficiency Ratio ( EER ): A measure of efficiency in the cooling mode that represents the ratio of total cooling capacity to electrical energy input. Grant: The amount awarded to the Grantee and to be paid by MassCEC to the Grantee for installing the Project. Grantee: The System Owner once the Award is made. For third-party owned systems, the Grantee is the owner of the facility that the Project serves. Heat Recovery: This type of VRF system transfers heat from a building zone in cooling mode to a zone in heating mode, allowing for efficient simultaneous heating and cooling. External energy recovery equipment, such as energy recovery ventilators, are not considered Heat Recovery. Heating Seasonal Performance Factor ( HSPF ): This seasonal heating efficiency rating is a metric for overall efficiency over the course of a standard heating season. It is a ratio of BTU heat output over the heating season to watt-hours of electricity used. Integrated Energy Efficiency Ratio ( IEER ): testing for IEER involves actual testing at part load conditions and assigning weighted values to each test point Testing VRF for IEER involves testing at four fixed conditions: 100%, 75%, 50%, & 25% load. kbtu/hr: This common unit of thermal power capacity represents one-thousand (1,000) British Thermal Units of thermal energy delivered per hour. Manual J/Manual N Heat Load Calculation: The calculation of a building s heat load using the methodology of the ACCA Manual J (Residential)/Manual N (Commercial). This heat load represents a building s heating, cooling, and dehumidification capacity needed for a heating and/or cooling unit under design conditions. Manual S/Manual CS: The procedure for equipment selection provided through the methodology of the Air-Conditioning Contractors of America ( ACCA ) Manual CS. Mass Save: The suite of efficiency programs administered by investor-owned utilities in Massachusetts. Massachusetts Renewable Energy Trust: Fund administered by MassCEC, which serves as the primary source of funding for this Program. Milestone Deliverables: Documents submitted to MassCEC certifying that the project has met one of the two Payment Milestones System Design and Equipment Purchase or Construction and Commissioning. Milestone Completion Form: A form to be completed and signed by the Applicant Parties at each Payment Milestone. 21