Eight Fuel Cells at the Lafayette Hotel

Money—specifically financing a historic rehabilitation—was the initial impetus for selecting a fuel cell CHP system for the Lafayette Hotel & Suites, a multibuilding complex on a 2.4-acre site in the North Park neighborhood of San Diego.

Originally built in 1943 as the Imig Manor, the property was acquired by Hampstead Partners in 2004. The new owner, along with partner JCG Development, determined that the site was eligible for federal historic tax credits, assuming renovations followed the Secretary of the Interior's Standards for the Treatment of Historic Properties, and that such a project might also be entitled to a new markets tax credit (NMTC), a federal program established in 2000 to help revitalize low-income communities.

To get the NMTC, however, the project team had to demonstrate, among other criteria, that the renovated complex would have a positive impact on the surrounding community. The owner and developer “decided to go green” to try to meet that requirement, explains Tara J. Hamacher, owner of San Diego–based Historic Consultants, which assists developers in obtaining eligible tax credits and investors for large historic restoration projects.

In terms of power generation, the project team first considered solar panels to provide electricity. But the panels' expected operational savings of 10 percent did not justify their high installation cost, and the roof-mounted equipment would not be in keeping with preservation guidelines. Further research indicated that energy-efficient fuel cells could be installed in the basement at a much more affordable price without disturbing historic fabric. And because fuel cells are an emerging technology, the team calculated that this approach would help set their NMTC application apart.

Waste heat from fuel cells keeps the Olympic-size pool temperate at San Diego’s Lafayette Hotel. Photo courtesy of Lafayette Hotel

 

The strategy paid off. The project qualified for both the federal historic and new markets tax credits, which provided a total of $7.7 million in tax credit equity. The developer also received a cash rebate from the state and an investment tax credit from the federal government to offset the cost of the fuel cells.

The 40-kilowatt system consists of eight independent fuel cell modules, each about the size of a refrigerator. Natural gas from an existing main line is piped through eight branch lines to serve the separate units. Internally, hydrogen molecules are extracted from the gas. Meanwhile, each module pulls in up to 1,000 cubic feet per minute of air through vents for oxygen and internal cooling. When oxygen molecules from the air and hydrogen molecules from the gas are combined within the fuel cell, an electrochemical process occurs that generates electricity and heat.

Cumulatively, the eight fuel cells produce about 45 percent of the main building's total electrical needs. Excess electricity can be exported to the local utility grid. Although this system cannot supply electricity to the hotel when the grid is down, the fuel cell manufacturer—ClearEdge Power—now has a range of systems that could do so for specific, protected loads.

Running through all eight fuel cell units are water pipes that converge into one large trunk line to carry water that has absorbed the waste heat to a heat exchanger, which transfers the thermal energy to the outdoor pool, keeping the water between 76 and 79 degrees.

The initial cost of the fuel cell system was $477,000. With the $100,000 state rebate and the $108,000 federal investment tax credit, the net cost to the owner was $267,000. The fuel cell system is estimated to save about $30,000 in electricity costs in 2012, without factoring in the money saved by using the system's waste heat to maintain the temperature of the pool water.

According to those figures, the fuel cells will pay for themselves in about eight years. But Hamacher looks at it differently: “Without the fuel cells, we wouldn't have been able to bring $7.7 million to the table to begin with. So they have already paid for themselves.”

Nancy B. Solomon, AIA, editor of Architecture: Celebrating the Past, Designing the Future, writes frequently about architecture, planning, and sustainable design.