Life-Cycle Cost Analysis For Buildings Is Easier Than You Thought
Life-Cycle Cost Analysis For Buildings Is Easier Than You Thought
Life-Cycle Cost Analysis For Buildings Is Easier Than You Thought
United States
Department of
Agriculture
Forest Service
Technology &
for Buildings Is Easier
Than You Thought
Development
Program
7300–Facilities
August 2008
0873–2839–MTDC
About the Author
Kathleen Snodgrass came to MTDC as a project leader in 2001. She graduated from Washington State University in
1974 with a bachelor of science degree in architectural studies, then spent about 10 years in highway design and construction
with the Idaho Division of Highways. She began her career with the Forest Service in 1984. Snodgrass worked in facilities,
landscape architecture, land line, and general engineering on the Nez Perce National Forest for 10 years and was the forest’s
facilities architect for about 7 years before coming to MTDC.
Library Card
Snodgrass, Kathleen. 2008. Life-cycle cost analysis for buildings is easier than you thought. Tech. Rep. 0873–2839–
MTDC. Missoula, MT: U.S. Department of Agriculture Forest Service, Missoula Technology and Development Center. 18 p.
Life-cycle cost analysis is a structured method of determining the entire cost of a structure, product, or component
over its expected useful life by adding the cost of operating, maintaining, and using it to the purchase price. By using
the simplified formula explained in this report for small decisions and the free software identified in this report for large
decisions, Forest Service decisionmakers will have the financial information they need to make responsible decisions about
replacing or constructing facilities. This report also includes a brief discussion of life-cycle assessments, which assess all of a
product or service’s environmental costs throughout its lifetime.
Keywords: A-94, ASTM, BLCC, buildings, climate, cradle, design, energy, environment, equipment, eVALUator,
facilities, financial, LCCA, life-cycle assessments, maintenance, operating, performance, repair, replacement, software,
sustainable, systems, value, water
Additional single copies of this document may be ordered For additional information about life-cycle cost analysis,
from: contact Kathie Snodgrass at MTDC:
USDA Forest Service Phone: 406–329–3922
Missoula Technology and Development Center Fax: 406–329–3719
5785 Hwy. 10 West E-mail: [email protected]
Missoula, MT 59808–9361
Phone: 406–329–3978 Forest Service and Bureau of Land Management employees
Fax: 406–329–3719 can search a more complete collection of MTDC’s
E-mail: [email protected] documents, CDs, DVDs, and videos on their internal
computer networks at:
Electronic copies of MTDC’s documents are available on http://fsweb.mtdc.wo.fs.fed.us/search/
the Internet at:
http://www.fs fed.us/eng/t-d.php
Cover figure—The Interagency Helibase in Jackson Hole was built cooperatively by the
Bridger-Teton National Forest of the Intermountain Region and Grand Teton National Park.
Life-Cycle Cost Analysis
for Buildings Is Easier
Than You Thought
Kathleen Snodgrass
Project Leader
August 2008
The Forest Service, United States Department of Agriculture (USDA), has developed this information for the guidance
of its employees, its contractors, and its cooperating Federal and State agencies, and is not responsible for the
interpretation or use of this information by anyone except its own employees. The use of trade, firm, or corporation
names in this document is for the information and convenience of the reader, and does not constitute an endorsement
by the Department of any product or service to the exclusion of others that may be suitable.
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contact USDA’s TARGET Center at (202) 720-2600 (voice and TDD).
To file a complaint of discrimination, write to USDA, Director, Office of Civil Rights, 1400 Independence Avenue, S.W.,
Washington, D.C. 20250-9410, or call (800) 795-3272 (voice) or (202) 720-6382 (TDD). USDA is an equal opportunity
provider and employer.
Contents
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
eVALUator. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Free Software. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Commercial Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Free Software. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Commercial Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Acknowledgments
Many thanks to Deb Mucci, Sunni Bradshaw, Bert Lindler, and Jerry Taylor Wolf for their assistance with assembling this
report and to Craig Lasser, Benerito Martinez, Steve Oravetz, Gary Sonnenberg, Keith Stockmann, and Randy Warbington for
their assistance and helpful advice.
ii
Introduction
L
ife-cycle cost analysis is a method of determining
the entire cost of a structure, product, or component
over its expected useful life. The cost of operating,
maintaining, and using the item is added to the purchase is a structured
• Life-cycle cost analysis
entire cost of a
price. For items that last longer than a couple of years, this is method of determining the
po nent over its
a more realistic way of evaluating cost than simply looking structure, product, or com
at the purchase price. Conducting a life-cycle cost analysis expected useful life.
isn't as difficult
isn't as difficult as it appears. This report explains why • Life-cycle cost analysis
as it appears.
can provide
and how to conduct life-cycle cost analyses and includes • Life-cycle cost analysis
nm akers with the
information on using software tools that reduce the difficulty Forest Service decisio
y need to make
of performing life-cycle cost analyses. financial information the
abo ut
responsible decisions
Don't confuse life-cycle cost analysis with life-cycle
maintaining, improving, and
assessments. Life-cycle assessments are used to evaluate constructing facilities.
the environmental costs associated with a product, process,
structure, or activity. They identify energy and materials
used and wastes released to the environment. Life-cycle
assessments are explained in more detail in the “Life-Cycle
Assessments Can Help You Make Sustainable Choices”
section of this report.
B
ecause funding is limited, Forest Service, U.S.
Department of Agriculture, designers and facilities
managers traditionally have focused on minimizing Construction Operation and
costs maintenance costs
the initial cost of a structure. Unfortunately, this practice
often has produced inefficient, short-lived structures with
unnecessarily high operation and maintenance costs. Over
the life of a building, operation and maintenance cost more
than initial construction (figure 1). This is true both for new
construction and for major replacement and improvement
projects, so it makes sense to include operation and
maintenance when evaluating cost effectiveness.
The 2006 study "Re-examining the Costs and Value
Ratios of Owning and Occupying Buildings" by Graham
Ive found the cost of operation and maintenance of office
buildings to be about one and a half times the cost of initial
construction. Other estimates put the cost of operation
Figure 1—Over 30 years, the cost of operation and maintenance for
and maintenance at up to five times the cost of initial buildings is more than the initial construction cost; how much more
construction. Spending less over the long haul on buildings depends on the building type and location.
Not only is it smart to use LCCA rather than just • Executive Order No. 13423, Strengthening Federal
considering initial cost when evaluating design, lease, and Environmental, Energy, and Transportation
purchase options, it’s also required. Management (http://a257.g.akamaitech.
• Forest Service Handbook 7309.11, section net/7/257/2422/01jan20071800/edocket.access.gpo.
23.4—Standards for Economic Analysis (http://www. gov/2007/pdf/07-374.pdf or http://www.gsa.gov/Portal/
fs.fed.us/im/directives/fsh/7309.11/7309.11_20.doc) gsa/ep/contentView.do?P=MTL&contentId=22395&con
• Executive Order No. 13327, Federal Real Property tentType=GSA_BASIC)
Asset Management (http://a257.g.akamaitech. • The Energy Conservation Standards for New Federal
net/7/257/2422/14 Commercial and Multi-Family High-Rise Residential
mar20010800/edocket.access.gpo.gov/2004/ Buildings and New Federal Low-Rise Residential
pdf/04-2773.pdf or http://www.gsa.gov/Portal/ Buildings (http://edocket.access.gpo.gov/2007/E7-
gsa/ep/contentView.do?contentType=GSA_ 24615.htm)
BASIC&contentId=16911&noc=T)
2
Basic Life-Cycle Cost Analysis Calculation
L
CCA is a well-defined procedure for estimating the The term "present value" in the formula describes costs
overall costs of project alternatives. It is commonly that have been adjusted for inflation, or "discounted." The
accepted throughout the business and engineering emphasis on present value is important when considering
community. Basically, LCCA consists of adding all the initial expensive structures or components that function for many
and ongoing costs of the structure, product, or component over decades, because inflation can influence affordability. It's
the time you expect to be using it, subtracting the value you can usually not worth calculating present value when analyzing
get out of it at the end of that time, and adjusting for inflation. the life-cycle costs of small or short-lived structures,
A lot of information must be assembled and manipulated products, or components.
to accomplish a life-cycle cost analysis, but the basic formula Office of Management and Budget Circular A-94
is fairly straightforward. ASTM International, originally (http://www.whitehouse.gov/omb/circulars/a094/a094.html)
known as the American Society for Testing and Materials, provides the guidelines and discount rates that must be used
develops and publishes technical standards for materials, when determining present value for life-cycle cost analysis
products, systems, and services. ASTM standard E917- on major Federal projects. Circular A-94 requires that life-
02 "Standard Practice for Measuring Life-Cycle Costs of cycle cost analysis be calculated in terms of "net present
Buildings and Building Systems" (http://webstore.ansi.org/ value.” Net present value is computed by assigning monetary
RecordDetail.aspx?sku=ASTM+E917-05) is the standard values to benefits and costs, discounting future benefits and
industry procedure for analyzing life-cycle costs. costs using an appropriate discount rate, and subtracting the
More detailed information about applying LCCA to discounted costs from the discounted benefits. Discounting
Federal projects is contained in the National Institute of benefits and costs transforms gains and losses occurring in
Standards and Technology Handbook 135, Life-Cycle different time periods to a common unit of measurement.
Costing Manual (http://www.bfrl.nist.gov/oae/publications/ The LCCA formula works for all projects, large or
handbooks/135.pdf). small. It is much easier to calculate the life-cycle cost of a
Two factors make it difficult to use the formula for large window air conditioner than of a large laboratory building.
projects: The next two sections explain how to use a modified formula
• A lot of information has to be assembled and to analyze simple items such as window air conditioners
manipulated. and how to use software to analyze complex items such as a
• All costs must be adjusted for inflation. laboratory or office building.
LCC: Total life-cycle cost in present value (PV) dollars of a given alternative
I: Initial cost
Repl: PV capital replacement costs
Res: PV residual value (resale value, salvage value) less disposal costs
L: Desired useful life in years of the building or system
E: Total energy cost (PV)
W: Total water costs (PV)
OM&R: Total operating, maintenance, and repair costs (PV)
O: Total other costs, if any—contract administration costs, financing costs,
employee salaries and benefits, and so forth (PV)
3
Life-Cycle Cost Analysis Works for Small Decisions
L
ife-cycle cost comparisons for building components
or equipment (figure 3) can be accomplished
relatively easily if there are no significant financing
costs or differences in procurement costs among the options.
The following information is needed for a simple life-
cycle cost analysis:
• The initial cost of each system.
• The expected life of each system (usually years).
• The expected average yearly maintenance, operation,
and repair costs of each system.
• Maintenance and repair costs that occur only every several
years, averaged over the time between occurrences. Figure 3—Life-cycle cost analysis works well for small decisions, such as
• Operation, including fuel, electricity, and water use costs finding the most cost-effective replacement for the air conditioning system
at the assistant ranger’s house at the Bessey Ranger Station (Nebraska
as well as ongoing costs such as operator wages, regular National Forest in the Rocky Mountain Region).
cleaning or restocking, etc.
• Any salvage or other residual value you will get out of the
system when you have finished using it in this application. system, you may be able to get close enough using estimated
operation and maintenance costs.
Assembling this information can be a challenge. If the Choose a time period for the analysis and figure the cost
information isn't available in the manufacturer's literature or for each system over that time period. The easiest time period
easily available records, you may need to call the manufacturer to use is the shorter of:
or supplier or ask knowledgeable people what their experience • The number of years the most durable system is
has been. The reliability of the results depends directly on the expected to last
quality of the input. If you have enough experience with the • The number of years you expect to use the structure
4
Simple Formula for Calculating Life-Cycle Cost
Once you assemble all the information and choose your time period, plug the information
for each of the systems into this formula:
In case your memory of high school algebra is a little fuzzy, remember to multiply L times
OM&R first, then add and subtract the factors in the order the equation is written. The result for
each system is its life-cycle cost (LCC). You can compare the life-cycle costs of the different
systems to learn which system is most cost effective over the time period you have chosen.
5
Life-Cycle Cost Analysis Works for Big Decisions
A
n LCCA that evaluates large systems or whole • eVALUator, developed by Energy Design Resources
buildings usually considers so much information • Building Life-cycle Cost (BLCC), developed by the
that assembling and tracking all of it becomes National Institute of Standards and Technology (NIST)
a major undertaking. Adding to the complexity, LCCA
normally is used to compare the cost of several alternative Both of these software tools were evaluated by using
designs of buildings and building systems (figure 4). data to build a 1,400 square-foot single family residence with
Fortunately, several public domain programs and many both contractor standard construction and sustainable design
proprietary programs are available to help with LCCA. options for a 25-year analysis period. The sustainable design
version of this house was built in Missoula, MT, in 2003
(figure 5). Evaluation of the sustainable design option was
based on actual costs of materials and actual consumption
of water, electricity, and natural gas. Estimated costs of
materials and consumption of water, electricity, and natural
gas were used for the contractor standard construction option.
Actual utility rates and financing costs were used for both
options. Identical information was used for each software
tool. Both software programs returned roughly equivalent
information. They both showed life-cycle cost savings over 25
years of around $29,000, simple payback in about 10 years,
and adjusted internal rate of return of around 11 percent for
the sustainable design option. You can see the results in the
“Example LCCA Reports” section at the end of this document.
6
Both computer programs require that the user have Advantages
enough knowledge of building design and performance • eVALUator allows lots of flexibility and an unlimited
to recognize the factors that will be important to get an range of building life. It allows occupant productivity, loan
accurate result. This should not be a problem for experienced rate and term, discount rate, and capitalization rate inputs.
engineers and architects, but might present problems for • It's easy and quick to input the information needed for
others. As with the basic LCCA formula explained above, analysis.
initial cost, expected useful life, average yearly operation, • It allows using different inflation rate assumptions
maintenance, and repair costs; expected major component for general costs, electricity costs, natural gas costs,
life and replacement costs; and salvage or other residual operation and maintenance costs, capital purchase, and
value must be determined. As explained in the “Other lease income.
Software Tools for Life-Cycle Cost Analysis” section, other • It automatically performs an uncertainty analysis and
software tools are available to help calculate these costs, expresses bottom-line numbers with an associated
particularly the energy costs of different components. "uncertainty band."
The basic features, advantages, and limiting factors • Reports are straightforward, easy to configure for side-
of the eVALUator and Building Life-Cycle Cost (BLCC) by-side comparison of alternatives, and easy to read. A
programs are explained below. sample eVALUator comparative analysis is included in
Based on the comparison and use of both of these the “Example Life-Cycle Cost Analysis Reports” section
programs, eVALUator would be better for most Forest at the end of this report.
Service life-cycle cost analyses, especially those for less
complex buildings. It’s quick, it’s easy, it’s accurate, and it Limiting Factors
provides enough information to enable informed decisions. • The reports are not very detailed.
For projects where more detailed information on energy use • When you try to install this program, it tells you it's
or financing is needed, BLCC would be better. downloading to a certain folder on the "C" drive, but it
actually hides the executable (.exe) file in C:\Documents
and Settings\(your shortname)\Local Settings\Temp\, and
eVALUator names it "setup.exe."
The eVALUator is a Microsoft Windows-based • The program was created in 2000, so it tries to install
program that was developed to calculate the life-cycle old versions of some software that the program needs
benefits of investments that improve building design. It to run—Forest Service users will almost certainly have
analyzes the financial benefits of buildings that reduce newer versions on their computers already, so they must
energy cost, raise employee productivity, and enhance users’ be careful to keep the newer versions when queried
satisfaction. eVALUator software is available at http://www. during setup. If the newer versions are not retained, the
energydesignresources.com/Resources/SoftwareTools/ older versions will overwrite them and foul up other
eVALUator.aspx. Before downloading the software, most applications. The eVALUator program will work just
Forest Service employees will need to get temporary fine with the newer versions.
administrative rights to install new software by going to • No residential uses are among the drop-down menu for
http://gadgets.ds.fs.fed.us/EUTools/ad_promote.asp and building types, but "Other" works just fine.
following the instructions. • Lots of drop-down menu locations are available for
California. Although the only choice outside California
is "national average," the program works fine for
facilities in the rest of the country.
7
Building Life-Cycle Cost • Reports provide good detail on payback time, energy
The Building Life-Cycle Cost (BLCC) program was consumption (in dollars, kilowatt hours, therms, and
designed to analyze energy and water savings, but it can British thermal units), and emissions. A sample BLCC
accommodate any life-cycle cost analysis. The latest version comparative analysis is included in the “Example LCCA
of BLCC—BLCC5—is programmed in Java with an XML Reports” section at the end of this report.
file format. The user's guide is part of the BLCC5 Help • Reports are straightforward, easy to read, and easy to set up.
system. BLCC 5.3-07 contains the following modules:
• Federal Energy Management Program (FEMP) Analysis, Limiting Factors
Energy Project—For energy and water conservation and • Life-cycle costs can't be computed for longer than 25 years.
renewable energy projects under the FEMP rules based • The financing information for the “Federal Analysis,
on 10 Code of Federal Regulations 436. Financed Project” option must be entered in a format
• Federal Analysis, Financed Project—For Federal projects that is not intuitive to people who aren't normally
financed through Energy Savings Performance Contracts involved in financial calculations.
(ESPC) or Utility Energy Services Contracts (UESC) as • Employee productivity is not a component of this software.
authorized by Executive Order No. 13123 (June 1999).
• OMB Analysis—For projects subject to OMB Circular
A-94 for Federal Government construction projects that are Other Software Tools for Life-Cycle Cost
not related to energy and are not water resource projects. Analysis
• Three programs with special features specifically Software tools are available that can support or
required by the U.S. Department of Defense. supplement LCCA. Most of these programs concentrate
on energy efficiency and will perform a limited LCCA for
BLCC software is available at http://www1.eere. energy use. The data from these programs can be entered
energy.gov/femp/information/download_blcc.html. Before into eVALUator or BLCC to produce more accurate life-cycle
downloading the software, most Forest Service employees cost comparisons.
will need to get temporary administrative rights to install Options for heating, ventilating, air conditioning,
new software by going to http://gadgets.ds.fs.fed.us/EUTools/ windows, insulation, lighting, shading, appliances, office
ad_promote.asp and following the instructions. BLCC 5.3- equipment, water heating, building orientation, and roofing
08 became available just before this report was printed. It can be evaluated with software tools. Unfortunately, no single
contains updated energy price indexes and discount factors, tool covers everything. An alphabetical list, brief summaries,
but is otherwise the same as BLCC 5.3-07. and Web addresses of many of these software tools are
available in the “Life-Cycle Cost Analysis Software” section
Advantages at the end of this report.
• This program is very flexible. It allows you to consider The Northern Region has developed a spreadsheet for
as much or as little detail as you need for the level of calculating life cycle costs. Forest Service and Bureau of Land
analysis and for the building size and type. Management employees can access the spreadsheet at http://
• It appears to be the standard, at least for Federal fsweb.mtdc.wo.fs.fed.us/toolbox/fmp/documents/lcca.xls.
Government work.
• It calculates life-cycle costs, net savings, savings-to-
investment ratio, adjusted internal rate of return, and
payback for any alternative relative to a base case.
8
Life-Cycle Assessments Can Help You Make Sustainable Choices
W
hile a life-cycle cost analysis is a financial of the product or service. This starts with production of
tool, a life-cycle assessment evaluates the raw materials and includes manufacture, distribution, use,
environmental costs associated with a product, disposal, transportation, and the energy used by the product,
process, structure, or activity by identifying energy and process, structure, or activity. This is sometimes referred
materials used and wastes released to the environment. In to as a "cradle-to-grave" (figure 6) assessment. The sum
this context, the term “life cycle” means the assessment of the cradle-to-grave environmental costs is the life-cycle
considers everything that goes into or is produced as a result environmental cost of the product.
Cradle-to-Grave
Life Cycle of Building Products
Disposal Construction
Demolition Occupancy/maintenance
Figure 6—In a cradle-to-grave life cycle, building materials are used once and then discarded.
9
Some products can be partly or completely reused or it has already been recycled. Manufacturing new cans
remanufactured into new products after they have served from recycled cans cuts energy use by 95 percent, making
their original purpose. In these cases, the cycle is often aluminum cans a cradle-to-cradle product. Unfortunately,
referred to as "cradle-to-cradle" (figure 7). An example of only about half of the aluminum cans produced in the United
a cradle-to-cradle product is an aluminum beverage can. States are recycled, so there's still some "grave" in aluminum
Aluminum production is extremely energy intensive, but can production.
aluminum is fully recyclable no matter how many times
Cradle-to-Cradle
Life Cycle of Building Products
Manufacturing
Recycling/reuse Construction
Deconstruction/renovation Occupancy/maintenance
Figure 7—Building materials that are no longer needed for their original purpose are recycled or reused in a cradle-to-cradle life cycle.
10
To illustrate the life-cycle assessment process, consider plastic polymer. Raw materials mined or grown, land uses,
a comparison of the environmental costs of beverage noise generation, releases of pollutants to the air, water, or soil,
packaging made of glass, aluminum, and plastic. Cradle-to- and all other ecological costs are evaluated and compared.
cradle assessments for all three options must be performed. Identifying all these environmental costs is difficult
For glass bottles, this would include mining of silica and and time consuming. To ease the process, several analysis
other minerals, proportional costs of recycled content, bottle programs have been developed. An alphabetical list, brief
production, bottling, transport, and disposal or recycling. For summaries, and Web addresses of some of these software
aluminum, the assessment would include mining bauxite, tools are available in the “Life-Cycle Assessment Software”
production of aluminum (including proportional costs section at the end of this report. Each program provides
of recycled content), production of cans, filling the cans, different advantages, levels of detail, weights for different
transport, and disposal or recycling. For plastic bottles, the sorts of environmentally detrimental factors, and ability to
assessment would include raw oil production, oil refining, provide meaningful output for nonstandard materials and
proportional costs of recycled content, polymer production, assemblies.
bottle production, bottling, transport, and disposal or Although life-cycle assessment is not required for Forest
recycling. The analysis must include proportional life-cycle Service structures, it can provide valuable information that
costs of products that go into the manufacture or use of each can help decisionmakers choose more environmentally
product, such as catalysts needed during the production of the friendly materials and systems.
Summary
L
ife-cycle cost analysis is not as difficult as it might
appear to be. By using the simplified formula
explained in this report for small decisions and
the eVALUator or BLCC and supplemental software for
large decisions, Forest Service decisionmakers will have
the financial information they need to make responsible
maintenance, improvement, and construction choices.
Because decisions based on life-cycle cost effectiveness
almost always lead to decisions to purchase more durable and
energy-efficient products and systems (figure 8), LCCA is
good for the environment. In addition, life-cycle assessment
software can be used to compare the environmental effects
of different systems and products, leading to better informed
choices about environmentally friendly materials and systems.
Figure 8—The durable wood walls and slate floors of the visitor
information center and entry to the McKenzie River Ranger Station
although initially expensive, will stand up to the demands of high visitor
use far longer than less durable materials (Willamette National Forest,
Pacific Northwest Region).
11
Life-Cycle Cost Analysis Software
12
Energy-10 (http://www.nrel.gov/buildings/energy10.html) The Life-Cycle Cost Analysis Model (http://www.green.ca.gov/
from the National Renewable Energy Laboratory helps LCCA/default.htm) was developed by the State of California
architects and building designers quickly identify the most to determine the cost effectiveness of implementing energy
cost-effective energy-saving measures for small commercial conservation measures using the results of energy audits
and residential buildings. It integrates daylighting, passive or energy feasibility studies. This Excel spreadsheet has
solar heating, and low-energy cooling strategies with energy- information specific to California (details about energy costs,
efficient shell design and mechanical equipment. It enables California energy tariffs, peak/part-peak/off-peak rates, etc.)
designers to make good decisions about energy efficiency already filled in, although the information can be modified.
early in the design process. The model provides detailed analysis of energy cost savings
and implementation costs.
EnergyPlus (http://www.eere.energy.gov/buildings/energy
plus/) is a DOE building energy simulation program for Radiance (Windows version at http://radsite.lbl.gov/deskrad/
modeling a building’s heating, cooling, lighting, ventilating, and Unix version at http://radsite.lbl.gov/radiance/) is a tool
and other energy flows. It is based on the most popular for lighting design and rendering, developed by the DOE
features and capabilities of DOE-2, but it includes simulation and the Swiss Federal Government through the Lawrence
capabilities such as time steps of less than an hour, modular Berkeley National Laboratory. It quantitatively renders
systems, HVAC zone simulation, multizone air flow, thermal daylight in building models to provide graphic displays
comfort, and photovoltaic systems. and luminance numbers that can be used to determine how
much artificial lighting is needed in a room or how room
eQUEST (http://www.energydesignresources.com/resource/130) configuration could be changed to eliminate the need for
was developed by Energy Design Resources to perform artificial light.
a detailed analysis of state-of-the-art building design
technologies without requiring extensive experience in the The Target Finder (http://www.energystar.gov/index.
"art" of building performance modeling. It combines a building cfm?c=new_bldg_design.bus_target_ finder) is an EPA
creation wizard, an energy efficiency measure wizard, and energy modeling tool that helps architects and building
a graphical results display module with a DOE-2 building owners set aggressive, realistic energy targets and rate a
energy-use simulation program. Results are displayed in tables commercial building’s estimated energy use, based on the
and graphs. eQUEST appears to be one of the most popular EPA's survey of existing buildings and climate by ZIP code.
energy-use simulation programs, probably because of its ability Site and source energy calculations are provided for both
to display energy consumption over time using colorful, easy- energy use intensity and total annual energy.
to-read graphs and tables.
The Unitary Air Conditioner Cost Estimator (http://www1.eere.
The Financing Alternatives Comparison Tool (http://epa.gov/ energy.gov/femp/procurement/eep_unitary_ac_calc.html)
owm/cwfinance/cwsrf/fact.htm) is a U.S. Environmental compares high-efficiency rooftop air conditioners to standard
Protection Agency (EPA) financial analysis tool that helps equipment in terms of life-cycle cost. This estimator,
identify the most cost-effective method to fund a wastewater developed by the DOE, accounts for local climate and partial
or drinking water management project. This tool produces load as well as full load efficiencies. The Web-based, menu-
a comprehensive analysis that compares various financing driven format is easy to learn and use. It quickly estimates
options for these projects by incorporating financing, life-cycle cost, simple payback, return on investment, and
regulatory, and other important costs. the savings-to-investment ratio based on user-specified air
conditioning requirements and building use patterns. Results
are easily downloaded as graphic files for further analysis or
for presentations.
13
Commercial Software software. Green Building Studio has tools that help evaluate
building designs for energy consumption and carbon footprints.
Ecotect (http://squ1.com/) is a whole-building simulator
from Square One Research that “combines an interactive PowerDOE (http://www.doe2.com/Download/Docs/D22PD
building design interface and 3D modeler with a wide range Sum.pdf) is a commercial interface to DOE-2 (see the “Free
of environmental analysis tools for a detailed assessment Software” section) that uses graphics, building images, and
of solar, thermal, lighting, shadows and shading design, models to both organize data input and display building energy
energy and building regulations, acoustics, air flow, cost, and use for heating, cooling, lighting, ventilating, and so forth.
resource performance of buildings at any scale.” It works
with Square One’s CAD engine, or you can import building The Virtual Environment (http://www.iesve.com/content/
information from AutoCAD. default.asp?page=home_Our%20Software) can act as a
plugin to AutoCAD’s Revit, calculating heating and cooling
Green Building Studio (http://usa.autodesk.com/adsk/servlet/ind loads. Developed by Integrated Environmental Solutions, Ltd.
ex?siteID=123112&id=11179531) is one of the many interfaces This plugin can also be used to model several other systems
to DOE-2. It also is compatible with other energy-analysis from within Revit.
14
Example Life-Cycle Cost Analysis Reports
Initial Pro-Forma
Loan term 15 yr.
Loan interest rate 4.8%
Salary costs $ / yr.
Productivity improvement .0%
Baseline Alternative Change
Project Cost $200,000 $210,000 $10,000
% Financed 45.0% 45.0%
Up-front Equity $110,000 $115,498 $5,498
Annual Debt Service $8,554 $8,982 $428
Non-Energy Expenses $2,503 $1,499 -$1,004
Energy Expenses $2,036 $1,039 -$997
Productivity Impacts $0 $0 $0
Savings-to-Investment Ratio 4
Adj. internal rate of Return 11.0%
15
NIST BLCC 5.3-07: Comparative Analysis
Consistent with Federal life-cycle cost methodology and procedures, 10 CFR, part 436, subpart A
General Information
File Name: C:\Program Files\BLCC5\projects\occupant.xml
Date of Study: Wed Nov 14 14:57:54 MST 2007
Project Name: Occupant
Project Location: Montana
Analysis Type: FEMP Analysis, Energy Project
Analyst: Occupant
Base Date: November 1, 2007
Service Date: November 1, 2008
Study Period: 25 years 0 months (November 1, 2007, through October 31, 2032)
Discount Rate: 5%
Discounting Convention: End-of-Year
16
Savings-to-Investment Ratio (SIR) SIR = 3.87
Adjusted Internal Rate of Return AIRR = 10.80%
17
Notes
18
About the Author
Kathleen Snodgrass came to MTDC as a project leader in 2001. She graduated from Washington State University in
1974 with a bachelor of science degree in architectural studies, then spent about 10 years in highway design and construction
with the Idaho Division of Highways. She began her career with the Forest Service in 1984. Snodgrass worked in facilities,
landscape architecture, land line, and general engineering on the Nez Perce National Forest for 10 years and was the forest’s
facilities architect for about 7 years before coming to MTDC.
Library Card
Snodgrass, Kathleen. 2008. Life-cycle cost analysis for buildings is easier than you thought. Tech. Rep. 0873–2839–
MTDC. Missoula, MT: U.S. Department of Agriculture Forest Service, Missoula Technology and Development Center. 18 p.
Life-cycle cost analysis is a structured method of determining the entire cost of a structure, product, or component
over its expected useful life by adding the cost of operating, maintaining, and using it to the purchase price. By using
the simplified formula explained in this report for small decisions and the free software identified in this report for large
decisions, Forest Service decisionmakers will have the financial information they need to make responsible decisions about
replacing or constructing facilities. This report also includes a brief discussion of life-cycle assessments, which assess all of a
product or service’s environmental costs throughout its lifetime.
Keywords: A-94, ASTM, BLCC, buildings, climate, cradle, design, energy, environment, equipment, eVALUator,
facilities, financial, LCCA, life-cycle assessments, maintenance, operating, performance, repair, replacement, software,
sustainable, systems, value, water
Additional single copies of this document may be ordered For additional information about life-cycle cost analysis,
from: contact Kathie Snodgrass at MTDC:
USDA Forest Service Phone: 406–329–3922
Missoula Technology and Development Center Fax: 406–329–3719
5785 Hwy. 10 West E-mail: [email protected]
Missoula, MT 59808–9361
Phone: 406–329–3978 Forest Service and Bureau of Land Management employees
Fax: 406–329–3719 can search a more complete collection of MTDC’s
E-mail: [email protected] documents, CDs, DVDs, and videos on their internal
computer networks at:
Electronic copies of MTDC’s documents are available on http://fsweb.mtdc.wo.fs.fed.us/search/
the Internet at:
http://www.fs fed.us/eng/t-d.php
Cover figure—The Interagency Helibase in Jackson Hole was built cooperatively by the
Bridger-Teton National Forest of the Intermountain Region and Grand Teton National Park.
Life-Cycle Cost Analysis
United States
Department of
Agriculture
Forest Service
Technology &
for Buildings Is Easier
Than You Thought
Development
Program
7300–Facilities
August 2008
0873–2839–MTDC