Life Cycle Cost Analysis in Energy Projects
Article 1
The Costs and Financial Benefits of Green Buildings
Life Cycle Costing is a very powerful tool for cost comparison between different green building design alternatives with similar services.
Green buildings cost more today, however offer benefits for the entire Life Cycle of the building
The Costs and Financial Benefits of Green Buildings Ensure Cost-Effective Construction
Life Cycle Assessment is a very popular tool in infrastructure, engineering, automobiles and such other industries to assess product options that have similar service capabilities. However, Life Cycle Costing is a much sharper and more specific assessment that lets designers, builders and owners into the decision-making loop to evaluate the benefits of different design structures, materials used at each stage of a proposed new building or while renovating an existing structure.
Green Technology and Materials Cost More
Building designs and materials for sustainable buildings are comparatively more expensive than non-green or conventional buildings. The trade-off between higher initial costs of construction incorporating green schematic designs versus less expensive but potentially high-paying designs is close to 2%. In terms of money, this translates into 1 million dollars savings for every five million dollar building project in the country today.
Green Technology and Practices Offer Benefits for the Entire Life Cycle of the Building
Moreover, with greener buildings you are not only gaining substantially because of the overall life cycle cost benefits but are already compliant with the likely future greener building standards. The coming years buildings will have to be more sustainable and will require greener practices. By designing and building structures that are future-green, you will definitely lower your liabilities in terms of green taxes etc.
Are Green buildings worth the additional initial costs?
There has been considerable research and analysis of the costs and benefits of green buildings. Several tools for assessing the costs of the green structural designs, green materials and greener technology prove that in a state such as California , the greener buildings will cost an additional 2% for every square feet. If conservative construction costs of commercial buildings are considered as $150 -$250 for every square feet, the green buildings are going to cost an additional $3 to $5for each square feet.
Greener buildings long term socio-economic benefits
Adopting green buildings for higher sustainability definitely involves higher costs. Studies have proven that the global degradation is due to haphazard consumption of natural resources and most significantly built structures. GHGs, degradation of forest cover have increased to meet the greater necessities for structures. Therefore, greener buildings are essential in the given environment al framework.
The ultimate goal of greener buildings is to minimize Green House Gases (GHG) emissions, energy consumptions and other common toxins, which will further deplete the environment. The aim of green buildings is to make structures, which sustain to last a life cycle without contributing to further environmental degradation. You gain substantially on all the ‘green premiums’ during the end of the life cycle in comparison to higher investment stage at the start of the green life cycle of buildings. Considering the benefits of minimal energy emissions, effective water management and other multiple greener technologies prove that the initial costs are more beneficial.

Article 2
Average Life Cycle of Building Components
Life Cycle Cost Analysis power tool to estimate life cycles of building components and implement design features based on their capabilities
Average life cycles of the building components will determine overall costs of replaceable Units
Average Life Cycle of Building Components
Determining the life cycle of building components involves detailed evaluation of host of materials, components devices used in any facility to determine their average life cycles. Adopting the economic evaluation method will ensure that the detailed analysis is verifiable and quantified. Incorporating the average life cycle costs at the design stage will ensure that under the given constraints which of the building components are ideally suited for the entire life cycle of such a building.
Average life cycle of some of the common building components
A building is usually evaluated for its components in terms of building enclosures, roofing system, material costs of windows, interior products, plumbing systems, electric systems and heating, ventilation and air conditioning.
The Building enclosure made from Masonry, steel frames systems would be an average of 40 to sixty years for exterior masonry and a life cycle of 35years for wood framing systems used in masonry exteriors. The roofing system is crucial to the overall costs of a building. The average life cycle of asphalt system could range between ten to twenty five years while elastomeric systems would include an average life cycles of fifteen to thirty years. However, pitched roof shingles using asphalt had longer average life cycles of twenty-five years and metal around fifty years. Clay tiles have the maximum average life cycles of seventy years and are therefore the most recommended for roofing systems.
Windows/shutters with metal windows have average life cycles of fifty years. Revolving doors have a life time of a mere fifteen years and Overhead doors with maximum life cycle costs of forty years. Perhaps building components used for interior purposes have minimum life cycles and are a repetitive cost in most cases, paint, vinyl flooring etc have brief average life cycle of around five years and will require to be replaced at least four to five times in a building life cycle. Paint is very vital recurring cost and has average life cycles of ten to three years depending on the type of paints.
Plumbing systems such as the copper piping have average cost lives of twenty to thirty years depending on the brand and quality. So on an average a school building would be considered to have a life-cycle of fifty to sixty years then the overhauling of copper components would occur approximately two times. Other plumbing systems that are smaller like water heaters, pumps have average life cycles of ten to twenty years. In the Heating and air conditioning section of building components, the average life cycle of boiler is about twenty years while most other components including electric systems display average life cycles of twenty to thirty years.
Life cycle costing critical to assessing average life of components and recurring maintenance costs
It is critical that design professionals and facilities planners conduct detailed component based life cycle costs as part of the overall cost estimation of any construction project.

Article 3
Life Cycle Costing for Design Professionals
Designers and facility planners determine low price high-efficiency building alternative by adopting Life Cycle Costing methodology
Low Cost Effective Design and Production Alternatives for Professionals
Life Cycle Costing for Design Professionals
Professional facilities planners, design professional need to offer creative out of the box design concepts that will not only express their individual styles but also highlight their interpretation of the fundamental building concepts of space, volumes and sizes. However, professional designers are at the helm of revolutionizing the vital aspect of innovative green strategies establishing new trends and experimenting with material alternatives that are not only eco friendly but are also cost-effective to the facility owner as well as the end user or a tenant.
How do designers determine low cost production alternatives?
Theoretical analytics such as the Life Cycle Costing have proven track record in assisting planners, designers and facility owners to gain meaningful insight into feasible and strategies to optimize the green strategies in a building. At the core of the Life Cycle Costing process is the comparisons it offers in terms of economics.
LCC methods of economic evaluation
The most common is the simple payback. Here the time required for gaining back the initial investment is calculated. Minimum payback time investment is determined as most profitable. A variation of this method is the discount payback method that considers the time value.
Net Present Value or the NPV in terms of LCC determines the least value alternative where the cash flows are discount against the present value. This helps in determining the time value and helps in generating investment returns on par with market value.
Equivalent Annual cost (ECA) This method is ideal when the NPV of an option can be decimated into uniform annual cost and comparison is made in terms of the life length of the option.
Internal Rate of Return calculates the return on an investment when the values are assumed as zero at the initial point of time. The option that reflects the highest IRR is considered as a good alternative.
Net Saving is the difference when the amount invested and the income generated is noted. Choosing the best alternative with highest net saving is the ideal choice.
Federal construction investments are evaluated for feasibility based on Life cycle Cost Analysis. Perhaps the first instances of costing construction expenses by the defense forces later percolated into civilian construction segment to lower production costs of construction. At the same time evaluating which option, such as the ideal type of glazing material to be used for a given design or the HVAC system that offers optimal efficiency for the given spatial design.
Design professionals adopt LCC for localized decision making at client end
Most times designers and planners need extra inputs to convince facility owners to adopt to emerging greener strategies essentially because of the likely 2% additional charges to incorporate such design concepts. The results of such candid analysis and cost comparison will provide the designer with the right leveraging power to press for greener strategies for the buildings.

Article 4
Life Cycle Analysis Help Determine Value of Green Strategies
Life Cycle analysis helps understand the ROI on green strategies, energy savings and the cost of gaining LEED credit
Early Life Cycle Analysis helps in determining the cost-effective greener strategies
Life Cycle Analysis Help Determine Value of Green Strategies
Leadership in Energy and Environmental Design (LEED) offers certification to sustainable buildings depending on the degree of compliance it has to LEED guidelines and benchmarks. However, when the need is to assess the viability of green strategies and establish the value of each LEED does not offer statistical and analytical tools. The right tool to use for arriving at the value of green strategies is the Life Cycle Cost Analysis and Building Information Modeling.
Powerful Building Information Modeling ensures effective lifecycle cost analysis
Creating 3D virtual model of the building structure and engineering information offers the right evaluation background for evaluating the green strategies because the software allows easy scaling of the different parameters for assessment. Therefore, qualitative cost effectiveness and value of each life cycle is determined with the convergence of BIM and Life Cycle Cost Analysis.
Green strategies for evaluation
Studies using the above tools the following green strategies prove to be invaluable for sustainable buildings.
Solar Photovoltaic Panels introduced by one of the leading manufactures have thin-films for panels and considerably reduced the standard installation cost from $11.50/W to $6/W.
Wind Turbines with Vertical –axis are highly recommended for urban environments as they capture rising turbulent wind patterns effectively. However, the horizontal-axis turbines though are less expensive and offer the same overall efficiency. Locating the turbine in the most effective position on-site is crucial to its performance.
Glazing windows with low conductive heat values but allowed considerably larger quantities of light to enter the building, were found to be more effective. The heating loads dropped due to solar gains and the cooling load far outweighed the cooling load thereby saving energy.
Water cooled chillers when installed in large buildings well be effective and perhaps not so effective for smaller buildings as the installation and maintenance costs will far outrun the utility savings of $4,500/yr as well the 20% more life cycle.
Boilers performance is optimized when they are placed in the right water temperature delta. Typical costs should range at $12.10 per MBH and 83% efficiency. The 93% efficiency boilers of some brands are known to cost $15 per MBH with a payback term of 14 years.
Life cycle costing will define value of greener strategies
It is difficult for a facility owner to comprehend the costs of greener strategies proposed by the building design team. However, a detailed Life Cycle Costing Analysis will explicitly provide all the required information and the statistics to prove the true value of greener strategies as being more implicit in terms of lowered GHG emissions, better energy usage than economical.
Moreover, detailed analysis using additional tools will help in determining which type of green technology is apt for the individual building depending on the geographic location and the climate of the site of construction. Green strategies are the technology winners for tomorrow’s buildings!

Article 5
The Benefits of Life Cycle Costing in Buildings
Assessing buildings for their costs using the Life cycle costing methodology has promoted migration to sustainable buildings and better ratings
Better rating buildings important for facility owners
How can you benefit from Life Cycle Costing of Buildings?
Life Cycle Costing method is a very powerful tool to help you decide between an economic design and the most cost-effective building material. This could range from which waste water management system or air cooling method (HVAC or other technologies) would have long term benefits in terms of lesser energy consumption, lower maintenance costs, etc. These are critical design concepts, where a more advanced and sophisticated technology will have long term benefits for you (and will comply to lesser emissions standards in the future) as well as lower maintenance costs in long term use. These will ensure that you migrate towards a greener and a more LEED compliant building.
Relevance of green buildings in today’s context
Leadership in Energy and Environmental Design (LEED) rates buildings according to the degree of green strategies adopted by the building. Today it is to the advantage of both the owners and the tenants to use high LEED rated facilities. For owners Life Cycle Costing ensures that they will invest in the right technologies to ensure that they are buffered against the main drivers of greener strategies in facilities construction. Water, energy resources are known to drive sustainability of buildings and by adopting right cooling devices such as water-chilled coolers for large-scale buildings, glazed windows with higher light input in the end allows a building to use lesser energy resources.
One component of the Life Cycle Costing is break-even analysis and sensitivity analysis. The break-even analysis is very important to the owner and the decision makers because right at the development stage itself, it is possible to determine which input will help the project to break even and at what cost. It will also indicate the least benefit from an input or green strategy that will break even.
The life cycle cost analysis benefits the owners, clients and society at large. Because with every well documented and researched LCC, it is setting the standards for buildings that follow in that area and help in improving and improvising on the existing design structures and technologies to show greater benefits of greener buildings.
Achieving greener building goals made easy with Life Cycle Costing
The ultimate goal of greener buildings is to minimize emissions, energy consumptions and other common inputs that will further destabilize the environment. The aim of green buildings is to make structures, which sustain to last a life cycle without contributing to further environmental degradation.
Life Cycle Costing is a very complicated and long drawn analytic process that establishes in clear terms data, information, projections of costs of every parameter used for construction of building. Though a rough calculation on the back of an envelope could suffice, it is the professional input after a LCC that will provide the right framework to make critical decisions. There is a social responsibility on each to ensure greener buildings and Life Cycle Costing is an advanced tool to achieve the goals.