This document provides a summary of energy conservation opportunities (ECOs) for air conditioning auditors. It outlines the structure and categories of ECOs, which include improvements to the building envelope and reductions in internal loads, upgrades to the HVAC plant, and improved operation and maintenance practices. Specific ECOs are listed in tables under each category with descriptions. The objectives of the guide are to help building owners detect energy consumption trends in air conditioning systems and take appropriate actions to reduce usage through behavioral, operational or investment-based changes.

1. Technical guides for owner/manager of an air conditioning
system: volume 5
Energy Conservation Opportunities
(ECOs) for Air Conditioning auditors

2. Team
France (Project coordinator)
Armines - Mines de Paris
Austria
Slovenia
Austrian Energy Agency
University of Ljubljana
Belgium UK
Université de Liège Association of Building
Engineers
Italy BRE
Politecnico di Torino (Building Research
Establishment Ltd)
Portugal
University of Porto Welsh School of
Architecture
Eurovent-Certification
Authors of this volume
Marco MASOERO (Politecnico di Torino, Italy)
Chiara SILVI (Politecnico di Torino, Italy)
The sole responsibility for the content of this publication lies with the authors. It does not represent the opinion of
the European Communities. The European Commission is not responsible for any use that may be made of the
information contained therein.
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3. Objectives of the guide
The objectives of that guide are mainly to help building owners detecting drifts in energy
consumptions of their air-conditioning plant. However, building owners have to be conscious of
energy consumptions of their plants and even require reference indicators allowing them to
launch actions. These actions can then be of several kinds: behavioral changes, operational
changes (adjustments), investments in punctual replacements or in a complete retrofit. Finally,
as soon as actions have been carried out, checking energy savings generated can be useful to
judge about the payback time of these investments. In this document finally we have a detailed
look at some actions proposed in the ECOs list and in Annex we report most common economic
methods to evaluate the economic interest of a renovation project or to compare different project
in order to choose the most interesting following different criteria.
1. Structure of the ECO List
The main purpose of an Energy Audit is to identify a suitable set of actions that should lead to
significant energy savings, within the specified operational and financial constraints. In the
Preliminary Audit phase, a set of candidate ECOs is identified The ECOs are selected from a list
in which they are grouped into the following categories and subcategories:
E. ENVELOPE AND LOADS
E.1 Solar gain reduction / Daylight control improvement
E.2 Ventilation / Air movement / Air leakage improvement
E.3 Envelope insulation
E.4 Other actions aimed at load reduction
P. PLANT
P.1 BEMS and controls / Miscellaneous
P.2 Cooling equipment / Free cooling
P.3 Air handling / Heat recovery / Air distribution
P.4 Water handling / Water distribution
P.5 Terminal units
P.6 System replacement (in specific limited zones)
O. OPERATION AND MAINTENANCE (O&M)
O.1 Facility management
O.2 General HVAC system
O.3 Cooling equipment
O.4 Fluid (air and water) handling and distribution
In the “Envelope and Loads” categories, ECOs aimed at reducing the building cooling load are
listed. These ECOs may be either of the operational type, or may involve renovation work on the
building envelope. Therefore, the evaluation methods may be similar to those normally applied
either to category “O&M” or “Plant”.
“Plant” ECOs involve more or less radical intervention on the HVAC system. Their applicability
should therefore be carefully assessed both from the technical and economical standpoint.
The “O&M” ECOs include all actions that may in general be implemented in a building, HVAC
system, or facility management scheme. The costs involved by such ECOs are generally limited
3

4. if not negligible: application is therefore normally recommended, provided their technical
feasibility is assessed.
Several of the ECOs of each of the above categories may be effectively implemented with the
aid of a Building Energy Management System (BEMS). Such circumstance is highlighted in a
specific column of the ECO list.
ENVELOPE AND LOADS
BEMS
CODE ECO
control
SOLAR GAIN REDUCTION / DAYLIGHT CONTROL IMPROVEMENT
E1.1 Install window film or tinted glass
E1.2 Install shutters, blinds, shades, screens or drapes
E1.3 Operate shutters, blinds, shades, screens or drapes Y
E1.4 Replace internal blinds with external systems
E1.5 Close off balconies to make sunspace/greenhouse
E1.6 Modify vegetation to save energy
E1.7 Maintain windows and doors
VENTILATION / AIR MOVEMENT / AIR LEAKAGE IMPROVEMENT
E2.1 Generate possibility to close/open windows and doors to match climate Y/N
E2.2 Ensure proper ventilation of attic spaces Y
E2.3 Optimise air convective paths in shafts and stairwells
E2.4 Correct excessive envelope air leakage
E2.5 Roll shutter cases: insulate and seal air leaks
E2.6 Generate possibility of night time overventilation
E2.7 Add automatic door closing system between cooled and uncooled space
E2.8 Replace doors with improved design in order to reduce air leakage
ENVELOPE INSULATION IMPROVEMENT
E3.1 Upgrade insulation of flat roofs externally
E3.2 Upgrade attic insulation
E3.3 Add insulation to exterior walls by filling cavities
E3.4 Add insulation to exterior wall externally
E3.5 Add insulation to basement wall externally
E3.6 Upgrade insulation of ground floor above crawl space
E3.7 Locate and minimize the effect of thermal bridges
E3.8 Cover, insulate or convert unnecessary windows and doors
E3.9 Use double or triple glaze replacement
OTHER ACTIONS AIMED AT LOAD REDUCTION
E4.1 Reduce effective height of room
E4.2 Use appropriate colour exterior
E4.3 Employ evaporative cooling roof spray
E4.4 Provide means of reducing electrical peak demand through load shedding Y
E4.5 Replace electrical equipment with Energy Star or low consumption types
E4.6 Replace lighting equipment with low consumption types
E4.7 Modify lighting switches according to daylight contribution to different areas
E4.8 Introduce daylight / occupation sensors to operate lighting switches Y
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5. E4.9 Move equipments (copiers, printers, etc.) to non conditioned zones
PLANT
BEMS
CODE ECO
control
BEMS AND CONTROLS / MISCELLANEOUS
P1.1 Install BEMS system
P1.2 Define best location for new electrical and cooling energy meters
P1.3 Modify controls in order to sequence heating and cooling Y
P1.4 Modify control system in order to adjust internal set point values to external Y
climatic conditions
P1.5 Generate the possibility to adopt variable speed control strategy Y
P1.6 Use class 1 electrical motors
P1.7 Reduce power consumption of auxiliary equipment Y/N
COOLING EQUIPMENT / FREE COOLING
P2.1 Minimise adverse external influences (direct sunlight, air flow obstructions, Y
etc.) on cooling tower and air cooled condenser (AHU, packaged, split,
VRF systems)
P2.2 Reduce compressor power or fit a smaller compressor
P2.3 Split the load among various chillers
P2.4 Repipe chillers or compressors in series or parallel to optimise circuiting
P2.5 Improve central chiller / refrigeration control Y
P2.6 Replace or upgrade cooling equipment and heat pumps
P2.7 Consider feeding condenser with natural water sources Y
P2.8 Apply evaporative cooling Y
P2.9 Consider using ground water for cooling Y
P2.10 Consider indirect free cooling using the existing cooling tower (free chilling) Y
P2.11 Consider Indirect free cooling using outdoor air-to-water heat exchangers Y
P2.12 Consider the possibility of using waste heat for absorption system Y
P2.13 Consider cool storage applications (chilled water, water ice, other phase Y
changing materials)
P2.14 Consider using condenser rejection heat for air reheating Y
AIR HANDLING / HEAT RECOVERY / AIR DISTRIBUTION
P3.1 Reduce motor size (fan power) when oversized
P3.2 Relocate motor out of air stream
P3.3 Use the best EUROVENT class of fans
P3.4 Use the best class of AHU
P3.5 Consider applying chemical de-humidification
P3.6 Apply variable flow rate fan control
P3.7 Consider conversion to VAV
P3.8 Exhaust (cool) conditioned air over condensers and through cooling towers Y
P3.9 Introduce exhaust air heat recovery Y
P3.10 Consider applying demand-controlled ventilation Y
P3.11 Generate possibility to increase outdoor air flow rate (direct free cooling)
P3.12 Replace ducts when leaking
P3.13 Modify ductwork to reduce pressure losses
P3.14 Install back-draught or positive closure damper in ventilation exhaust Y
system
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6. WATER HANDLING / WATER DISTRIBUTION
P4.1 Use the best class of pumps
P4.2 Modify pipework to reduce pressure losses
P4.3 Convert 3-pipe system to 2-pipe or 4-pipe system
P4.4 Install separate pumping to match zone requirements Y
P4.5 Install variable volume pumping Y
TERMINAL UNITS
P5.1 Consider applying chilled ceilings or chilled beams
P5.2 Consider introducing re-cool coils in zones with high cooling loads
P5.3 Increase heat exchanger surface areas
P5.4 Consider displacement ventilation
P5.5 Install localised HVAC system (in case of local discomfort) Y
SYSTEM REPLACEMENT (IN SPECIFIC LIMITED ZONES)
P6.1 Consider water loop heat pump systems Y
P6.2 Consider VRF (Variable Refrigerant Flow) systems
O&M
BEMS
CODE ECO
control
FACILITY MANAGEMENT
O1.1 Generate instructions (“user guide”) targeted to the occupants
O1.2 Hire or appoint an energy manager
O1.3 Train building operators in energy – efficient O&M activities
O1.4 Introduce an energy – efficient objective as a clause in each O&M contract
O1.5 Introduce benchmarks, metering and tracking as a clause in each O&M
contract, with indication of values in graphs and tables
O1.6 Update documentation on system / building and O&M procedures to
maintain continuity and reduce troubleshooting costs
O1.7 Check if O&M staff are equipped with state – of – the – art diagnostic tools
GENERAL HVAC SYSTEM
O2.1 Use an energy accounting system to locate savings opportunities and to Y
track and measure the success of energy – efficient strategies
O2.2 Shut off A/C equipments when not needed Y
O2.3 Shut off auxiliaries when not required Y/N
O2.4 Maintain proper system control set points Y
O2.5 Adjust internal set point values to external climatic conditions Y
O2.6 Implement pre-occupancy cycle Y
O2.7 Sequence heating and cooling Y
O2.8 Adopt variable speed control strategy Y
COOLING EQUIPMENT
O3.1 Shut chiller plant off when not required Y
O3.2 Sequence operation of multiple units Y
O3.3 Operate chillers or compressors in series or parallel
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7. O3.4 Track and optimize chillers operation schedule Y
O3.5 Maintain proper starting frequency and running time of (reversible) chillers Y
O3.6 Improve part load operation control Y
O3.7 Maintain proper evaporating and condensing temperatures Y
O3.8 Raise chilled water temperature and suction gas pressure Y
O3.9 Lower condensing water temperature and pressures Y
O3.10 Check sensor functioning and placement for (reversible) chillers Y
O3.11 Maintain efficient defrosting (reversible chillers) Y
O3.12 Maintain proper heat source/sink flow rates Y
O3.13 Maintain functioning of (reversible) chiller expansion device Y
O3.14 Check (reversible) chiller stand-by losses Y
O3.15 Maintain full charge of refrigerant Y/N
O3.16 Clean finned tube evaporator / condenser air side and straighten damaged
fins
O3.17 Clean condenser tubes periodically
O3.18 Repair or upgrade insulation on chiller
O3.19 Clean and maintain cooling tower circuits and heat exchanger surfaces
O3.20 Apply indirect free cooling using the existing cooling tower (free chilling) Y
FLUID (AIR AND WATER) HANDLING AND DISTRIBUTION
O4.1 Consider modifying the supply air temperature (all–air and air–and–water Y
systems)
O4.2 Perform night time overventilation Y
O4.3 Shut off coil circulators when not required Y
O4.4 Replace mixing dampers
O4.5 Adjust fan belts (AHU, packaged systems)
O4.6 Eliminate air leaks (AHU, packaged systems)
O4.7 Increase outdoor air flow rate (direct free cooling) Y
O4.8 Adjust/balance ventilation system Y
O4.9 Reduce air flow rate to actual needs Y/N
O4.10 Check maintenance protocol in order to reduce pressure losses
O4.11 Reduce air leakage in ducts
O4.12 Clean fan blades
O4.13 Maintain drives
O4.14 Clean or replace filters regularly
O4.15 Repair/upgrade duct, pipe and tank insulation
O4.16 Consider the possibility to increase the water outlet – inlet temperature
difference and reduce the flow rate for pumping power reduction
O4.17 Balance hydronic distribution system Y
O4.18 Bleed air from hydronic distribution system Y
O4.19 Switch off circulation pumps when not required Y
O4.20 Maintain proper water level in expansion tank Y
O4.21 Repair water leaks
O4.22 Reduce water flow rates to actual needs Y/N
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8. 2. Improvement through actions aimed at Envelope and Loads
Significant energy savings may be achieved by implementing actions aimed at reducing the
building cooling load through an improvement of the envelope performance or a better
management of the internal heat gains. Such ECOs cover a broad variety of actions, including
purely operational / maintenance measures, as well as partial or total replacement of
components and systems.
Solar gain reduction / Daylight control improvement
One of the main contributions to the cooling load of a building, particularly in the commercial
sector, is the solar radiation gain through glazed envelope components. The adoption of largely
glazed external envelopes in commercial buildings is justified both by architectural reasons and
by daylighting. The optimal selection of the solar-optical properties of glazing, as well as the
provision and use of effective shading devices (ECOs E1.1 to E1.4), is the key factor in
achieving a satisfactory balance between the potentially conflicting goals of limiting summer
solar gains without penalising the availability of daylight. A reduction in day light availability, in
fact, not only determines a direct increase in lighting energy consumption, but may also indirectly
increase the space cooling load, since the luminous efficacy of most artificial lighting systems is
usually lower than that of natural light.
ECO 1.5 “Close off balconies to make sunspace/greenhouse” modifies the usable floor area and
the natural ventilation of the dwelling. Its applicability is therefore subject to local regulations.
Solar control may also be achieved by acting on landscaping, i.e. through the use of vegetation
(ECO E1.6); seasonal variation of solar radiation patterns and presence of leaves should be
considered.
Ventilation / Air movement / Air leakage improvement
Natural ventilation in buildings may be an effective energy conservation strategy, based on the
proper interaction between building envelope characteristics (air permeability, presence of
operable windows, etc.) and internal layout of the building (presence of convective paths).
It is important to control natural ventilation by proper operation of windows and doors (ECO 2.1),
by controlling convective paths through which significant airflow may occur (ECOs 2.3, 2.7) and
envelope air leakage: excessive envelope air leakage in fact may be detrimental - both in winter
and summer - when it implies excessive infiltration of untreated outdoor air (ECOs E2.4, E2.5,
E2.8); on the other hand, natural ventilation of buffer spaces such as attics is an effective way of
removing solar heat gains before they enter the air conditioned space (ECO 2.2). Free cooling
strategies, such as night time overventilation (ECO 2.6), is another typical application of this
concept since it helps reducing the cooling load in the morning hours.
Envelope insulation improvement
This group of ECOs concern actions aimed at increasing the thermal resistance of the building
envelope by adding proper insulating material to opaque components - such as roofs (ECOs 3.1,
3.2), external walls (ECOs 3.3, 3.4), floors and basement walls (ECOs 3.5, 3.6) - or by installing
low-U-value glazing (double, triple, low-emittance, low conductivity gas cavity, etc.) – ECO E3.9.
Thermal bridges, if present, should be corrected by adding external insulation (E3.7). When
practicable, unnecessary windows and doors should be covered, insulated or converted (ECO
E3.8).
8

9. Such actions have a significant impact on winter heat losses, due to the high indoor-outdoor
temperature difference, but may also be beneficial in terms of cooling load reduction, provided
that the insulation position does not negatively alter the transient response of the structure,
which is a crucial factor in the summer energy balance of the building.
Similarly to the discussion of point 3.1, the economical attractiveness of these ECOs greatly
depends on the possibility of application in conjunction with major building renovation work (e.g.
roof or facade refurbishment, window substitution, etc.).
Other actions aimed at load reduction
Under this generic heading, miscellaneous ECOs are listed that do not fall into the previous
categories. Most of these ECOs are related to the use of lighting - high efficiency lighting
sources (E4.6), optimised lighting management based on effective occupancy or daylight
availability (E4.7, 4.8) - and electrical equipment - electric load management (E4.4), use of high
efficiency equipment (E4.5), positioning of office equipment in unconditioned spaces (E4.9).
These ECOs have dual energy efficiency significance: they contribute to cooling load reduction,
and directly reduce the electrical energy use of the building.
The other ECOs in this category - reduced volume of conditioned space (E4.1), exterior colour
selection (E4.2), evaporative cooling to reduce roof heat gain (E4.3) - are building-related.
3. Performance enhancement through adequate improvement works
The ECOs of the “Plant” type always imply some modification or replacement work on the HVAC
system; they are subdivided into six sub-categories:
• BEMS and Controls / Miscellaneous: ECOs implying an improvement in control
strategies at the hardware level.
• Cooling equipment / Free cooling: ECOs concerning chillers and cooling towers; energy-
efficient cooling strategies (such as free cooling, cold storage, use of ground eater, etc.)
• Air handling / Heat recovery / Air distribution: ECOs concerning air handling and
distribution equipment; energy-efficient air treatment strategies.
• Water handling / Water distribution: ECOs concerning water handling and distribution
equipment; energy-efficient water distribution strategies.
• Terminal units.
• System replacement (in specific limited zones)
The possibility of BEMS implementation is indicated with a Y in the ECO list third column.
BEMS and Controls / Miscellaneous
Building Energy Management Systems (BEMS) are more and more becoming a standard in new
buildings, thanks to the availability of digital controls and powerful, low-cost computers – ECO
P1.1. BEMS make it possible to monitor from a remote location the main building and HVAC
system operation parameters (occupancy, indoor temperatures, system components on-off
status, fluid flow rates and temperatures, etc.) and to modify the HVAC system control
parameters (set-points, component operation timing, etc.). BEMS can monitor energy
consumption, provided electrical and thermal energy meters are installed (ECO P1.2). BEMS
also make it possible to implement advanced control strategies, such as optimal equipment
9

10. start-stop, free cooling, demand controlled ventilation, variable speed pumping and air flow,
sunshades operation, artificial light trimming based on occupancy and daylight. To take full
advantage of such features, the existing controls and HVAC hardware may require some
modification (ECOs P1.3 – 1.5).
The auditor should not overlook the energy consumption of electrical motors (ECO P1.6) and
auxiliary equipment (ECO P1.7) present in HVAC systems that should be replaced when
inefficient.
Cooling equipment / Free cooling
The generation of a cooling effect is probably the single major cause of energy consumption in
air conditioning. With this respect, several energy conservation options area available that may
be implemented by optimisation of the existing equipment, or by system upgrading /
replacement. The efficiency of the cooling equipment may be increased by different actions that
are listed below:
• The optimal placement of cooling towers, air-cooled water chillers, air handling units,
packaged, split or VRF systems should be considered by taking into account the negative
effects that may derive from impinging solar radiation, obstructions to air flow, etc. (ECO
P2.1).
• The efficiency of chillers and heat pumps can be increased by reducing the power if
oversized (ECO P2.2), or by splitting the load among multiple chillers of smaller size (ECO
P2.3): the latter ECO enhances the regulation capabilities by increasing the number of
possible power steps.
• Multiple chillers can be hydraulically connected in series or parallel, with effects the overall
performance of the system; the auditor is advised to verify the hydraulics of the cooling plant,
check the water flow rates and inlet / outlet temperatures, and make a judgment if such
values are optimally matched with the equipment characteristics and load profiles (ECO
P2.4). The auditor should also check that the control strategies of the refrigeration equipment
are adequate, or if improvements can be implemented (ECO P2.5). If feasible from the
technical and legal standpoint, chiller (heat pump) efficiency may be increased by feeding
the condenser (evaporator) with a constant temperature natural water sources, such as the
water table, a river, a lake or the sea (ECO P2.7). As a more radical alternative, equipment
replacement may be considered (ECO P2.6); such decision may be influenced by
maintenance conditions, type of refrigerant fluid employed (it is not unlikely to encounter
refrigeration units employing CFC’s that are no longer produced), excessive noise or
vibration emissions, etc.
• A significant cooling effect may sometimes be obtained by directly exploiting free sources of
cooling, such as the outdoor air, ground water, or the soil. Evaporative cooling (ECO P2.8) is
particularly effective in dry climates. Ground water – local regulations permitting – is an
excellent source of cooling (ECO P2.9) for HVAC systems that may be fed with relatively
high temperature cold water (e.g. radiant panels, chilled beams, etc.). Free chilling / cooling
using the existing cooling tower (ECO P2.10) or air-to-water heat exchanger (P2.11) is
practicable when the outdoor air enthalpy is low enough.
• If relatively high temperature waste heat is available – a common circumstance in industry –
the auditor should evaluate the option of installing absorption-cycle refrigeration equipment
(P2.12). It is important to point out that, compared with vapour compression-cycle
10

11. equipment, absorption chillers have normally lower efficiencies and higher initial costs:
therefore, the economical feasibility of such option strongly depends on the cost differential
between the thermal and electrical energy input.
• Short-term storage of cooling energy in chilled water, water ice, or other phase-changing
materials, may be an effective way of reducing electricity costs (by shifting the peak power
demand to the night time), or equipment sizing (a smaller chiller running for more hours +
storage may substitute a larger chiller running only when cooling is needed, e.g. in buildings
with non continuous occupancy, such as offices, shopping centres, etc.) – ECO P2.13. Due
consideration should be paid to high initial costs, space requirements, and to the fact that
this solution – albeit being a cost saver - may actually increase the energy consumption,
particularly if the temperature of the storage medium is significantly lower than the required
chilled water temperature.
• It is well known that any refrigeration process implies the rejection of heat to a suitable heat
sink (outdoor air, cooling tower water, ground water, etc.). Since the air conditioning process
often implies reheating for humidity control, the possibility arises to recover condensation
heat for air reheating (ECO P2.14). Most refrigeration equipment manufacturers offer
condensation heat recovery as a standard option for their water chillers.
Air handling / Heat recovery / Air distribution
A significant source of electrical and thermal energy demand in HVAC systems is air handling
and distribution: air filtration, heating, cooling, humidification, dehumidification are the processes
taking place in the air handling unit (AHU), which normally incorporates one or two fans for air
movement. Normally a hot heat carrier fluid is needed for air preheating, reheating and
humidification (indirect steam production); a cold heat carrier fluid is needed for air cooling and
dehumidification, electricity for direct steam production, air and water movement, and
occasionally for air reheating. For most of the above processes the auditor may consider the
ECOs that are discussed below:
• Fan electrical input may be reduced by correct motor sizing (ECO P3.1) and selection of high
performance components according to Eurovent classification (ECO P3.3); such
classification applies to the AHU as well (ECO P3.4). If feasible, the fan motor should also be
placed outside the air stream, to avoid air heating in the air cooling regime (ECO P3.2).
• Chemical de-humidification (ECO P3.5) may be considered as an alternative to the
conventional process based on reducing the air temperature below its dew-point. This
approach reduces the chiller consumption, but implies the availability of heat (possibly
recovered without extra consumption) in order to regenerate the dehumidifier.
• Variable flow rate systems have become very popular with the diffusion of low-cost inverters
(solid state electronic devices that allow motor speed control by varying the AC supply
frequency). Such options may be considered as retrofits of existing constant air flow systems
(ECO P3.6, P3.7).
• Energy may be recovered from exhaust air by using a heat recuperator giving up heat (and
possibly water vapour) from the warm / humid outdoor air and the cool / dry exhaust indoor
air (ECO P3.9). Alternatively, the indoor air may be exhausted to heat-rejection equipments
such as condensers and cooling towers (ECO P3.8).
11

12. • Demand-controlled ventilation (DCV) is particularly suited for variable occupancy buildings,
such as theatres, auditoria, conference rooms, classrooms, etc. (ECO P3.10). DCV
techniques imply variable fan speed control, adjustable outdoor / recirculated air dampers,
and sensors estimating occupancy by measuring a suitable tracer pollutant (e.g. CO2, VOCs,
etc.). A similar system concept applies to direct free cooling (ECO P3.11): the percentage of
outdoor air is automatically increased, thus reducing recirculation, to take advantage of
suitable climatic conditions for space cooling.
• An inspection of the ductwork and measurements of fan flow rate and pressure may help in
identifying and eliminating excessive duct leakage (ECO P3.12) and pressure loss (ECO
P3.13). Back-draught or positive closure dampers may be installed to reduce unwanted
ventilation losses in exhaust systems (ECO P3.14).
Water handling / Water distribution
Considerations similar to those in the above section apply to water handling and distribution:
• As for fans, pumps of the best quality class should be selected (ECO P4.1). Variable flow
pumping is achieved with inverter-driven electric motors (ECO P4.5), a solution particularly
suited when two-way regulation valves are present in the fluid network.
• If feasible the pipework layout should be modified to correct excessive pressure losses (ECO
P4.2), reduce mixing losses in 3-pipe systems (conversion to 2-pipe or 4-pipe – ECO P4.3),
match zone requirements by installing separate pumping (ECO P4.4).
Terminal units
Older HVAC systems normally adopt a limited range of terminal units (e.g., fan coils, induction
units, complete mixing air diffusers, etc.). When such terminals are obsolete, too noisy, or
causing discomfort, their replacement may be advisable. Under such circumstances and if
technically feasible, switching to more innovative terminals may be evaluated:
• Chilled ceilings or cold beams (ECO P5.1) provide excellent comfort, and can be nicely
integrated in the room architecture; as any low-temperature heating / high-temperature
cooling units, they help increasing the heating / cooling generating equipment performance.
• Displacement ventilation (ECO P5.4) increases the ventilation and pollutant removal
efficiency; this technique is applicable in the cooling mode only in spaces with significant
internal loads from people or equipment.
• Introducing re-cool coils in zones with high cooling loads (ECO P5.2), increase heat
exchanger cooling areas (ECO P5.3), install localised HVAC systems in case of local
discomfort (ECO P5.5) are other possible retrofits on existing plants.
System replacement (in specific limited zones)
When more radical renovation work on existing HVAC systems is needed, options such as the
water loop heat pump system (ECO P6.1) or the variable refrigerant flow (VRF) system (ECO
P6.2) may be considered. The former system is indicated when, in a large building, different
zones simultaneously require either heating or cooling. The latter system uses the refrigerant as
the heat carrying fluid, and therefore eliminates the need for producing and distributing chilled
12

13. water; the presence of large quantities of refrigerant inside inhabited areas may however pose a
safety problem, and may not be compatible with present or future regulations.
Methods for the cost-effectiveness evaluation of ECOs
To evaluate the cost – effectiveness of energy retrofit projects, several evaluation tools can be
considered. The basic concept of all these tools is to compare among the alternatives the net
cash flow that results during the entire lifetime of the project. The common evaluation methods in
engineering projects are:
• Net Present Worth
• Rate of Return
• Benefit – Cost Ratio
• Payback Period
• Life – Cycle Cost analysis
A description of the above methods may be downloaded from the AUDITAC website as an
appendix to this Technical Guide.
4. Improvement through O&M
O&M diagnosis and assessments
Building Operation and Maintenance (O&M) is the ongoing process of sustaining the
performance of building systems according to design intent, the owner’s or occupants’ changing
needs, and optimum efficiency levels. The O&M process helps sustain a building’s overall
profitability by addressing tenant comfort, equipment reliability, and efficient operation. Efficient
operation, in the context of O&M, refers to activities such as scheduling equipment and
optimizing energy and comfort-control strategies so that equipment operates only to the degree
needed to fulfill its intended function. Maintenance activities involve physically inspecting and
caring for equipment. These O&M tasks, when performed systematically, increase reliability,
reduce equipment degradation, and sustain energy efficiency. Building operation and
maintenance programs specifically designed to enhance operating efficiency of HVAC can save
5 to 20 percent of the energy bills without significant capital investment.
An O&M assessment is a systematic method for identifying ways to optimize the performance of
an existing building. It involves gathering, analyzing, and presenting information based on the
building owner or manager’s requirements. Owners generally perform an O&M assessment for
the following reasons:
• To identify low-cost O&M solutions for improving energy efficiency, comfort, and indoor
air quality (IAQ);
• To reduce premature equipment failure;
• To insure optimal equipment performance;
• To obtain an understanding of current O&M practices and documentation.
O&M assessments may be performed as a stand-alone activity that results in a set of O&M
recommendations or as part of a more comprehensive approach to improving existing-building
performance. The goal of the assessment is to gain an understanding of how building systems
and equipment are currently operated and maintained, why these O&M strategies were chosen,
13

14. and what the most significant problems are for building staff and occupants. Implementing O&M
changes without fully understanding the owner’s operational needs can have disappointing and
even disastrous effects. Most projects require the development of a formal assessment
instrument in order to obtain all the necessary O&M information. This instrument includes a
detailed interview with the facility manager, building operators and maintenance service
contractors who are responsible for the administration and implementation of the O&M program.
Depending on the scope of the project, it may also include an in-depth site survey of equipment
condition and gathering of nameplate information. An O&M assessment can take from a few
days to several weeks to complete depending on the objectives and scope of the project.
The assessment identifies the best opportunities for optimizing the energy-using systems and
improving O&M practices. It provides the starting point for evaluating the present O&M program
and a basis for understanding which O&M improvements are most cost effective to implement.
O&M assessments identify low-cost changes in O&M practices that can improve building
operation. The O&M assessment may be performed first of all as part of an energy audit
because it offers ways to optimize the existing building systems, reducing the need for
potentially expensive retrofit solutions, besides because implementing the low-cost savings
identified in the assessment can improve the payback schedule for capital improvements
resulting from the energy audit.
The greatest benefit of performing a building O&M assessment is informational. The information
resulting from an O&M assessment can be used to help prioritize both financial and policy issues
regarding the management and budget for the facility. It presents a clear picture of where and
what improvements may be most cost effective to implement first. The assessment process,
depending on the owner’s or manager’s requirements, can also provide direct training and
documentation benefits for O&M staff. Depending on the goals for performing the assessment,
typical benefits may include:
• Identifying operational improvements that capture energy and demand savings;
• Identifying operational improvements that positively affect comfort and IAQ;
• Improving building control;
• Developing a baseline report on the condition of major HVAC equipment;
• Developing an updated and complete equipment list (nameplate data);
• Identifying issues contributing to premature equipment failure;
• Identifying ways to reduce staff time spent on emergencies;
• Increasing O&M staff capabilities and expertise;
• Determining whether staff require additional training;
• Identifying and gathering any missing critical system documentation;
• Developing a complete set of sequences of operation for the major HVAC systems;
• Evaluating the BEMS for opportunities to optimize control strategies;
• Recommending energy-efficiency measures for further investigation;
• Determining original design intent and the cost to bring the building back to original
design;
• Providing a cost/benefit analysis of implementing the recommended O&M improvements;
• Developing an operating plan and policy to maintain optimal building performance over
time.
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15. The best benefits keep on giving long after the process is completed. For example, the final
master log of recommended improvements along with the estimated savings allows an owner or
building manager to prioritize and budget accurately for the implementation process. Also, minor
problems that could be solved during the assessment may begin to reduce energy costs and
improve comfort immediately; equipment life may be extended for equipment that may have
failed prematurely due to hidden problems, short-cycling, or excessive run time.
How much an O&M assessment costs is influenced by several factors:
• The number and complexity of the buildings, systems, and equipment involved;
• The number and type of assessment objectives;
• The availability and completeness of building documentation;
• The availability and expertise of the O&M staff.
A project with several objectives will naturally cost more than a project with fewer objectives.
Also, a project with complicated controls and numerous pieces of equipment will cost more than
a simple building with only a few pieces of equipment. Scoping the project to obtain the most
benefit at the least cost can be challenging. The owner must have a clear vision for what the
assessment needs to accomplish and impart that vision to the O&M consultant. In some cases
the owner may want to hire an O&M consultant to help scope the project.
Inclusion of proper clauses in O&M service contracts
Frequently, building owners and managers outsource most if not all of the O&M services for their
building systems. Several factors contribute to increasing business opportunities for O&M
service providers in commercial buildings. These include:
• Growing interest in indoor air quality (IAQ) issues;
• Phase-out of CFC refrigerants;
• Building owners’ and managers’ desire to reduce operating costs and assure reliability;
• Building owners’ and managers’ desire to be environmentally responsible.
The research required to design and obtain a good O&M service contract is often too confusing
and time-consuming for the typical owner or manager to pursue. The purpose of this section is to
provide clear information on service contract options and trends to building owners, facility
managers, property managers, and chief building engineers.
In the service companies, there is no standard or set of definitions for the various kinds of
service contracts. Each mechanical or maintenance service contractor puts together a unique
package of contracts. The package often consists of three or four types of contracts, each
presenting a different level of comprehensiveness. In this document, four fundamental types of
contract are defined: full-coverage, full-labor, preventive-maintenance, and inspection
contracts. The newer concept of an end-use or end-results contract is also briefly discussed.
There can be many variations within a contract type, depending on owner needs and contractor
willingness to modify or customize service offerings. Most of the contract types discussed below
can encompass either the entire mechanical system or just one piece of major equipment such
as a chiller. Also, owners may have more than one type of contract in place at any given time.
Full-Coverage Service Contract
A full-coverage service contract provides 100% coverage of labor, parts, and materials as well
as emergency service. Owners may purchase this type of contract for all of their building
15

16. equipment or for only the most critical equipment, depending on their needs. This type of
contract should always include comprehensive preventive maintenance for the covered
equipment and systems. If it is not already included in the contract, for an additional fee the
owner can purchase repair and replacement coverage (sometimes called a “breakdown”
insurance policy) for the covered equipment. This makes the contractor completely responsible
for the equipment. When repair and replacement coverage is part of the agreement, it is to the
contractor’s advantage to perform rigorous preventive maintenance on schedule, since they
must replace the equipment if it fails prematurely. Full-coverage contracts are usually the most
comprehensive and the most expensive type of agreement in the short term. In the long term,
however, such a contract may prove to be the most cost-effective, depending on the owner’s
overall O&M objectives. Major advantages of full-coverage contracts are ease of budgeting and
the fact that most if not all of the risk are carried by the contractor. However, if the contractor is
not reputable or underestimates the requirements of the equipment to be insured, they may do
only enough preventive maintenance to keep the equipment barely running until the end of the
contract period. Also, if a company underbids the work in order to win the contract, they may
attempt to break the contract early if they foresee a high probability of one or more catastrophic
failures occurring before the end of the contract.
Full-Labour Service Contract
A full-labour service contract covers 100% of the labour to repair, replace, and maintain most
mechanical equipment. The owner is required to purchase all equipment and parts. Although
preventive maintenance and operation may be part of the agreement, actual installation of major
plant equipment such as a centrifugal chillers, boilers, and large air compressors is typically
excluded from the contract. Risk and warranty issues usually preclude anyone but the
manufacturer installing these types of equipment. Methods of dealing with emergency calls may
also vary. The cost of emergency calls may be factored into the original contract, or the
contractor may agree to respond to an emergency within a set number of hours with the owner
paying for the emergency labour as a separate item. Some preventive maintenance services are
often included in the agreement along with minor materials such as belts, grease, and filters.
This is the second most expensive contract regarding short-term impact on the maintenance
budget. This type of contract is usually advantageous only for owners of very large buildings or
multiple properties who can buy in bulk and therefore obtain equipment, parts, and materials at
reduced cost. For owners of small to medium-size buildings, cost control and budgeting
becomes more complicated with this type of contract, in which labour is the only constant.
Because they are responsible only for providing labour, the contractor’s risk is less with this type
of contract than with a full-coverage contract.
Preventive-Maintenance Service Contract
The preventive-maintenance (PM) contract is generally purchased for a fixed fee and includes a
number of scheduled and rigorous activities such as changing belts and filters, cleaning indoor
and outdoor coils, lubricating motors and bearings, cleaning and maintaining cooling towers,
testing control functions and calibration, and painting for corrosion control. Generally the
contractor provides the materials as part of the contract. This type contract is popular with
owners and is widely sold. The contract may or may not include arrangements regarding repairs
or emergency calls. The main advantage of this type of contract is that it is initially less
expensive than either the full-service or full-labour contract and provides the owner with an
agreement that focuses on quality preventive maintenance. However, budgeting and cost control
regarding emergencies, repairs, and replacements is more difficult because these activities are
often done on a time-and-materials basis. With this type of contract the owner takes on most of
the risk. Without a clear understanding of PM requirements, an owner could end up with a
contract that provides either too much or too little. For example, if the building is in a particularly
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17. dirty environment, the outdoor cooling coils may need to be cleaned two or three times during
the cooling season instead of just once at the beginning of the season. It is important to
understand how much preventive maintenance is enough to realize the full benefit of this type of
contract.
Inspection Service Contract
An inspection contract is purchased by the owner for a fixed annual fee and includes a fixed
number of periodic inspections. Inspection activities are much less rigorous than preventive
maintenance. Simple tasks such as changing a dirty filter or replacing a broken belt are
performed routinely, but for the most part inspection means looking to see if anything is broken
or is about to break and reporting it to the owner. The contract may or may not require that a
limited number of materials (belts, grease, filters, etc.) be provided by the contractor, and it may
or may not include an agreement regarding other service or emergency calls. In the short-term
perspective, this is the least expensive type of contract. It may also be the least effective—it’s
not always a moneymaker for the contractor but is viewed as a way to maintain a relationship
with the customer. A contractor who has this “foot in the door” arrangement is more likely to be
called when a breakdown or emergency arises. They can then bill on a time-and-materials basis.
Low cost is the main advantage to this contract, which is most appropriate for smaller buildings
with simple mechanical systems.
End-Results Contracting
End-results or end-use contracting is the newest concept in service contracting and is not yet
widely available. The outside contractor takes over all of the operational risk for a particular end
result, such as comfort. In this case, comfort is the product being bought and sold. The owner
and contractor agree on a definition for comfort and a way to measure the results. For example,
comfort might be defined as maintaining the space temperature throughout the building within a
fixed range for 95% of the annual occupied hours. The contract payment schedule is based on
how well the contractor achieves the agreed-upon objectives. This type of contract may be
appropriate for owners who have sensitive customers or critical operational needs that depend
on maintaining a certain level of comfort or environmental quality for optimum productivity. How
risk is shared between the owner and contractor depends on the type or number of end results
purchased. If comfort defined by dry-bulb temperature is the only end result required, then the
owner takes on the risk for ameliorating other problems such as indoor air quality, humidity, and
energy use issues. Maximum contract price is tied to the amount and complexity of the end
results purchased.
Energy Performance Contract
An Energy Performance Contract (EPC) is an agreement by an Energy Service Company
(ESCO) for the provision of energy services in which energy systems are installed, maintained,
or managed to improve the energy efficiency of, or produce energy for, a facility in exchange for
a portion of the energy savings. A preliminary project scope should be included in the Request
For Proposals so that a more effective comparison can be made of proposals used in selecting
an ESCO. The project scope must be directly related to energy savings. Projects that do not
reduce energy use are not appropriate. Projects that replace, repair, or maintain systems and
equipment that are covered by previous EPCs are not acceptable. For example, repair or
replacement of lighting fixtures or temperature control systems that were installed by a previous
EPC, water conservation plumbing fixture replacement, replacement of paper towels in toilet
rooms with electric hand dryers, fire alarm systems, security systems, telephone systems,
technology cabling, etc. and any work in new construction are not appropriate for EPCs.
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18. The EPC project scope must be complete and designed to be independent of any and all other
projects that may be proposed or underway and all construction and administrative costs
necessary to install EPC work must be the responsibility of the ESCO.
Classification of O&M ECOs
The ECOs of the O&M type have been subdivided into four sub-categories:
• Facility Management: general, energy-related recommendations to building owner or
manager.
• General HVAC system: ECOs of a general type, that may be implemented irrespectively
of the type of HVAC system or subsystem being addressed.
• Cooling equipment: ECOs concerning chillers and cooling towers, as well as their
components
• Fluid handling and distribution: ECOs concerning Air Handling Units, fans, ductwork,
pumps, piping, etc.
As for other ECOs categories, the possibility of BEMS implementation is indicated with a Y in the
ECO list third column.
6. Improvement through BEMS1
Methods usually programmed in BEMS
Once a Building Energy Management System (BEMS) is in place and fully operational, the
facility manager who will supervise its operation may look toward optimization. Before trying to
optimize a system, it is important to understand basic BEMS capabilities. Features may vary
widely from model to model, but some basic capabilities are almost universal. In this document
the interest is focused upon energy management. The standard BEMS capabilities are:
• Scheduling
• Set-points
• Alarms
• Safeties
• Basic monitoring and trending
With each of these features, there are opportunities to move beyond minimal utilization without
significant effort or complexity. Selected control strategies that can save energy or reduce
demand are listed in the following table; a detailed description may be downloaded from the
AUDITAC website as an appendix to this Technical Guide.
1
For a more detailed description of BEMS capabilities look at AuditAC Technical guide n°12: Building Energy
Management Systems (BEMS) control strategies for air conditioning efficiency on
http://www.eva.ac.at/projekte/auditac_publ.htm
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19. Scheduling Lockouts Miscellaneous
• Holiday scheduling • Boiler system • Simultaneous
• Zonal scheduling • Chiller system heating/cooling
• Override control and tenant • Direct expansion control
billing compressor • Zone-based HVAC control
• Night setup/setback cooling • Dual duct deck control
• Optimum start • Resistance heat • Chiller staging
• Optimum stop • Boiler control
• Morning warm-up/cool-down • Building space pressure
• Variable speed drive control
• Heat recovery
Ventilation Control Energy Monitoring Lighting
• Carbon dioxide • Whole building or end-use • Lighting sweep
• Occupancy sensors • kWh or demand • Occupancy sensors
• Supply air volume/OSA • Daylight dimming
damper • Zonal lighting control
compensation routines
• Exhaust fans
Air-Side Economizers Resets Demand Control
• Typical air-side • Supply air/discharge air • Demand limiting or load
• Night ventilation purge temperature shedding
• Hot deck and cold deck • Sequential startup of
temperature equipment
• Mixed air temperature • Duty cycling
• Heating water temperature
• Entering condenser water
temperature
• Chilled water supply
temperature
• VAV fan duct pressure / flow
• Chilled water pressure
Evaluating the current Building Energy Management System
In addition to clearly defining a building’s BEMS needs, an owner or facility manager must also
evaluate the state of the current system. Determining whether an existing system can and
should be upgraded is even more complex than the specification of a new system and requires
an honest and complete analysis of the current system. The BEMS operator may be the most
appropriate person to answer questions and provide insight. If sufficient expertise is not
available in-house, consult with a knowledgeable engineer other than the vendor. With the help
of the system operator, put together a list of negative and positive aspects of the current system.
In addition to a thorough technical evaluation, consider other factors, such as ease of operation,
required training level of the BEMS operator, customer (occupant) comfort and controllability.
Determine whether the BEMS vendor has an upgrade path for the existing BEMS. If he does,
compare the cost to system replacement and review the relative benefits of an upgrade versus a
replacement. Some further points to consider when evaluating your BEMS are:
1. Is the current system operating to its maximum capability? If not, why not?
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20. • Are any BEMS problems due inadequately trained operating personnel? If this is the
case, would replacement of the system solve the problem, or will the same problem exist
after the system has been replaced?
• Are problems due to lack of maintenance of the EMS, including software, firmware, and
hardware upgrades?
• Are there a number of points that are being operated in “hand” condition, overridden by
the operators, non-operational, or completely bypassed? Why? If so, will upgrading the
system really solve these problems?
2. Consider these broad management and financial issues: Are there energy management
strategies the current system cannot perform? For example, a BEMS may not be able to
implement strategies because it cannot interface with DDC terminal equipment controllers
(VAV boxes, fan coil units, unit ventilators, etc.).
• Has the existing system met your expectations from the time it was installed?
• Have you documented any savings accomplished by the existing system?
• Will the proposed changes allow greater energy, and/or cost savings than the existing
BEMS system?
3. If the system has been serviced by the vendor (either by contract or casual labor calls), has
the service been up to expectations and have the costs seemed appropriate? If there is a
service contract, is it fully understood? Inadequate service could account for poor
performance.
4. Do you have one BEMS system or several different systems consisting, in some cases, of
only one field panel? If there are systems from more than one manufacturer or separate
incompatible systems from one vendor, would both systems be upgraded?
5. Are you preparing to expand the facility or perform major system improvements that will
result in adding points and functions to the existing BEMS? Is the existing BEMS worth
including in these plans? Does it have the capacity to handle these changes?
6. If a replacement is being considered, do the system components have any resale value?
Some companies purchase the BEMS components of older systems for sale to facilities still
using those systems. Will the vendor of the existing BEMS offer any kind of trade-in
allowance for the old equipment? After considering all the relevant factors, the facility
manager, with the help of a consultant or vendor, can begin to formulate options for BEMS
upgrade or replacement. The development of very detailed options is usually done by the
consultant or vendor, although the facility manager may specify the inclusion of certain
features.
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21. ANNEX- ECONOMICAL ANALYSIS METHODS
Net Present Worth
The present worth of the cash flows that occur during the lifetime of the project is calculated as
follows:
N
NPW = −CF0 + ∑ CFk * SPPW (d , k )
k =1
where:
SPPW (d,k) [Single Payment Present Worth after N years] = P/F = (1+d)-k = value of the cash
flow P needed to attain a needed cash flow F after k years
N = lifetime
d = discount rate
CF = cash flow
The initial cash flow is negative (a capital cost for the project), while the cash flows for the other
years are generally positive (revenues). For the project to be economically viable, the net
present worth has to be positive or at worst zero (NPW ≥ 0). Obviously, the higher the is the
NPW, the more economically sound is the project. This method is often called the net savings
method since the revenues are often due to the cost savings from implementing the project.
Rate of Return
In this method the first step is to determine the specific value of the discount rate, d’, that
reduces the net present worth to zero. This specific discount rate, called the rate of return
(ROR), is the solution of the following equation:
N
− CF0 + ∑ CFk * SPPW (d ' , k ) = 0
k =1
Once the rate of return is obtained for a given alternative of the project, the actual market
discount rate or the minimum acceptable rate of return is compared to the ROR value. If the
value of ROR is larger (d’>d), the project is cost – effective.
Benefit – Cost Ratio
The benefit – cost ratio (BCR) method is also called the savings – to investment ratio (SIR) and
provides a measure of the net benefits (or savings) of the project relative to its net cost. The net
values of both benefits (Bk) and costs (Ck) are computed relative to a base case. The present
worth of all the cash flows are typically used in this method. The BCR is computed as follows:
N
∑B k * SPPW (d , k )
BCR = k =0
N
∑C
k =0
k * SPPW (d , k )
21

22. The alternative option for the project is considered economically viable relative to the base case
when BCR > 1.0.
Payback Period
In this evaluation method, the period Y (years) required to recover an initial investment is
determined. Y is the solution of the following equation:
Y
CF0 = ∑ CFk * SPPW (d ' , k )
k =1
If the payback period Y is less than the lifetime of the project (Y<N), then the project is
economically viable and the obtained value of Y is called discounted payback period (DBP)
since it includes the value of money. If, as in the majority of applications, the time value of
money is neglected, y is called simple payback period (SBP) and is solution of the following
equation:
Y
CF0 = ∑ CFk
k =1
The methods described above provide an indication of whether or not a single alternative of a
retrofit project is cost – effective. However, these methods cannot be used or relied on to
compare and rank various alternatives for a given retrofit project. Only the life – cycle cost (LCC)
analysis method is appropriate for such endeavour.
Life – Cycle Cost analysis method
The Life-Cycle Cost (LCC) analysis method is the most commonly accepted method used to
assess the economic benefits of energy conservation projects over their lifetime. The method is
used to compare at least two alternatives of a given project. The basic procedure of the LCC
method is simple since it seeks to determine the relative cost effectiveness of the various
alternatives. The cost is determined using one of two approaches (the present worth or the
annualized cost estimate). The alternative with the lowest LCC is typically selected.
1. One single present value amount:
N
LCC = ∑ CFk * SPPW (d , k )
k =0
2. Multiple annualized costs over the lifetime of the project:
⎡N ⎤
LCC a = USCR (d , N ) * ⎢∑ CFk * SPPW (d , k )⎥
⎣ k =1 ⎦
where:
USCR [Uniform Series Capital Recovery Factor] = A/P = d/(1-(1+d)-N) = cost savings due to the
retrofit project (A)/initial investment (P)
22

23. A LCC analysis can be performed a variety of ways without compromising the results if the
assumptions that shape the LCC analysis employ reasonable and consistent judgement.
The LCC analysis of each project alternative should include:
• A brief description of the project alternative
• A brief explanation as to why the project alternative was selected
• A brief explanation of the assumptions made during the LCC analysis
• Conceptual or schematic documentation indicating design intent of the alternative
• A site plan showing the integration of the proposed facility on the site and necessary site
improvements (for projects involving additions or new construction)
• A detailed LCC analysis of the project alternative
• A summary table that compares the total life cycle costs of Initial Investment, Operations,
Maintenance & Repair, Replacement, Residual Value of all the project alternatives
The first step in the completion of the LCCA of a project alternative is to define all the initial
investment costs of the alternative. Initial investment costs are costs that will be incurred prior
to the occupation of the facility.
The second step is to define all the future operation costs of the alternative. The operation
costs are annual costs, excluding maintenance and repair costs, involved in the operation of the
facility. All operation costs are to be discounted to their present value prior to addition to the LCC
analysis total.
The third step is to define all the future maintenance and repair costs of the alternative.
Maintenance costs are scheduled costs associated with the upkeep of the facility. Repair costs
are unanticipated expenditures that are required to prolong the life of a building system without
replacing the system.
The fourth step is to define all the future replacement costs of the alternative. Replacement
costs are anticipated expenditures to major building system components that are required to
maintain the operation of a facility. All replacement costs are to be discounted to their present
value prior to addition to the LCC total analysis.
The fifth step is to define the residual value of the alternative. Residual value is the net worth of
a building or building system at the end of the LCC analysis study period.
Once all pertinent costs have been established and discounted to their present value, the costs
can be summed to generate the total life cycle cost of the project alternative.
23