Life Cycle Cost Analysis (LCCA) is a powerful tool used by architects, engineers, and building owners to validate design options using cost as a metric. By looking at the cost of an option or Energy Conservation Measure (ECM) over the entire life of a project, design teams can determine if the option meets acceptance criteria. An LCCA can also be part of a Life Cycle Assessment (LCA) which also considers environmental factors such as carbon emissions and resource depletion. This guide will be focused on cost-centric LCCA. For more information on Life Cycle Assessments, please check out this guide from the American Institute of Architects.
What is Life Cycle Cost Analysis?
LCCA is the process of assessing the total cost of ownership for a building, piece of equipment, or bundle of technologies. By looking beyond first cost, LCCA helps owners make inform decisions on potential cost savings over the life of their buildings. These analyses are excellent at comparing multiple alternatives on a leveled setting, allowing options that may have a higher first cost to show their value through annual cost savings from lower energy bills. LCCA is used by many industries and many institutions as standard procedure for all projects.
Common Terminology
First Cost - this is the day one cost to the owner for the building, equipment, or alternative
Operation Costs - this is the yearly cost of the energy used by the building, equipment, or alternative
Maintenance Costs - this is the yearly cost to maintain the building, equipment, or alternative
Replacement Costs - this is cost to replace a portion, or the entire piece of equipment during the life of the project.
Simple Payback - is the number of years required for costs savings to equal or exceed the first costs, without interest and/or inflation.
There are more details around LCCA than can be covered in this help article. For a more in depth look, please reference ASHRAE Handbook Applications Chapter 38 or this resource from the Whole Building Design Guide.
Performing LCCA with cove.tool
There are many ways to perform your own LCCA, the most common of which being Excel. Results from the platform can be used to feed directly into an existing LCCA calculation. Operation Cost can be taken directly from the Whole Building Energy Model results.
Combining this with first cost and other information from a cost estimator and the design team will allow you to calculation LCCA for multiple options.
With the upcoming costestimating.tool teams will be able to determine first cost within the same platform. This will allow the full LCCA process to be done directly on a single model of the project.