Abbas Shirian, PE
Certified GeoExchange Designer
Life Cycle Cost Analysis
“to evaluate all cost factors including first
cost, operation, maintenance, replacement,
and estimated energy use over a period of
years for alternatives that equally satisfy
functional requirements”.
Initial Cost & Design Variables
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Equipment – Standard Efficiency or High Efficiency
Drilling cost - Borehole Depth, Pipe Size & Site Conditions
Piping Accessories
Outside Air & Ventilation System
Distribution & Pumping System
System Design
Controls System
Value of Floor Square Footage For Mechanical Rooms
Additional Cost for Structural Reinforcement
Additional Cost for Roof Access and Repairs
Additional Cost for Sound Proofing
Service Life & Replacement
 Life Expectancy of HVAC Equipment
 Life of Ground Loop Heat Exchanger
 Life of Water Distribution/Equipment
 Life of Air Distribution System
 Life of Control System
Energy Costs
 Utility Structure of Electric Rates
 Natural Gas and Fuel Cost
 Inflation Rate
 Equipment Efficiencies
 Pumping Efficiency
Ground Source Heat Pump
Electricity at $0.08/kWh & cop at 3.7
$0.08/kW x kW/3412 Btu x 100,000 Btu/therm x 1/cop =
$0.63/therm or $6.30/MMBtu
Gas/Electric HVAC System
Natural gas at $0.90/therm & 80% efficiency
$0.90/therm x 1/efficiency =
$1.13/therm or $11.30/MMBtu
Operating, Maintenance and
Replacement Costs
 ASHRAE
 Mean’s Handbook
 Equipment Manufacturers
 Contractors
 Owner’s O&M
Salvage Value
 Zero out at end of life for all alternatives
 Ground Heat Exchanger Salvage Value
Cost of Money
 Depreciation Method
 Energy Cost Inflation Rate
 Interest Rate
 Percent Financed
 Income Tax Rate
 Study Life
 Depreciation Life
Typical Financial Cost
 Life of Analysis
 Cost of Borrowing Money
 Inflation
 Electric Energy Escalation
 Natural Gas Energy Escalation
 Tax Rate
 Cost of Insurance
25 yrs
5-10%
3-5%
2-3%
3-5%
0-33%
2%
HVAC First Cost ($/sq.ft.)
Based on 77,000 sq.ft. school & 220 ton cooling
 Geothermal Heat Pump ($2000/borehole)
$25.22
 Geothermal Heat Pump ($3000/borehole)
$28.08
 Water Source Heat Pump
$22.81
 VAV, AHU & TU/HW (Water Cooled Chiller)
$30.04
 VAV, AHU & TU/HW (Air Cooled Chiller)
$27.85
 Packaged Rooftop DX/Gas
$20.39
 Indoor Air Washer &HW Heating
$28.85
 Fan Coil (4- Pipe) (Water Cooled Chiller)
$28.68
 Fan Coil (4- Pipe) (Air Cooled Chiller)
$26.49
Real Estate/Structural Savings
 No mechanical rooms to house boilers or chillers with
geothermal and air-cooled unitary
 No fan rooms or penthouses with geothermal heat
pump (horizontal) and 4-pipe fan coil unit systems
Annual Maintenance Cost ($/Ton)
 Geothermal Heat Pump
 Water Source Heat Pump
 VAV, AHU & TU/HW (Water Cooled Chiller)
 VAV, AHU & TU/HW (Air Cooled Chiller)
 Packaged Rooftop DX/Gas
 Indoor Air Washer & HW Heating
 Fan Coil (4- Pipe) (Water Cooled Chiller)
 Fan Coil (4- Pipe) (Air Cooled Chiller)
$67.24
$70.45
$43.23
$40.85
$59.24
$70.45
$56.04
$53.23
Life Cycle Cost
 Geothermal Heat Pump
 Water Source Heat Pump
 VAV, AHU & TU/HW (Water Cooled Chiller)
 VAV, AHU & TU/HW (Air Cooled Chiller)
 Packaged Rooftop DX/Gas
 Indoor Air Washer & HW Heating
 Fan Coil (4- Pipe) (Water Cooled Chiller)
 Fan Coil (4- Pipe) (Air Cooled Chiller)