HVAC Condition Assessments, LCCA, & Energy Retrofit Programs

Transcription

1 HVAC Condition Assessments, LCCA, & Energy Retrofit Programs Comprehensive Energy Services, Inc Todd Morgan JR, Account Executive 777 Longwood, FL (407)

2 Agenda Overview What is an Energy Retrofit Program? HVAC Condition Assessments Break Life Cycle Cost Analysis Q&A!2

3 What's in an Energy Retrofit Program? HVAC Condition Assessment Monitoring Life Cycle Cost Analysis (LCCA)!3

4 Avoid costly emergency replacement If your HVAC equipment is nearing its end of life about 12 to 15 years* and if it fails in the middle of the summer, you will likely end up paying a premium to repair or replace the unit. Replacement unit may not have the right features, or even be the right size, because the need to restore air conditioning could force you to make short-term trade-offs.!4

5 Avoid Disrupting Business New equipment gives you peace of mind. With out-of-date equipment, there s a constant worry about when it may break down. Unplanned repair expenses negatively impact your profitability and cash flow. In addition to paying more for emergency equipment, you have dissatisfied customers and employees, as well as lost sales.!5

6 Lower Replacement Costs Replacing multiple units at the same time spreads out fixed costs, such as crane rental and travel time, over several units. Your increased purchasing power may also lower other costs related to equipment purchase and installation.!6

7 Control Capital Expenditure Planning ahead lets you select the best equipment for your needs. When you control the timing of any capital expenditure, you manage business finances more effectively and efficiently.!7

8 Immediate positive cash flow With leasing, there may be no upfront costs or down payments required. Combined with the lower operating costs of today s equipment and avoided repair costs, new equipment could provide you with immediate positive cash flow!8

9 HVAC Project is a Capital Asset The installation will likely see several decades of service, represents a substantial investment, and the upfront cost often represents only 5% of the overall funding in terms of total cost of ownership over 20 or more years.!9

10 How HVAC Energy Retrofit Programs Save You Money Avoid costly emergency replacement Lower replacement costs Control the timing of your capital expenditure Immediate positive cash flow!10

11 Energy Retrofit Program Outcomes Acquiring equipment and systems that are outstandingly durable and therefore pay off their higher initial costs with lower operational and maintenance expenses. Equipment and systems with lower initial costs and satisfactory, if not optimal, performance. Increase the facility s performance (and profitability, in the instance of the private sector) to such a degree that it justifies the additional cost.!11

12 !12

13 HVAC systems comprise approximately 33% of a typical commercial building s energy use!13

14 HVAC Condition Assessments CES s HVAC Condition Assessment is a rapid visual inspection of nine different elements within each HVAC system at a facility. Using handheld Smart Phones & Tablets, we rate nine HVAC elements.!14

15 HVAC Condition Assessments When field assessments are complete, the ratings are placed into a Sequel Server (SQL) database, where the model converts the assessed condition ratings into two useful metrics: System Condition Index Rating (SCI) Facility Condition Index Rating (FCI)!15

16 System Condition Index Rating (SCI) SCI is a benchmark to enable an objective comparison of HVAC systems. The higher the index, the poorer the system condition. CES can set targets for improved conditions; for example, to reduce the SCI to an acceptable level and to have a benchmark to measure progress or failure.!16

17 Facilities Condition Index Rating (FCI) The FCI provides a readily available and valid indication of the relative condition of a single facility or group of Facilities. It also enables the comparison of conditions with other facilities or groups of facilities. The higher the FCI, the worse the conditions.!17

18 Condition Assessment Recommendations Recommendations are prioritized based on broad descriptive categories and are as follows: Program & Operational (P&O) Recommendations Economy & Efficiency (E&E) Recommendations Liability Recommendations!18

19 Program & Operational Recommendations P&O Recommendations are actions necessary to support planned maintenance and operational requirements. P&O recommendations establish the core of CES s needs-based HVAC maintenance program!19

20 Liability & Economy/Efficiency Recommendations: Liability Recommendations are special matters requiring early attention to remove jeopardy through life safety, property damage, or regulatory actions. E&E Recommendations will result in immediate or eventual cost savings.!20

21 Life Cycle Cost The Life Cycle Cost (LCC) of an asset is defined as the total discounted dollar cost of owning, operating, maintaining, and disposing of a building or a building system over a period of time, according to The National Institute of Standards and Technology (NIST) Handbook.!21

22 Break!22

23 Life Cycle Cost Analysis (LCCA) LCCA is especially useful when project alternatives that fulfill the same performance requirements, but differ with respect to initial costs and operating costs, have to be compared in order to select the one that maximizes net savings.!23

24 LCCA - Inputs & Results LCCA Inputs: Total Installed Costs Annual Operating Expense Lifetime Discount Rate Electricity Price Trend LCCA Results: Payback Period Lifetime Operating Expense Life Cycle Cost!24

25 Total Installed Costs The total installed cost to the customer is defined by the equipment price and customer price to install equipment.!25

26 Equipment Energy Consumption The equipment energy consumption is the site energy use associated with providing spaceconditioning to the building. The power demand is the maximum power requirement of the equipment (more commonly known as the peak demand) for a specific period of time.!26

27 Equipment Efficiency The energy efficiency ratio (EER) is the efficiency descriptor for commercial unitary air conditioners.!27

28 Electricity Price Trends The Energy Information Administration s (EIA) Annual Energy Outlook 2003 (AEO2003) is used to forecast electricity prices into the future!28

29 Maintenance Costs The maintenance cost is associated with general maintenance (e.g., checking and maintaining refrigerant charge levels and cleaning heat exchanger coils.!29

30 Repair Costs The cost associated with repairing or replacing components that have failed.!30

31 Equipment Lifetime The age at which the air-conditioning equipment is retired from service.!31

32 Discount Rate The rate at which future expenditures are discounted to establish their present value Cost of capital is the weighted average of the cost to the firm of equity and debt financing!32

33 Simple Payback Metrics The payback period (PBP) is the amount of time it takes the consumer to recover the assumed higher purchase expense of more energy-efficient equipment as a result of lower operating costs. Simple payback period does not take into account changes in operating expense over time or the time value of money; that is, the calculation is done at an effective discount rate of 0 percent Simple Payback Analysis Annual Operating Savings Simple Payback Period Return on Investment!33

34 Life Cycle Cost Metrics Includes long-term maintenance and replacement costs. Simple Payback Analysis examines only initial costs and annual savings. Life Cycle Cost Metrics Net Present Savings Savings to Investment Ratio Discounted Payback Period (years) Adjusted Internal Rate of Return!34

35 Net Present Value NPV is a measure of the investment's financial worth to the organization, taking into account the preference for receiving cash flows sooner rather than later. A positive NPV is the net gain to the organization from making the investment. If an organization has two or more investment opportunities, the financially sound decision is to pick the one with the greatest NPV. Net present value (NPV) is a measure of investment worth that explicitly accounts for the time value of money. NPV is computed from the stream of cash flows resulting from the investment. Cash flows are adjusted (or "discounted") so as to place relatively greater value on near-term cash flows and relatively lesser value on cash flows that are more distant in the future.!35

36 SIR Savings to Investment Ratio (SIR) this is the percent of money recovered from the system generation compared to the initial investment cost and ongoing O&M costs, with reference to a specific desired payback period.!36

37 Internal Rate of Return (IRR) Internal Rate of Return indicates the discount rate at which the project becomes cost neutral. A higher number indicates a better investment.!37

38 Discounted Payback Discounted Payback Period includes longterm maintenance and replacement costs, and as such represents a more complete estimate of the payback period than the Simple Payback Period. Period!38

39 Thank You! Q&A!39