The Sample Project
Cost of Ownership
In addition to the Operating Cost comparison you just performed, LoopLink provides the tools to do a complete life cycle calculation for a system and compare it against a single conventional technology. 
The life cycle cost will take into account the initial installation costs as well as the equipment replacement costs across 30 years accounting for normal rates of inflation.
For this assignment we will be comparing our GSHP system to a Fuel Oil Furnace w/ A/C. Click on the Cost of Ownership link to get started.
| Conventional System: | Fuel Oil Furnace w/ A/C |
|---|---|
| Retrofit: | Leave unchecked |
| Fuel Oil Inflation Rate | 4.5% |
| Installation Cost: | $15,000.00 |
| Incentives: | $0.00 |
| Electric Inflation Rate | 3.0% |
| Installation Cost: | $45,000.00 |
| Incentives: | $13,500.00 |
| Home Purchase Price: | $450,000.00 |
| Mortgage Interest Rate: | 5.0% |
| Down Payment: | $90,000.00 |
| Term: | 30 years |
| Account for System Life Cycle: | Checked |
|---|---|
| Fuel Oil Furnace w/ A/C Service Life: | 14 years |
| Fuel Oil Furnace w/ A/C Equipment Cost: | 65% of Installation Cost |
| Fuel Oil Furnace w/ A/C Loan Interest Rate: | Default |
| Fuel Oil Furnace w/ A/C Loan Term: | 0 years |
| Fuel Oil Furnace w/ A/C Down Payments: | $0.00 |
| GSHP Service Life: | 28 years |
| GSHP Equipment Cost: | 35% of Installation Cost |
| GSHP Loan Interest Rate: | Default |
| GSHP Loan Term: | 0 years |
| GSHP Down Payments: | $0.00 |
The economics inputs are not always the best understood for system designers so now that you have entered the data and saved the page, we’ll go through a short explanation of some of the inputs.
System Details
Retrofit: This check box toggles whether you are working with a new construction or an existing home. The primary difference from the calculations point of view is whether or not the cost of the system will be included in the mortgage or handled as a separate loan.
Fuel Inflation & Installation Costs
Fuel Inflation Rate: This information can normally be obtained through the local energy provider. This is a rough estimate of the annual percentage of increase the price of fuel will experience.
Installation Cost: This is the total cost for installing the system and should include plumbing, duct work, equipment etc.
Incentives: There are often federal, state and even local government incentives for installing energy efficient heating and cooling systems. These incentives are typically one time only savings so later when we start to account for life cycle costs we don’t deduct these incentives from the equipment cost.
Equipment Replacement Details
Service Life: We have provided the ASHRAE table of tested service life for multiple different HVAC systems for your reference. As the footnote on the table states, use this information with caution. Many of the values are based on studies from 1978. The data for the 2005 study is still pending but will be included in LoopLink as it becomes available.
Equipment Cost: This is the percentage of the original installation cost that just replacing the equipment represents. Inflation is built into the calculations so you only need to figure out the percentage based on the original cost.
Buttons on this Page
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Opens Equipment Service Life table in a new browser window. |
Operating Cost Comparison