October 2019
Evaluating life cycle cost of various HVAC systems
on the basis of energy use, first cost and life expectancy
Summary and findings
This study analyzes seven elementary and middle schools
located in South Carolina Climate Zone 3A. The aim of this
study is to anecdotally compare and contrast the different
HVAC systems used for each of the facilities in terms of a
30-year life cycle cost analysis (LCCA). This cost analysis
includes up-front installed cost, replacement cost allocations
and ongoing energy and maintenance costs. This study
focused on the following basic HVAC system types: variable
refrigerant flow heat pumps (VRF), water source heat pumps
(WSHP), ground source heat pumps (GSHP), direct expansion
rooftop units (DX RTU), water-cooled chillers (WCC) and
air-cooled chillers (ACC).
From a life cycle cost perspective, the primary drivers of a
purely economic decision of HVAC system type are installed
cost and energy cost. In this study, maintenance cost only
made up 4 to 8% of the overall life cycle cost of the buildings.
However, a maintenance department’s unfamiliarity and
uncertainty with any given system will likely start to show in the
form of increased utility cost from overrides and other changes
to the system design. For that reason, maintenance input into
system selection is still a very important economic factor even
if it does not show up in the data. For additional information,
see the HVAC System Analysis and Selection chapter of the
ASHRAE Handbook — HVAC Systems and Equipment.
Figure 1
Cost/SF Comparison of Studied Buildings
For all the buildings included in this study, utility costs (electric
and natural gas) were collected between 2016 and 2018, and
maintenance costs were averaged over three years (where
available). Since the buildings studied were built in different
years, construction cost estimates for each mechanical system
were gathered from area cost consultants and engineers for
a more accurate comparison. The utility rates and square
footages of these facilities were also normalized to remove
any other outside factors. The average electric rate ($/kWh)
and natural gas rate ($/therm) from the sample buildings
were multiplied by each building’s electric and natural gas
consumption to calculate a normalized energy cost ($/square
foot) for each building. This minimizes the effect of differing rate
structures among facilities. Maintenance and installed cost were
also divided by each building’s square footage for comparison.
The results of this analysis can be seen in Figure 1. The lowest
life cycle cost building in this sample was the WSHP followed
by GSHP. Water-cooled and air-cooled chiller schools finished
in fourth and fifth places, respectively. The VRF middle school
had the sixth lowest life cycle cost; the DX RTU elementary
school was in seventh place. In last place was an elementary
school that was retrofitted with VRF heat pumps. As shown
in Figure 1, replacement allocations had a significant impact
on the life cycle cost analysis (see yellow bars) and drastically
reduced the cost effectiveness of equipment with 15-year life
expectancies.
Other studies have shown the ability of ground source heat
pumps to use much less energy than variable refrigerant flow
heat pumps (see 2013 study by Oklahoma State University and
Oak Ridge National Laboratory of the ASHRAE Headquarters
Building). However, in this study, the school that used ground
source heat pumps had thermally contaminated wells that
likely contributed to excessive energy use.
Equipment replacement allocations were applied to each
system with the following equipment life assumptions: DX
RTU and VRF (15 years), WSHP and GSHP (24 years), WC and
ACC (25 years). This allocation was reached by estimating
Figure 2
10-Year Life Cycle Cost Analysis
Figure 3
15-Year Life Cycle Cost Analysis
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the replacement cost to be 50% of the original construction
cost (e.g., $31 x 50% = $15.50/SF). However, a 3% escalation
factor was used to adjust this cost for the future: $24.15/SF in
15 years. For equipment lasting 24 and 25 years, applying this
full replacement cost at the time of replacement would give
a distorted view for these units in the 30-year life cycle cost
analysis, so this was prorated to represent the replacement
cost during the remaining years of the life cycle cost analysis
only. The age of equipment can vary drastically, and ASHRAE
has created an online database to provide service life of
typical HVAC equipment as a part of ASHRAE Research Project
1237-TRP along with information in the ASHRAE Handbook —
HVAC Applications.
Some additional factors are likely at play within this data set
considering it is compiled from various sources (e.g., lighting
technology, outside air delivery, etc.). However, HVAC systems
can make up 50% of the overall energy use of K-12 buildings,
according to data from ENERGY STAR.
 Figure 4
20-Year Life Cycle Cost Analysis

Figure 5
25-Year Life Cycle Cost Analysis

Graphical results for 10-,15-, 20- and 25-year life cycles can The installed cost of the mechanical system is estimated to be
be seen in Figures 2-5. Please note: A negative replacement around $42/SF in 2019 dollars, according to a cost consultant
cost corresponds to the value associated with the remaining in the area. Upfront cost of DOAS units were reduced as a
equipment life. result of using the IAQ method instead of the ventilation rate
procedure (VRP) as outlined in ASHRAE 62.1. When the amount
VRF middle school of outside air needed is reduced, there is a commensurate
reduction in the amount of energy use and costs. The
This new construction school is primarily served by a VRF
ventilation air load requirements can vary significantly, but the
multizone system with heat recovery. Dedicated outdoor air
latent load is considerable for this facility’s location in Climate
system (DOAS) units separately supply necessary ventilation
Zone 3A (see Atlanta in Figure 6). There is a twofold benefit to
air for occupants and building pressure. Bipolar ionization air
applying the IAQ method for this building: a reduction in first
cleaning allows for reduced outside air delivery through these
cost and also ongoing annual energy cost. However, changes
DOAS units in accordance with the indoor air quality (IAQ)
to the IAQ method are currently being evaluated that would
method as outlined in ASHRAE 62.1. Some nonclassroom
require CO2 less than or equal to 1,100 ppm in the space.
portions of the building, such as the administrative offices,
gymnasium and cafeteria, are served by traditional DX RTUs
without DOAS units.

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 Albuquerque Latent ton-hours per scfm per year
Boston
Sensible ton-hours per scfm per year
Detroit
Minneapolis
Pittsburgh
New York
Chicago
Las Vegas
Indianapolis
Lexington
Colorado Springs
Omaha
Phoenix
St. Louis
Oklahoma City
Richmond
Raleigh
Atlanta
Nashville
Little Rock
Charleston
San Antonio
New Orleans
Miami

5 10 15 20 25
Figure 6
Cumulative Dehumidification and Cooling Loads
from Ventilation Air
Latent and Sensible Ton-Hours Per scfm per year

As expected, this building had a very low annual site energy

use intensity of 31.5 kBtu/SF and energy cost of $0.78/SF based
on data between October 2016 and June 2018. This is 48%
better than the national median for elementary and middle
schools (58.2 kBtu/SF), according to ENERGY STAR’s March
2016 publication. Additionally, it is 36% better than an ASHRAE
90.1-2013 compliant K-12 building in Climate Zone 3A. As a
point of comparison, the theoretical minimum site EUI for a
K-12 building in Climate Zone 3A is 23 kBtu/SF (Figure 7).

Maintenance of the multizone VRF system can be more Figure 7

complex than a traditional DX system, so some maintenance EUI Comparison
has been contracted to outside sources. This comes at an (K-12 in Climate Zone 3A unless otherwise noted)
increased cost, but ensures efficient, reliable operation of
equipment. The district maintenance cost for the HVAC systems
at this school averaged $7,623/year, but contract maintenance
totaled approximately $10,000/year, which equates to $0.0986/
SF annually. As a comparison, the average maintenance cost
in schools is $0.112/SF, according to ASHRAE Research Project
1237-TRP.

A 30-year life cycle cost analysis of this building shows that

the energy cost and installation cost are the primary economic
drivers. This assumes a 3% escalation for maintenance/
replacement cost and 5% for energy, with no other time
value of money adjustments. There was a replacement cost
allocation assigned to the VRF equipment in recognition that
this equipment will likely need to be replaced in year 15. This
allocation was reached by estimating the replacement cost to
be 50% of the original construction escalated at 3% per year Figure 8
30-Year Life Cycle Cost for VRF Middle School
(Figure 8).
(5% Escalation on Energy and 3% on Maint/Replace)
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WSHP Elementary School
This elementary school is primarily served by a water source
heat pump system with condenser water reheat. The installed
cost of this mechanical system is estimated to be $35/SF in
2019 dollars, according to an engineer in the area.

As expected, this building had a low energy use intensity and

a cost of 40.7 kBtu/SF and $0.98/SF annually averaged over
FY 2017 and FY 2018. This is 30% better than the national
median for elementary and middle schools (58.2 kBtu/
SF), according to ENERGY STAR’s March 2016 publication.
Additionally, it is 17% better than an ASHRAE 90.1-2013
compliant K-12 building in Climate Zone 3A. As a point of
comparison, the theoretical minimum EUI for a K-12 building
in Climate Zone 3A is 23 kBtu/SF (Figure 9). Figure 10
30-Year Life Cycle Cost for WSHP Elementary School
(5% Escalation on Energy and 3% on Maint/Replace)

VRF Elementary School (Retrofit)

This elementary school located in South Carolina Climate
Zone 3A retrofitted classrooms with VRF Multizone units with
heat recovery. Dedicated outdoor air system (DOAS) units
supply the ventilation air necessary for occupants and building
pressure. The installed cost of the mechanical system is
estimated to be around $42/SF in 2019 dollars, according
to a cost consultant in the area.

This building had an annual site energy usage intensity of

Figure 9
EUI Comparison
(K-12 in Climate Zone 3A unless otherwise noted)
Maintenance of the water source heat pump system is
estimated to be $0.112/SF based on the ASHRAE Research
Project 1237-RP. This equates to $7,254 of maintenance cost
per year.
33.1 kBtu/SF and energy cost of $0.96/SF between October
2016 and June 2018. This is 43% better than the national
median for elementary and middle schools (58.2 kBtu/
SF), according to ENERGY STAR’s March 2016 publication.
Additionally, it is 33% better than an ASHRAE 90.1-2013
compliant K-12 building in Climate Zone 3A. For comparison,
the theoretical minimum site EUI for a K-12 building in Climate
Zone 3A is 23 kBtu/SF (Figure 11).

A 30-year life cycle cost analysis of this building shows

that the energy cost and installation cost are the primary
economic drivers. This assumes a conservative 3% escalation
for maintenance/replacement cost and 5% for energy, with
no other time value of money adjustments. There was a
replacement cost allocation assigned to the WSHP equipment
in recognition that this equipment will likely need to be
replaced in year 24. This allocation was reached by estimating
the replacement cost to be 50% of the original construction
escalated at 3% per year. Applying this full replacement cost
at year 24 would give a distorted view for these units in the
30-year life cycle cost analysis, so this was prorated to
represent the replacement cost during the remaining
10 years of the life cycle cost analysis only (Figure 10). Figure 11
EUI Comparison
(K-12 in Climate Zone 3A unless otherwise noted)

5
Maintenance of the multizone VRF system is more complex
than a traditional DX system, so some maintenance has
been contracted to outside sources. This obviously comes
at an increased cost but ensures efficient, reliable operation
of equipment. The district maintenance cost for the HVAC
systems at this school averaged $14,337/year, but contract
maintenance totaled approximately $5,000/year, which
equates to $0.2111/SF annually. As a comparison, the average
maintenance cost in schools is $0.112/SF, according to an
ASHRAE Research Project 1237-TRP.

A 30-year life cycle cost analysis of this building shows that

the energy cost and installation cost are the primary economic
drivers. This assumes a 3% escalation for maintenance/
replacement cost and 5% for energy with no other time
value of money adjustments. There was a replacement cost
allocation assigned to the VRF equipment in recognition that
this equipment will likely need to be replaced in year 15. This
allocation was reached by estimating the replacement cost to
be 50% of the original construction escalated at 3% per year
(Figure 12).
Figure 13
EUI Comparision
(K-12 in Climate Zone 3A unless otherwise noted)
Maintenance of the water source heat pump system is
estimated to be $0.112/SF based on the ASHRAE Research
Project 1237-RP. This equates to $7,254 of maintenance cost
per year.
A 30-year life cycle cost analysis of this building shows
that the energy cost and installation cost are the primary
economic drivers. This assumes a conservative 3% escalation
for maintenance/replacement cost and 5% for energy, with
no other time value of money adjustments. There was a
replacement cost allocation assigned to the GSHP equipment
in recognition that this equipment will likely need to be
replaced in year 24. This allocation was reached by estimating
the replacement cost to be 50% of the original construction
escalated at 3% per year. Applying this full replacement cost
at year 24 would give a distorted view for these units in the
30-year life cycle cost analysis, so this was prorated to
represent the replacement cost during the remaining
10 years of the life cycle cost analysis only (Figure 14).

Figure 12
30-Year Life Cycle Cost for VRF Elementary School
(5% Escalation on Energy and 3% on Maint/Replace)

GSHP Elementary School

This elementary school is primarily served by a ground source
heat pump system. The installed cost of the mechanical
system is estimated to be $50/SF in 2019 dollars. The ground
wells used for this system have been thermally contaminated
and can no longer provide adequate water temperatures for
cooling during the summer. To continue to cool the space,
the district plans to add a cooling tower to the system. The
Figure 14
system currently has higher energy use levels than should be
30-Year Life Cycle Cost for GSHP Elementary School
expected from ground source heat pumps.
(5% Escalation on Energy and 3% on Maint/Replace)
This building still had an energy usage level of 34.4 kBtu/SF
and $0.79/SF annually between October 2016 and June 2018.
This is 41% better than the national median for elementary and
middle schools (58.2 kBtu/SF), according to ENERGY STAR’s
March 2016 publication. Additionally, it is 30% better than an
ASHRAE 90.1-2013 compliant K-12 building in Climate Zone
3A. As a point of comparison, the theoretical minimum site
EUI for a K-12 building in Climate Zone 3A is 23 kBtu/SF
(Figure 13).

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DX RTU Elementary School
This elementary school is primarily served by direct expansion
(DX) Rooftop Units (RTU) feeding VAV boxes with hot water
heat from natural gas boilers.

The installed cost of the mechanical system is estimated to

be $31/SF in 2019 dollars based on cost consultant data for
upstate South Carolina. The cost of these systems can vary
widely based on the unit construction, efficiency, size, etc.
However, this system is typical of an institutional K-12 building
with slightly higher upfront cost but improved longevity and
efficiency.

This building had an energy use intensity averaging

50.8 kBtu/SF and $0.96/SF annually between October 2016
and June 2018. This is 13% better than the national median Figure 16
for elementary and middle schools (58.2 kBtu/SF), according 30-Year Life Cycle Cost for DX RTU Elementary School
to ENERGY STAR’s March 2016 publication. It is slightly worse (5% Escalation on Energy and 3% on Maint/Replace)
(4%) than an ASHRAE 90.1-2013 compliant K-12 building in
Climate Zone 3A (Figure 15).
WCC Elementary School
This elementary school is cooled by water-cooled chillers
(WCC) serving rooftop units (RTU), while hot water heat is
provided by natural gas (NG) boilers.

The installed cost of the mechanical system is estimated to

be around $45/SF in 2019 dollars. An elementary school of
typical size (<100k SF) is less common than other systems due
to increased upfront cost, reduced run hours and less options
for smaller tonnage water-cooled chillers.

This building had a site energy use intensity averaging

Figure 15
EUI Comparison
(K-12 in Climate Zone 3A unless otherwise noted)
The maintenance cost for the HVAC systems at this school
averaged $13,929/year, which equates to $0.1208/SF annually.
As a comparison, the average maintenance cost in schools is
$0.112/SF, according to an ASHRAE Research Project 1237-TRP.
43.8 kBtu/SF and $1.04/SF annually between October 2016
and June 2018. This is 25% better than the national median
for elementary and middle schools (58.2 kBtu/SF), according
to ENERGY STAR’s March 2016 publication. It is only slightly
(11%) better than an ASHRAE 90.1-2013 compliant K-12
building in Climate Zone 3A (Figure 17).

A 30-year life cycle cost analysis of this building shows that

the energy cost and installation cost are the primary economic
drivers. This assumes a conservative 3% escalation for
maintenance/replacement cost and 5% for energy with no other
time value of money adjustments. There was a replacement cost
allocation assigned to the DX RTU equipment in recognition
that this equipment will likely need to be replaced in year 15.
This allocation was reached by estimating the replacement cost
to be 50% of the original construction escalated at 3% per year Figure 17
(Figure 16). EUI Comparison
(K-12 in Climate Zone 3A unless otherwise noted)

7
The maintenance cost for the HVAC systems at this school
averaged $8,887/year, which equates to $0.0993/SF annually.
As a comparison, the average maintenance cost in schools
is $0.112/SF, according to an ASHRAE Research Project
1237-TRP.

A 30-year life cycle cost analysis of this building shows

that the energy cost and installation cost are the primary
economic drivers. This assumes a conservative 3% escalation
for maintenance/replacement cost and 5% for energy, with
no other time value of money adjustments. There was a
replacement cost allocation assigned to the WCC equipment
in recognition that this equipment will likely need to be
replaced in year 25. This allocation was reached by estimating
the replacement cost to be 50% of the original construction
escalated at 3% per year. Applying this full replacement cost Figure 19
EUI Comparison
at year 25 would give a distorted view for these units in the
(K-12 in Climate Zone 3A unless otherwise noted)
30-year life cycle cost analysis, so this was prorated to
represent the replacement cost during the remaining five
years of the life cycle cost analysis only (Figure 18). The maintenance cost for the HVAC systems at this school
averaged $15,542/year, which equates to $0.2175/SF annually.
As a comparison, the average maintenance cost in schools
is $0.112/SF, according to an ASHRAE Research Project
1237-TRP. This larger percentage of maintenance cost may
be due in part to the age of the building and complexity of the
HVAC system with many valves, dampers and fans attributed
to four-pipe air handlers with preheat, cooling and reheat coils
in every AHU, along with individual modulating outside air
dampers for each room.

A three-year life cycle cost analysis of this building shows that

Figure 18
30-Year Life Cycle Cost for WCC Elementary School
(5% Escalation on Energy and 3% on Maint/Replace)
ACC Elementary School
This elementary school is primarily conditioned by an
air-cooled chiller (ACC) and natural gas boilers serving air
handling units (AHU) in each classroom. The installed cost of
the mechanical system is estimated to be around $42/SF in
2019 dollars. The use of air-cooled chillers has become more
common as the efficiency and sound levels of air-cooled
chillers have improved over the years.
the energy cost and installation cost are the primary economic
drivers. This assumes a 3% escalation for maintenance/
replacement cost and 5% for energy, with no other time
value of money adjustments. There was a replacement cost
allocation assigned to the ACC equipment in recognition that
this equipment will likely need to be replaced in year 25. This
allocation was reached by estimating the replacement cost to
be 50% of the original construction escalated at 3% per year.
However, this was prorated to represent the replacement cost
during the remaining five years of the life cycle cost analysis
only (Figure 20).

This building had an energy use intensity averaging

46.8 kBtu/SF and $1.05/SF annually between October 2016
and June 2018. This is 20% better than the national median
for elementary and middle schools (58.2 kBtu/SF), according
to ENERGY STAR’s March 2016 publication. It is slightly (4%)
better than an ASHRAE 90.1-2013 compliant K-12 building
in Climate Zone 3A (Figure 19).

Figure 20
30-Year Life Cycle Cost for ACC Elementary School
(5% Escalation on Energy and 3% on Maint/Replace)

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