The Life Cycle Cost (LCC) module is an open source calculation tool developed by SP Technical Institute of Sweden.
• Total life cycle cost for district, k€
• Average life cycle cost for district, k€/building
• Average no. of payback years for buildings in the district, years/building
• Life cycle cost for each building, k€
• Payback years for each building, years
LCC analysis is used to compare different investment alternatives
Life cycle cost analysis is a tool to determine the most long-term cost-effective options among different competing investment alternatives. This means that both the initial investment and installation costs are taken into account as well as the yearly costs such as energy costs, costs for maintenance work etc. In this way a more fair comparison can be made between an option with high initial investment cost and low annual cost versus an option with lower investment cost but higher annual running cost. The LCC analysis will determine whether an investment is profitable and hence guide future investment decisions for housing owners.
This is how the LCC module works
Based on calculations of the buildings’ energy demand of different alternatives, estimated in one of the energy calculation modules in the Ecodistr-ICT IDSS platform, the LCC module adds an energy cost perspective of different energy measures. The LCC module has been developed to allow for a Present Value LCC calculation. A calculation period is chosen (typically 20-30 years for buildings) during which all the investment costs for the retrofitting/energy-efficient measures and the yearly energy and maintenance costs, including residual values calculated at the end, are discounted to a present value. Assumptions about expected life spans of components as well as yearly energy price increases are included in the calculation. Any revenues from locally produced electricity (e.g. from solar panels) sold to the grid are also taken into consideration.
A simplified payback period can also be calculated from the LCC present value based on yearly rent incomes. This means, how long time it will take for the investments to be paid back with the revenues from the residents rents. This can be used as a complement to the life cycle cost to compare the different investment alternatives; however generally it should not be used as a stand-alone indicator as measures with low investment costs and short lifespans will come out very favourable in payback period calculations.
The calculations are made per building for which a number of pre-defined measures can be chosen for each investment alternative. For each planned measure (component) the expected lifespan, investment cost and installation cost has to be given by the user. (The module does not include any default cost or lifespan values.)
Interdependence to other modules
The LCC module is dependent on energy consumption data from one of energy calculation modules used in the IDSS.
References and more information
The tool is based on the regulations:
- COMMISSION DELEGATED REGULATION (EU) No 244/2012 of 16 January 2012, supplementing Directive 2010/31/EU of the European Parliament and of the Council on the energy performance of buildings by establishing a comparative methodology framework for calculating cost-optimal levels of minimum energy performance requirements for buildings and building elements
- NOTICES FROM EUROPEAN UNION INSTITUTIONS, BODIES, OFFICES AND AGENCIES EUROPEAN COMMISSION, Guidelines accompanying Commission Delegated Regulation (EU) No 244/2012 of 16 January 2012 supplementing Directive 2010/31/EU of the European Parliament and of the Council on the energy performance of buildings by establishing a comparative methodology framework for calculating cost-optimal levels of minimum energy performance requirements for buildings and building elements (2012/C 115/01)
For recommendations on lifespans, see
- SS-EN 15459:2007 “Energy performance of buildings – Economic evaluation procedure for energy systems in buildings”
List of input data
The input data used in the LCC calculations are listed below. The data are categorised depending on if they are district or building specific. That input data is applicable on district level means that these values are used for all the buildings’ LCC calculations.
The data below has to be filled in for each alternative investment; usually the district data stays the same.
|Applicable to district||Unit||Explanations|
|Discount rate (excl. inflation)||%||This data is mandatory for all calculations.|
|Calculation period||years||Usually 20-30 years for buildings. This data is mandatory for all calculations.|
|Electricity price||€ / kWh||Need to be filled if there is electricity consumed in the buildings.|
|District heating price||€ / kWh||Need to be filled if there is district heating consumed in the buildings.|
|Natural gas price||€ / kWh||Need to be filled if there is natural gas consumed in the buildings.|
|Other fuel price||€ / kWh||Need to be filled if there is any other fuel consumed in the buildings.|
|Feed in tariff price||€ / kWh||Energy price for electricity sold to the grid.|
|Electricity price increase||% per year||Yearly electricity price increase beyond general inflation.|
|District heating price increase||% per year||Yearly district heating price increase beyond general inflation.|
|Natural gas price increase||% per year||Yearly natural gas price increase beyond general inflation.|
|Other fuel price increase||% per year||Yearly other fuel price increase beyond general inflation.|
|Feed in tariff price increase, electricity||% per year||Yearly electricity price increase beyond general inflation for electricity sold to the grid.|
|Rent increase||% per year||Increase beyond general inflation. Used for calculation of payback period.|
|Applicable to building||Unit||Explanations|
|Fixed cost for electricity||k€ / year||Yearly fixed cost from electricity supplier.|
|(Electricity consumption)||kWh / year||Building’s yearly electricity consumption.
From energy calculation module.
|(Delivered electricity)||kWh / year||Building’s yearly electricity production that will be delivered to the grid.
From energy calculation module.
|Fixed cost for district heating||k€ / year||Yearly fixed cost from district heating supplier.|
|(District heating consumption)||kWh / year||Building’s yearly district heating consumption. From energy calculation module.|
|Fixed cost for natural gas||k€ / year||Yearly fixed cost from natural gas supplier.|
|(Natural gas consumption)||kWh / year||Building’s yearly natural gas consumption.
From energy calculation module.
|Fixed cost for other fuel||k€ / year||Yearly fixed cost from supplier of other fuel.|
|(Other fuel consumption)||kWh / year||Building’s yearly consumption for other fuels. From energy calculation module.|
|Operating and maintenance costs||k€ / year||Yearly operating and maintenance costs.|
|Rent incomes||k€ per year||Used for calculation of payback period.|
|Applicable to all new building components*||Unit||Explanations|
|Lifespan of component||years||Examples of technical lifespans can be found in SS-EN 15459:2007.|
|Initial investment cost||k€|
|Installation cost (including possible cost of delivery)||k€|
*The pre-defined components are district heating substations, heat pumps, bore holes (if geothermal heat pump is installed), circulation pump, insulation material on attic/roof, insulation material on wall, insulation material floor, windows, doors, ventilation ducts, ventilation airflow assembly, ventilation air distribution housings, radiators, water taps, piping system – Cu, piping system – PEX, piping system – PP, piping system – cast iron, piping system – galvanised steel, piping system – relining, electrical wiring, energy production facility (e.g. PV panels), condensing boiler
Information for programmers
For more information about the LCC module for programmers, turn to link >>.