System Economics
Most people make a purchase to solve a real or perceived problem. They use economic evaluations to justify their decision. With chillers, problems can range from inadequate capacity, chiller failure or high energy bills to the fear of CFC issues. In this section we will address the economics of chiller alternatives. A number of factors influence the costs of owning and operating large water chillers. These include:
- Installed first cost, including any building modifications to accommodate one
particular alternative over others.
- Operating costs, including all the fuel, electric, and water costs (including
the acquisition, treatment, and disposal of sewered water) to accommodate one
alternative over others.
- Maintenance costs, including preventive maintenance and the monitoring of
refrigerants to minimize losses. Materials and supplies are also included here.
- Insurance and Property Taxes.
- Replacement Provisions, which takes into account the useful lives of the
alternatives.
- Financing, depreciation, and income taxes should also be considered. The
money invested has a time value (interest) and there are usually tax consequences
that affect decisions. It's usually a good idea to consult a tax accountant.
- Method of evaluation which reflects individual owner's needs, the process of evaluating incremental first costs, along with the costs of owning and operating the various alternatives. These methods range from a simple payback calculation to much more sophisticated life cycle cost (or its equivalent net present value) analysis, or internal rate of return computations.
Each of these factors may vary according to the individual project. Typically, economic analyses are best performed using a computer model or program specifically designed for this purpose. There are several available from the Electric Power Research Institute (such as COMTECH and MicroAxcess). Others are available from vendors (Trane) or APOGEE Interactive, Inc. Most programs are building oriented in that they estimate the hour-by-hour cooling loads for the building. Others compare several types of similarly sized chiller using an estimated annual load profile.
Select from these areas of interest . . .
