How significant is non-operating cost in the TCO of an HVAC system?

Cost of ownership, or the lifetime cost of HVAC equipment is usually the total of purchase price and operating cost. However, ABB Drives argues that the costs of an HVAC system that is not running due to failure are also important, but often overlooked.

Clearly, the two major elements in total cost of ownership (TCO) are the capital cost and the operating cost, but owners need also to consider downtime costs include tangible expenses including loss of productivity and the cost of emergency repairs, disruption and inconvenience. Intangible costs can result in damage to reputation, loss of worker productivity and even problems renting-out property.

CAPITAL COST

Initial costs of the HVAC systems whether for new construction or a retrofit represent around 20% of total cost of ownership (TCO). Choosing the right products matter and the decisions you make at the beginning of the purchase journey undoubtedly have impact on TCO.

A good air-handling unit should last more than 25 years when installed and maintained correctly. However, ensuring correct maintenance and operation is problematic, and problems will arise. If the result is drives and motors needing to be replacing prematurely, then TCO is adversely affected.

OPERATING COST

In most buildings HVAC systems account for up to 50% of the total energy consumption. Ensuring optimal energy use is key to managing the energy used by the application. Selecting the right combination of variable speed drives and high efficiency motors will improve productivity.

MAINTENANCE COST

ABB believes the cost of maintenance should not be included as an operating cost as spending on maintenance does not increase the whole life cost. In their opinion, the opposite is the case. Preventive maintenance pays for itself by avoiding the high cost of unplanned downtime. Preventive maintenance gives building owners the advantage of paying less due to proper planning.

Cost of not running

This is the most overlooked aspect of ownership. The cost of an interruption can range from loss of production to loss of reputation. The important aspect here is how to minimise the cost of not running.  The cost of maintenance is always less than the cost of failure. Rather than rely on a rapid response to failure, it makes more sense to reduce in the first place. Typically, the cost of emergency repairs are two to three times more than planned maintenance activities, so a structured maintenance regime will drive-down the TCO.

Many modern businesses rely on HVAC to maintain their productivity levels, and reliability is critical. HVAC systems that are not running properly will have a significant impact on critical zones. For such applications, the ACH580 enables customers to create the optimum micro-climate within buildings for efficiency and at the same time to reduce TCO in:

– In commercial buildings, where loss of productivity which will negatively impact tenant satisfaction and ultimately reduce rent and the ability to lease space.

– In universities, where a climate that does not support concentration and learning will reduce attendance and reduce tuition paid.

– In healthcare, where the lack of safe climate may reduce procedures and impact upon hospital reputation.

– Modern data centres that rely on HVAC to control machine temperatures, and unscheduled downtime is unthinkable and very expensive.

Download ACH580 Application Guide on Managing total cost of ownership of HVAC systems