Transcript Document

Equivalent Uniform Annual Cost:
A New Approach to Roof Life Cycle Analysis
James L. Hoff, DBA
Firestone Building Products
Canadian Roofing Symposium
Calgary, Alberta
June 5, 2007
Life Cycle Cost
Problems
• How long do roofs last?
• How much do roofs cost?
• How do you compare roofs with
different service lives?
Life Cycle Cost Problems
How Long Do Roofs Last?
Average Service Life
Study
EPDM
Asphalt BUR
Cash (1997)
14.1 Years
17.4 Years
Schneider &
Keenan (1997)
17.7 Years
13.6 Years
Life Cycle Cost Problems
How Long Do Roofs Last?
Manufacturer’s Warranty Period
System
Asphalt BUR
Modified Bitumen
Single-Ply
Up to15 Years
Up to 20 Years
Up to 30 Years
Type IV Felt
Type VI Felt
See Below
MB Cap over
Non-MB Base
MB Cap over
MB Base
MB Cap over
Multiple Plies
45 Mil
60 Mil
80-90 Mil
Life Cycle Cost
System Details / Est. Min. Service Life
Service Life
(SL)
Based on
Warranty Period
(Years)
SYSTEM TYPE
SYSTEM DETAILS
Ballasted EPDM
45 Mil Unreinforced EPDM over 2" Polysio, Loosely Laid and Ballasted
15
Ballasted EPDM
60 Mil Unreinforced EPDM over 2" Polysio, Loosely Laid and Ballasted
20
Adhered EPDM
45 Mil Unreinforced EPDM over 2" Polyiso, Fully Adhered
15
Adhered EPDM
60 Mil Unreinforced EPDM over 2" Polyiso, Fully Adhered
20
Adhered EPDM
90 Mil Unreinforced EPDM over 2" Polyiso, Fully Adhered
30
Mech. Attached EPDM
45 Mil Unreinforced EPDM over 2" Polyiso, Mechanically Attached
15
Mech. Attached EPDM
45 Mil Reinforced EPDM over 2" Polyiso, Mechanically Attached
20
Mech. Attached Thermoplastic
45 Mil Reinf. T'Plastic over 2" Polyiso, Mechanically Attached
15
Mech. Attached Thermoplastic
60 Mil Reinf. T'Plastic over 2" Polyiso, Mechanically Attached
20
Mech. Attached Thermoplastic
80 Mil Reinf. T'Plastic over 2" Polyiso, Mechanically Attached
30
Modified Bitumen
Mopped Fiberglass Base / Mopped SBS Cap over Cover Board & 2" Polyiso
15
Modified Bitumen
Mopped SBS Base / Mopped SBS Cap over Cover Board & 2" Polyiso
20
(2) Mopped SBS Base / Mopped SBS Cap over Cover Board & 2" Polyiso
30
Built-Up Roofing
4-Ply IV w/ Gravel over Cover Board & 2" Polyiso
15
Built-Up Roofing
4-Ply VI w/ Gravel over Cover Board & 2" Polyiso
20
Modified Bitumen
System details and warranty period based on data from NRCA 2004-05 Low-Slope Roofing Materials Guide (2005) and
published manufacturer data.
Life Cycle Cost Problems
How Much Do Roofs Cost?
• Initial Cost
• Maintenance Cost
• Replacement Cost
Life Cycle Cost
Standard Life Cycle Cost Model
LCC = IC + MCPV + RCPV
Where:
LCC = Life cycle cost ($/ sq. ft.)
IC = Initial Cost
MCPV = Present value of all future maintenance costs
RCPV = Present value of future removal and replacement costs
In other words, how much money in today’s
dollars do I need to pay all the costs associated
with this roof over its service life?
Life Cycle Cost
Standard Life Cycle Cost Model
Replacement
Cost
Initial
Cost
Maintenance
Cost
$
Year 1
Year 2
Year 3
Year 4
$
Present Value
Year 5
Year N
Standard Life Cycle Cost Model
How to Calculate Standard LCC:
1. Determine System / Service Life
2. Determine Cost Elements
a. Initial Cost
b. Annual Maintenance Costs
c. Replacement Cost
3. Adjust Cost Elements to Present Value
a. Determine Cost of Money / Interest Rate
b. Discount Replacement Cost to Present Value
c. Annuitize Maintenance Cost to Present Value
4. Add Adjusted Cost Elements Together
Standard Life Cycle Cost Model
Step 1: Determine System / Service Life
Service Life
(SL)
Based on
Warranty Period
(Years)
SYSTEM TYPE
SYSTEM DETAILS
Ballasted EPDM
45 Mil Unreinforced EPDM over 2" Polysio, Loosely Laid and Ballasted
15
Ballasted EPDM
60 Mil Unreinforced EPDM over 2" Polysio, Loosely Laid and Ballasted
20
Adhered EPDM
45 Mil Unreinforced EPDM over 2" Polyiso, Fully Adhered
15
Adhered EPDM
60 Mil Unreinforced EPDM over 2" Polyiso, Fully Adhered
20
Adhered EPDM
90 Mil Unreinforced EPDM over 2" Polyiso, Fully Adhered
30
Mech. Attached EPDM
45 Mil Unreinforced EPDM over 2" Polyiso, Mechanically Attached
15
Mech. Attached EPDM
45 Mil Reinforced EPDM over 2" Polyiso, Mechanically Attached
20
Mech. Attached Thermoplastic
45 Mil Reinf. T'Plastic over 2" Polyiso, Mechanically Attached
15
Mech. Attached Thermoplastic
60 Mil Reinf. T'Plastic over 2" Polyiso, Mechanically Attached
20
Mech. Attached Thermoplastic
80 Mil Reinf. T'Plastic over 2" Polyiso, Mechanically Attached
30
Modified Bitumen
Mopped Fiberglass Base / Mopped SBS Cap over Cover Board & 2" Polyiso
15
Modified Bitumen
Mopped SBS Base / Mopped SBS Cap over Cover Board & 2" Polyiso
20
(2) Mopped SBS Base / Mopped SBS Cap over Cover Board & 2" Polyiso
30
Built-Up Roofing
4-Ply IV w/ Gravel over Cover Board & 2" Polyiso
15
Built-Up Roofing
4-Ply VI w/ Gravel over Cover Board & 2" Polyiso
20
Modified Bitumen
System details and warranty period based on data from NRCA 2004-05 Low-Slope Roofing Materials Guide (2005) and
published manufacturer data.
Standard Life Cycle Cost Model
Step 2: Determine Cost Elements
SERVICE LIFE
INITIAL COST
RELPACEMENT COST
MAINTENANCE COST
(SL)
(IC)
(RC)
(MC - Annual)
Based on
Based on 2005
Equals IC
Based on
Warranty Period
Contractor Survey
Plus $1.00 Disposal Cost
Cash (1997) Study
(Years)
($ / SF)
($ / SF)
($ / SF / YR)
Ballasted EPDM
15
$2.85
$3.85
$0.20
Ballasted EPDM
20
$3.00
$4.00
$0.20
Adhered EPDM
15
$3.25
$4.25
$0.20
Adhered EPDM
20
$3.45
$4.45
$0.20
Adhered EPDM
30
$4.00
$5.00
$0.20
Mech. Attached EPDM
15
$3.35
$4.35
$0.20
Mech. Attached EPDM
20
$3.55
$4.55
$0.20
Mech. Attached Thermoplastic
15
$3.40
$4.40
$0.20
Mech. Attached Thermoplastic
20
$3.65
$4.65
$0.20
Mech. Attached Thermoplastic
30
$4.20
$5.20
$0.20
Modified Bitumen
15
$3.25
$4.25
$0.20
Modified Bitumen
20
$3.70
$4.70
$0.20
Modified Bitumen
30
$4.20
$5.20
$0.20
Built-Up Roofing
15
$3.60
$4.60
$0.20
Built-Up Roofing
20
$3.80
$4.80
$0.20
SYSTEM TYPE
Initial cost data derived from contractor survey. Replacement and maintenance cost data derived from Cash (1997).
Standard Life Cycle Cost Model
Step 3: Adjust Costs To Present Value
a. Determine Cost of Money
This Example: 5% Annual Interest Rate
b. Discount Replacement Cost to Present Value
Replace At:
PV Discount Rate:
15 Years
20 Years
30 Years
48%
38%
23%
c. Annuitize Annual Maintenance Cost to Present Value
Service Life:
Initial Annuity:
15 Years
20 Years
30 Years
11 X Annual Cost
13 X Annual Cost
16 X Annual Cost
Standard Life Cycle Cost Model
Step 4: Summarize Adjusted Cost Elements
REPLACEMENT COST
MAINTENANCE COST
LIFE CYCLE COST
(RC)
(MC)
(LCC)
SERVICE
INITIAL
LIFE
COST
Basic
Present Value
Adjusted Cost
Annual
Present Value
Adjusted Cost
SYSTEM TYPE
(SL)
(Years)
(IC)
($ / SF)
Cost
($ / SF)
Adjustment
(5% APR)
RCpv
($ / SF)
Maint. Cost
($/ SF)
Adjustment
(5% APR)
MCpv
($/ SF)
IC + RCpv + MCpv
($ / SF)
Ballasted EPDM
15
$2.85
$3.85
0.48
$1.85
$0.2000
11
$2.20
$6.90
Ballasted EPDM
20
$3.00
$4.00
0.38
$1.52
$0.2000
13
$2.60
$7.12
Adhered EPDM
15
$3.25
$4.25
0.48
$2.04
$0.2000
11
$2.20
$7.49
Adhered EPDM
20
$3.45
$4.45
0.38
$1.69
$0.2000
13
$2.60
$7.74
Adhered EPDM
30
$4.00
$5.00
0.23
$1.15
$0.2000
16
$3.20
$8.35
Mech. Attached EPDM
15
$3.35
$4.35
0.48
$2.09
$0.2000
11
$2.20
$7.64
Mech. Attached EPDM
20
$3.55
$4.55
0.38
$1.73
$0.2000
13
$2.60
$7.88
Mech. Attached T'Plastic
15
$3.40
$4.40
0.48
$2.11
$0.2000
11
$2.20
$7.71
Mech. Attached T'Plastic
20
$3.65
$4.65
0.38
$1.77
$0.2000
13
$2.60
$8.02
Mech. Attached T'Plastic
30
$4.20
$5.20
0.23
$1.20
$0.2000
16
$3.20
$8.60
Modified Bitumen
15
$3.25
$4.25
0.48
$2.04
$0.2000
11
$2.20
$7.49
Modified Bitumen
20
$3.70
$4.70
0.38
$1.79
$0.2000
13
$2.60
$8.09
Modified Bitumen
30
$4.20
$5.20
0.23
$1.20
$0.2000
16
$3.20
$8.60
Built-Up Roofing
15
$3.60
$4.60
0.48
$2.21
$0.2000
11
$2.20
$8.01
Built-Up Roofing
20
$3.80
$4.80
0.38
$1.82
$0.2000
13
$2.60
$8.22
Life Cycle Cost
Standard Life Cycle Cost Model
Life Cycle Cost at Present Value
(Dollars per Square Foot)
$8.09
$8.60
$7.49
15 Year
MB
20 Year
MB
30 Year
MB
Life Cycle Cost
Standard Life Cycle Cost Model
Life Cycle Cost at Present Value
(Dollars per Square Foot)
$8.35
$7.49
$7.74
15 Year
EPDM
20 Year
EPDM
30 Year
EPDM
(Adhered 45 mil)
(Adhered 60 mil)
(Adhered 90 mil)
Life Cycle Cost
Standard Life Cycle Cost Model
Life Cycle Cost at Present Value
(Dollars per Square Foot)
15 Year
System
20 Year
System
30 Year
System
… but which system is the best investment?
Life Cycle Cost
Equivalent Annual Uniform Cost Model
EUAC = A/P
LCC
(i,n)
Where:
EUAC = Equivalent Uniform Annual Cost
A/P = Annualized cash flow or payment ($ / sq. ft.)
LCC = Standard Life Cycle Cost
i = annual interest rate (%)
n = service life (years)
Life Cycle Cost
Equivalent Annual Uniform Cost Model
(EUAC)
$
…..
=
Standard
LCC
Payment
Year 1
Payment
Year 2
Payment
Year 3
Payment
Year N
In other words, what are my estimated annual
payments over the service life of this roof?
Life Cycle Cost
Equivalent Annual Uniform Cost Model
How to Calculate EUAC:
1. Calculate Standard Life Cycle Cost
2. Calculate the Annual “Payments” Required to Finance
a. Over The Service Life
b. At a Defined Interest Rate
EUAC = A/PLCC(i,n)
Life Cycle Cost
Equivalent Annual Uniform Cost Model
Equivalent Uniform Annual Cost
(Annual Dollars per Square Foot)
$0.72
15 Year
MB
$0.65
20 Year
MB
$0.56
30 Year
MB
Life Cycle Cost
Equivalent Uniform Annual Cost Model
Equivalent Uniform Annual Cost
(Annual Dollars per Square Foot)
$0.72
$0.62
$0.54
15 Year
EPDM
20 Year
EPDM
30 Year
EPDM
(Adhered 45 mil)
(Adhered 60 mil)
(Adhered 90 mil)
Life Cycle Cost
Equivalent Uniform Annual Cost
$.74
$.72
$.66
$.63
$.62
$.57
Ballasted
EPDM
15 Year System
$.65
Mech. Att.
EPDM
$.72
$.66
$.65
$.56
$.54
Adhered
EPDM
$.72
$.72
Mech. Att.
T'Plastic
20 Year System
$.56
Modified
Bitumen
Built-Up
Roofing
30 Year System
Life Cycle Cost
Conclusions
1. EUAC may be very useful in comparing the
value of roof systems with different service
lives.
2. Specification enhancements such as thicker
membranes and redundant details appear to
add tangible value.
3. Using the EUAC method, the life cycle costs of
different roofing systems appear to be very
close over the same time frames.
Life Cycle Cost
References
Boon, R. A. (2001).Better roofs are less expensive. Roofing Contractor, November.
Cash, C. G. (1997). The relative durability of low-slope roofing. Proceedings of the Fourth International
Symposium on Roofing Technology, 119-124. National Roofing Contractors Association: Rosemont,
IL.
Hoff, J. L. (2007) Equivalent uniform annual cost: A new approach to life cycle cost analysis. RCI
Interface, January, 2006.
Fuller, S. K., & Rushing, A. S. (2005). Energy price indices and discount factors for life-cycle cost
analysis, April 1, 2005 to March 31, 2006. Annual supplement to NIST Handbook 135 and NBS special
publication 709 (NISTIR 85-3273-20). Gaithersburg, MD: National Institute of Standards and
Technology.
2004-05 Low-Slope Roofing Materials Guide (2005). Rosemont, IL: National Roofing Contractors
Association.
Means Building Construction Cost Data (2005). Kingston, MA: R. S. Means.
Schneider, K. G., & Keenan, A. S. (1997). A documented historical performance of roofing assemblies in
the United States 1975-1996. Proceedings of the Fourth International Symposium on Roofing
Technology, 132-137. Rosemont, IL: National Roofing Contractors Association.
White paper on sustainability (2003). Building Design & Construction, November supplement.