Automate building life cycle cost calculations

Life cycle costing analysis (LCCA or LCC for short) is the most accurate way to increase your building’s project savings by comparing different design alternatives. As opposed to more commonly used ROI-based calculations, LCC is conducted based on long-term costs and savings, keeping in mind the fact that they are interconnected. The “life cycle” part means that LCC assesses all costs that occur over the building’s lifetime including construction, maintenance, operation, and end-of-life related costs.

The standards the LCC methodology refers to are ISO 15686–5, EN 16627, and, for UK, “Standardized method of life cycle costing for construction procurement” PD 156865:2008.

All material data include modifications for different regions related to labour costs and cost indexes. Datasets for material costs are structured to consider the cost of materials installed, and they include a labour cost component. The cost data is available for all main construction materials in the One Click LCA database. Its accuracy will depend on variances in type, specification, and method of construction. The database production process has used various cost databases, including the Neubau Baupreise Kompakt; Statistische Baupreise für Positionen mit Kurzttexten (BKI) (2017) and the Spon’s Architects’ and Builders’ Price Book (AECOM) (2017).

Labour costs are based on the International Labour Organization, Labour costs 2016. These costs are the total costs paid for labour by the party contracting labour including all applicable overheads.

Maintenance costs are based on regional labour costs and labour intensity of various maintenance operations. The production process has considered various sources, including Whitestone Facility Operations Cost Reference, International (2014) and Whitestone Facility Maintenance And Repair Cost Reference, International (2013) and include modifications for different regions related to labour costs, processes and cost indexes.

End-of-life costs are calculated based on the capital costs. The end-of-life is a percentage of capital costs, which is based on averaged projects.

Life cycle module	Analysis scope
A0-A5 Pre-construction and before use stage	Costs of purchase or rental costs (costs of the site); costs of building products; costs related to the transport between factory and site; project feasibility, planning, design, engineering and construction costs, incl. permissions, commissioning and handover; site clearance and landscaping (e.g. lawn, trees, and similar within the curtilage and other external works costs; subsidies and incentives (e.g. incomes related to renewable energy).
B1-B3 Operation and maintenance costs	Building-related facility management costs (e.g. regular cleaning, insurance, security, fire inspection, and similar costs); repair costs; ground maintenance; redecoration.
B4-B5 Replacement / refurbishment	Planned adaptation or refurbishment (incl. infrastructure, fitting out and commissioning, validation and handover); replacement of major systems and components (incl. associated design and project management).
B6 Operational energy use	Energy costs (incl. fuel and electricity for heating, cooling, power, domestic hot water, and lighting, as per the EU’s Energy Performance of Buildings Directive or EPBD).
B7 Operational water use	Water-related costs (e.g. rates, local charges, environmental taxes)
C1-C4 Deconstruction	Demolition costs; transport costs associated with deconstruction and disposal; fees & taxes (e.g. landfilling); waste processing costs

With One Click LCA Life Cycle Costing tool, you can calculate  ‘Life cycle cost, discounted’ and  ‘Life cycle cost, nominal’ (undiscounted, includes inflation). Both result categories take into account the same calculation parameters (the same set inflation rates), however, there is one major difference.

The ‘Life-cycle cost, discounted’ does not take into account inflation, and the value of the chosen currency is estimated to be the same over the entire set calculation period. The ‘Life cycle cost, nominal’ results include inflation, meaning that the set currency will not have the same value over the entire calculation period, which often results in a higher total.

There is, perhaps, not a disadvantage, but an issue that some people see in the LCC approach.

It has been noted that LCC focuses exclusively on cost reduction and has no regard for the environmental impact of a building. While it is true that eco-friendly materials can sometimes be more expensive, as technology keeps evolving, new, more ecological materials can prove to be cost-efficient solutions when adopting life cycle perspective. What is more cost-efficient: installing the conventional HVAC system and consuming a lot on energy over the course of decades or purchasing a contemporary HVAC system that enables net zero building design, producing as much or more energy to cover all expenditure? 

LCC should be implemented as early in the project as possible before any major decision has been made. The whole team should be involved in creating alternatives to capture the full potential of your project.

LCC should be regarded as an ongoing process and calculations should be repeated several times as the project transitions through construction stages. Our advice is to keep it up to date to ensure accuracy and high quality analysis.