Life-cycle cost analysis (LCCA) is a method for assessing the total cost of facility ownership. It takes into account all costs of acquiring, owning, and disposing of a building or building system. LCCA is especially useful when project alternatives that fulfill the same performance requirements, but differ with respect to initial costs and operating costs, have to be compared in order to select the one that maximizes net savings. For example, LCCA will help determine whether the incorporation of a high-performance HVAC or glazing system, which may increase initial cost but result in dramatically reduced operating and maintenance costs, is cost-effective or not. LCCA is not useful for budget allocation.
This course will provide you with an introduction to the principles of conducting a life-cycle cost analysis and suggestions on how to use economic analysis to evaluate design alternatives and how to consider non-monetary benefits as part of the LCCA process.
Upon completing this course, you will be able to:
- Understand how to apply the LCCA method to a project;
- Describe the different costs considered in an LCCA;
- Differentiate between LCCA and Value Engineering; and
- Identify non-monetary benefits that should be documented and portrayed in a life-cycle cost analysis.