Investigation into capital costs of HVAC systems

The initial capital outlay is one of the largest expenses of any HVAC system. Estimating these costs accurately is crucial to any HVAC economic analysis. In this article, initial cost models are investigated.A literature study reveals different methods for estimating initial costs. None of these are suitable for use during the conceptual design stage. They are either too simplified or require too detailed inputs. The use of “Pareto's Principle” to develop a suitable model is investigated in this paper.“Pareto's Principle” can be formulated to state that 20% of the equipment makes up 80% of the cost. This principle is tested by analysing some tender estimates. Although it appears to hold true, it is also evident that items like piping and ducting contribute significantly to installation costs. Accurate estimates can thus only be obtained by pricing each sub-system separately.Models are proposed for each subsystem of a typical HVAC system. All the proposed models are suitable for integration with QUICKcontrol and are applicable to a wide range of different HVAC systems.Estimating the costs of both the major capital equipment as well as the smaller sub-systems, is relatively simple. Air and water distribution systems are more problematic due to the number of variables. Without a fairly detailed design and costing model, no accurate cost predictions can be made.