CVEN 5020 BUILDING ENERGY AUDITS FALL 2007
University of Colorado at Boulder 1
Homework No. 1
Due September 6, 2007
Problem No. 1
A Company is considering the purchase of a new machine that will last 10 years and cost $ 100,000
the first year, decreasing by $ 10,000 each year. Determine how much money should the company
set aside before the first year to pay for this machine:
(a) If the interest rate is 4% per year, compounded annually.
(b) If the interest rate is 7% per year, compounded annually.
Problem No. 2
An electrical energy audit indicates that lighting consumes 12.5 106 kWh per year. By using more
efficient lighting fixtures, electrical energy savings of 8% can be achieved. The additional cost for
these energy efficient lighting fixtures is about $90,000 (due mostly to the need for new ballasts).
Assuming that the average energy charge is $ 0.06 per kWh, is the expenditure justified based on a
minimum rate of return (i.e., a discount rate) of 7.0 %. Assume a 10-year life cycle and use the
present worth, annual cost, and rate of return methods.
Problem No. 3
A residential building is heated with a 78% efficient gas-fired furnace (costing $1,600). The annual
heating load is estimated at 160 MMBtu. The cost of gas is $6.00/MMBtu. For the discount rate of
5% and 10-year cycle, determine:
a) the life cycle of the existing heating system.
b) if it is worth considering a 90% efficient gas-fired furnace that costs $2,800.
c) the variation of the life-cycle cost savings between the two systems [the existing system and
the proposed in (b)] versus the life of the system for life cycles ranging from 3 to 20 years.
Conclude.
Problem No. 4
Two chillers are proposed to cool an office space. Each chiller has a rated capacity of 300 tons and
is expected to operate 650 full-load equivalent hours per year. Chiller A has a standard efficiency
with a COP of 3.0 and costs $160,000 while chiller B is more efficient with a COP of 3.5 at a cost
of $210,0000. The electricity cost is estimated to be $0.08/kWh. For a lifetime of 20 years and a
discount rate of 5%,
(a) Estimate the payback time for using chiller B instead of chiller A.
(b) Calculate the life cycle costs for both chillers. Conclude.
(c) Estimate the rate of return for using B instead of chiller A.
(d) Determine the highest cost for chiller B at which chiller A is more competitive.
(e) Determine the cut-off electricity price at which both chillers A and B have the same life
cycle cost.
