Measuring cost-effectiveness.

CFR · 2024-01-01 · US · Title 10

(a) In accordance with this section, each Federal agency shall measure cost-effectiveness by combining cost data established under §§ 436.16 and 436.17 in the appropriate mode of analysis as described in § 436.19 through § 436.22. (b) Federal agencies performing LCC analysis on computers shall use either the Federal Buildings Life Cycle Costing (FBLCC) software provided by DOE or software consistent with this subpart. (c) Replacement of a building energy or water system with an energy or water conservation measure by retrofit to an existing Federal building or by substitution in the design for a new Federal building shall be deemed cost-effective if— (1) Life cycle costs, as described by § 436.19, are estimated to be lower; or (2) Net savings, as described by § 436.20, are estimated to be positive; or (3) The savings-to-investment ratio, as described by § 436.21, is estimated to be greater than one; or (4) The adjusted internal rate of return, as described by § 436.22, is estimated to be greater than the discount rate as set by DOE. (d) As a rough measure, each Federal agency may determine estimated simple payback time under § 436.23, which indicates whether a retrofit is likely to be cost effective under one of the four calculation methods referenced in (e) Mutually exclusive alternatives for a given building energy or water system, considered in determining such matters as the optimal size of a solar energy system, the optimal thickness of insulation, or the best choice of

official document · source cfr-2024 · id 10:§ 436.18