A Case Study on Sustainable Technologies in Residential Buildings from a Life Cycle Cost Analysis (LCC) Perspective

Abstract

The article mostly addresses the application of sustainable technologies in residential construction through life cycle cost analysis (LCC) using the net present value (NPV) calculation method. The authors rely on data obtained through their own research and information received from the market environment. The article outputs are in the form of conclusions based on a case study on a specific building (apartment building), elaborated in several versions with respect to the technologies used. In total, there are seven alternative versions divided into two groups, where a so-called reference technology representing a traditional (standard) technical solution is present in each group so that a relevant comparison can be made. The first group includes technologies related to heating and hot water, while the second group focuses on the application of recycled water (so-called grey water). The outputs obtained provide an interesting and fact-based view of sustainable technologies within the life cycle of a building drawing from currently available information sources. At the same time, the presented analysis has incorporated price predictions for key commodities, i.e., electricity, water, gas. The article’s specific conclusions indicate that the technologies utilizing renewable energy sources (RES) are typically less economically advantageous (in the absence of subsidy sources) compared to conventional (traditional) solutions, despite the significant savings in operating costs. The LCC indicator revealed a cost value per square meter of gross floor area (GFA) for a residential building ranging from EUR 43 to 68, contingent on the specific option under consideration. This cost value was determined over a 20-year follow-up period and a real discount rate of 4%.

1. Introduction

The article addresses the currently frequently iterated issue of sustainable construction. The research conducted focuses on sustainability in residential development during the design phase of a building. On the whole, the European Union (EU) and the Czech Republic (CR) obviously tackle individual objectives of sustainable development not only in the construction sector or the industry in the form of legislative support and resulting requirements. In general, the legislation is currently undergoing considerable changes regarding the energy performance of buildings, which is the main criterion for assessing the sustainability of buildings. This issue is also closely related to renewable resources and water management. In this context, there are numerous national subsidy programmes (not only in the Czech Republic but also throughout the EU) applicable to housing development. As neither the current European nor Czech legislation assesses buildings in terms of sustainability in a complex way based on all key pillars (i.e., environmental, social and economic views), the literature review defines the certification tools that enable this assessment and are increasingly in demand in the housing construction market. The outputs of the article are linked to a case study carried out through life cycle cost (LCC) analysis on previously identified technologies using renewable energy sources (RES) for heating, hot water and water recycling with a potential to contribute to the sustainability of residential development. The listed values represent final values. If necessary, the authors of the article are happy to provide their sub-calculations and collected data for scientific purposes.

2. Literature Review

The literature search focused on sustainability including its subtopics in relation to the construction industry and life cycle cost analysis. Sustainability is presently gaining awareness across a large number of disciplines and is becoming increasingly discussed. The technical standard ČSN ISO 15686-5:2018 [1] defines sustainability as a state of the global system, including environmental, social and economic aspects, in which the needs of the present are met without compromising the ability of future generations to meet their own needs. As the definition suggests, it is the synergy of three major aspects that are mutually dependent. These aspects are referred to as the pillars of sustainability—environmental, social and economic [1].

2.1. Sustainability in Construction

Society-wide concerns about the overexploitation of non-renewable resources, the loss of fertile soil or energy dependence can also be largely applied to the construction sector, which accounts for more than 40% of primary energy consumption and produces 24% of global greenhouse gas emissions [2]. As already outlined, sustainability is a very broad concept which can be applied in many sectors and at many different scales. The sustainability rating is also essential for assessing alternative solutions in the construction sector, for example, in the choice of materials and energy sources within buildings [3]. Nevertheless, ensuring a “reasonable” degree and a specific sustainability rating of a building has not yet been fully covered by legislation. There are, however, certification tools (see Section 2.4) that demonstrate the quality of a building in terms of sustainable aspects through sustainability certificates [4]. Currently, the demand for certification is growing among investors and developers, as certified buildings subsequently become more attractive on the market. Compliance with the requirements of these tools leads, among other things, to reduced costs in the operational phase of a building. The sustainability of buildings is assessed based on numerous established criteria. Historically, it can be said that energy efficiency was the first criterion to come to the fore in terms of building sustainability. It is still one of the most important parameters for earning successful certification, but unlike overall sustainability, its importance is already well established in the legislation in force and its requirements are continually being tightened [5]. The European Union is also engaged in this issue to some extent. It defines European legislation, which each Member State must subsequently implement at a national level through national action plans and related acts and decrees. In 2018, the European Union issued the third edition of the European Directive [6], which addresses this issue. The Directive commits to creating a sustainable, competitive, secure and decarbonised energy system by 2050. It sets out short-term (by 2030), medium-term (by 2040) and long-term (by 2050) targets through which it aims to achieve this system. The main objectives are to reduce greenhouse gas emissions (by 40% below 1990 levels by 2030), increase the percentage of renewable energy sources used and increase energy efficiency (reduce energy wastage). These objectives have been set based on fact-finding analyses, some of the results of which are incorporated in the Directive. It states, for example, that building stock accounts for around 36% of all CO₂ emissions in the European Union. It also reports that almost 50% of the Union’s final energy consumption is used for heating and cooling, of which 80% is used in buildings. Finally, it is worth noting that by increasing energy savings by 1%, gas imports are reduced by 2.6%, thus positively strengthening energy independence [7].

2.2. Renewable Energy Sources

Renewable energy sources are one of the important components of a sustainable energy future. According to the national legislation of the Czech Republic, they are clearly defined as “renewable non-fossil natural energy sources, which are wind energy, solar energy, geothermal energy, water energy, soil energy, air energy, biomass energy, landfill gas energy, sewage sludge gas energy and biogas energy” [8]. Renewable energy sources offer several benefits. Among their main advantages are the ability to reduce greenhouse gas emissions or to mitigate energy dependence on imports from other countries. In several European countries, the use of renewables has been or is being gradually expanded through supportive national legislation [9]. Key in this respect is Directive 2009/28/EC of the European Parliament and of the Council on the promotion of the use of energy from renewable sources [10], its revisions and the Energy Union Governance Regulation, which sets requirements for the share of RES in gross final energy consumption (the share of RES in gross final energy consumption is equal to the percentage of gross final consumption from RES and gross final consumption from all sources). An overall EU target for the share of energy from RES of 20% by 2020 has been set. The target for the Czech Republic was recalculated to 13%. This target was already achieved in 2014. By 2030, the overall target is increased to 32%, which means 20.8% for the Czech Republic [11]. The importance of this objective must be accepted, as the potential of renewable energy sources is indeed considerable. On the other hand, the introduction of a decentralised system in terms of electricity generation, for example, is very demanding in terms of legislation and brings many pitfalls. A crucial point in this issue (implementation of the use of renewable sources) is the incorporation of the additional obligations arising from Directive 2009/28/EC into individual national legislative systems, supported by the active approach of private companies.

2.3. Green Building Materials and Life Cycle Inventory

In general, green building materials are generally intended to be innovative products that are as environmentally friendly as possible. There are several approaches to defining and identifying green building materials according to their environmental impact. The authors of the article chose the life cycle inventory (LCI) method in relation to their topic, also adding the necessary context about the level of availability of relevant data for the needs of different types of calculations. In particular, the data focus on the environmental impacts of products over their entire life cycle. These data necessary for the determination of LCI can be obtained from existing databases. Well-known databases include, for example, the ELCD (European reference life cycle database) or the international Ecoinvent database or the German Ökobaudat database specialising in building materials and other products in the construction industry [12]. For some products and materials, documents called EPD (Environmental Product Declarations) are prepared. These documents also provide information on the environmental impacts of the product over its entire life cycle. However, the EPD document does not demonstrate the significance of the product in terms of its environmental impacts but provides information on the environmental impacts of the product as determined by a life cycle assessment (LCA). This means that a product with EPD may not be “more” environmentally friendly in any way than another product without it. This type of document can be an important aid in analysing the environmental impact of the whole building and the possibility of selecting suitable green building materials [13].

2.4. Certification Methods

A brief introductory overview of the key certification tools whose certification will assess a building with respect to its sustainability can be found at the very beginning of the article for a clearer orientation in the respective issues and thus for better understanding of the authors of the gained outputs. The main objective of these methods for sustainability assessment is to reduce the environmental impacts within the life cycle of a building. However, the reduction of these impacts must not affect the end user’s quality of life. Therefore, this objective cannot be considered as the only one, as this would also contradict the basic definition of sustainability. For that reason, a multi-criteria assessment of individual categories affecting all the sustainability pillars of a building must be used. The assessment method of these issues is to evaluate the building based on pre-established categories by awarding credits to subcategories that are assigned different weights [14]. There is a relatively large number of certification tools on the world market, BREEAM and LEED being the most frequently cited tools in the Czech Republic.

The first certification tool appeared in Great Britain in 1990 being abbreviated as BREEAM (Building Research Establishment’s Environmental Assessment Method) or the method of assessing the impacts of a building on the environment. It has undergone many revisions as the construction industry and building requirements have evolved and is currently one of the most widely used and well-known certification tools in the world. This tool can be applied to larger urban developments and infrastructure as well as to new or existing buildings and renovations. The method assesses a new building by means of 10 categories (Management, Health and Wellbeing, Transport, Materials, Innovation, Energy, etc.), which include additional subcategories. Their number may vary slightly depending on the function of the respective building. The percentage ratio of the gained and the maximum credits is multiplied by the weighting factor of each category. The Energy category has the highest weighting, followed by Health and Wellbeing and Management. By summing these percentage scores, the total score of a building is evaluated and then compared to the BREEAM benchmark rating. The resulting building certification has 5 achievable rating levels—outstanding, excellent, very good, good and pass [15].

The LEED (Leadership in Energy and Environmental Design) certification tool was founded by the US Green Building Council (USGBC) in the USA in 1998. This tool can also be applied in the European environment; however, some mandatory requirements are closely tied to US standards, and although they are easy to meet as European legislation is comparatively stringent, they need to be considered and included in the building design. Failure to meet them can lead to strict exclusion from certification. The current version of this tool is very comprehensive and can be applied to a wide range of building projects at different stages of their life cycle. For example, the interiors of commercial buildings or the operation and maintenance of existing buildings can be assessed through it [16]. The assessment of a new building is based on a similar principle to BREEAM. LEED defines nine categories that are scored by points. In each category, there is a maximum number of points awarded. The Energy and Atmosphere category has by far the highest number of points to gain. This certification boasts one of the highest quality building energy performance ratings in dynamic computer modelling. For each category, there are also rigorous requirements that must be met. The final certification level is determined by the number of points achieved. The maximum possible score is 100 points and additional extra points can be gained for innovative solutions or consideration of local priorities. This certification tool defines 4 levels of certification—“Platinum, Gold, Silver and Certified” [17].

Within academic articles, the BREEAM and LEED methods are often associated with efforts to create easier and more accurate sustainability rating systems using sustainability indicators and their respective weights with respect to new sustainable technologies [18]. Other relevant publications focus on how to adapt this international method to local needs, e.g., on the African continent, where many parameters are irrelevant due to the local climate [19]. An important perspective on the issue is also provided by a group of articles dealing with the practical application of the methods in specific case studies and their economic impacts on improving the final evaluation. A well-grounded article with exactly calculated financial values within the LEED method mentions a significant cost jump when using or not using this method [20].

2.5. Life Cycle Cost Analysis of a Building

The life cycle cost of a building is methodically designed for systematic economic evaluation within a specified scope by the ČSN ISO 15686-5 Standard, 2018 [1]. This method is mainly used to decide on the optimal building version, which often represents a time-consuming and complex process. This is mainly due to the complexity of the process of obtaining the building permit and the complicated technological procedures during construction [21].

There are numerous publications addressing life cycle costs. The technique itself is often treated as an element of sustainable development, where discussions focus on what prevents it from being applied in a particular country/project. For example, according to a survey conducted in Australia, the respondents claimed investors and architects/designers as the main culprits hindering the LCC implementation by placing more emphasis on initial costs and design over the strategic value of the assets in the long term [22]. In another article, the authors discuss the absence of LCC use in public procurement, citing the missing legislation and insufficient Best Practices as the biggest obstacle [23]. However, the publications focusing also on the use of sustainable technologies as such in LCC calculations are scarce. One interesting study on dozens of Chinese cities has analysed the issue of how the digital economy affects LCC performance, providing empirical support for harnessing the digital economy potential to support the development of low-carbon cities. The resulting models produced decidedly positive conclusions for the use of selected sustainable technologies [24]. A real-life case of the calculation itself presented in a case study is the environmental and economic evaluation of an energy renovation project in a student house building in Athens, Greece [25]. This study uses a comprehensive approach combining life cycle assessment and life cycle costing methodologies. The study accentuates the importance of LCA and LCC analyses in assessing the feasibility of renovation projects and the evidence-based decision-making process, clearly highlighting the application of the above-mentioned methods in the design of a building.

2.6. Research Contribution

Based on the literature review, it is evident that determining the degree of sustainability is a very complex process in which numerous criteria need to be considered. However, by meeting the sustainability conditions, further progress towards meeting the complex goals of sustainable development is guaranteed. Other conclusions from the literature review are summarised in bullet points:

• The topic of sustainability is gradually gaining momentum, both in terms of finding “green solutions” to increase environmental friendliness and cost savings, especially in the operational phase of the life cycle. A separate issue is the recent intensification of legislative requirements. A significant drawback is that most sustainable or innovative materials and RES technologies lack the necessary database related to cost estimation issues, which brings a certain degree of risk and uncertainty for potential investors.
• From a global perspective, studies addressing the issue of LCC in residential construction are relatively numerous. Unfortunately, studies focusing on sustainable technologies are not as numerous. This fact regarding the lack of relevant publications and the uniqueness of each project prevents direct comparisons between the results of different scientific conclusions. However, the currently visible interest in sustainability in society at large will certainly lead to an early increase in the number of similar studies.
• The identified factors creating the uniqueness of the project described above are different price levels, different processing times, lengths of the period under review, technical and technological design of the construction, discount rate, etc.
• From the authors’ point of view, the combination of LCA and LCC methods is professionally interesting, where each of these methods can select a different option of the solution as the most advantageous one. This combination may represent a future direction for project evaluation with the search for an “ideal way” that considers the advantages of both methods.

According to the literature review, the authors bring novelty to the scientific environment, especially in the selection of sustainable technologies in relation to apartment buildings, including the economic expression of the impacts of their application in the selected life cycle period. The paper provides an up-to-date realistic picture of the state of the market in the field of sustainable construction.

3. Materials and Methods

The procedure used to obtain the article outputs is linked to the LCC analysis applied in the case study in the following sequence (a process diagram describing the research procedure is expressed in the Figure 1 below):

• Selection of a reference apartment building.
• Identification of sustainable technologies and specification of alternative technological solutions.
• Calculation and economic evaluation of individual alternative versions.

The LCC analysis in terms of the requirements for the resources for its preparation is very demanding. Due to the lack of sources, it was necessary to analyse the current market. In the first phase, the analysis of apartment buildings where the above-mentioned technologies have already been applied was carried out. Key cooperation was established with several developer companies, who provided data for the LCC analysis from their long-term monitoring of the buildings where the selected technologies had been used. In the following phases, the contracting companies involved in the installation, operation, servicing or maintenance of the designed technologies were addressed. These contractors were asked for quotations or consulted on the design of specific alternative versions of the case study. Based on the described experience, the authors divide, for better clarity and transferability to other case studies, the data needed for the LCC analysis into three basic groups (usually different “owners” of this information):

• Cost data for each phase of the construction life cycle.
• Data for converting future costs to the present value—determining discount rates, inflation rates, etc.
• Other information related to the construction project under consideration—capacity and technical parameters, purpose and method of use, quality of individual components, etc.

3.1. Apartment Building

The residential building to which the above procedure is applied is a five-storey apartment building with four aboveground floors and one underground storey. This building contains 24 residential units accessed by two staircase cores. The composition of the apartments varies from one bedroom with kitchenette to four bedrooms with kitchenette units. On the first underground storey, there are technical facilities, cellars for the apartments and 33 parking spaces. Digital model of the selected apartment building composition in the Figure 2 (below).

The basic parameters of the reference building are summarised in the

Table 1. Basic parameters of the apartment building.

Parameter [Unit]	Value	Parameter [Unit]	Value
Gross floor area (GFA) [m2]	4906	Required capacity for DHW heating at peak times [kW]	25
Floor area of residential units (FA) [m2]	1743	Annual water demand [m3/year]	2738
Built-up space (BS) [m3]	15,208	Annual DHW demand [m3/year]	1095
Number of apartment users [persons]	77	Total energy supplied [kWh/year]	227,879
Heat loss of the building (required heating capacity) [kW]	120	Estimated construction costs [EUR]	4,072,759

below.

The construction cost estimate for the construction of the apartment building as a whole is taken as a constant and is considered in the calculation of the LCC analysis.

3.2. Sustainable Technologies

The identification of sustainable technologies and the specification of alternative technological versions was based on market research conducted with a focus on residential buildings. The technologies are divided into two groups for the purposes of the case study:

• Technologies used as a heat source for heating or hot water.
• Technologies related to water management in the context of water recycling and reuse.

The choice of a source for heating and hot water in a residential building depends on many factors. These are technical, economic and environmental factors. From the sustainability perspective, it is very important to consider the technology over the whole life cycle of the building, even if the investor is not the operator as well. Currently, residential buildings are most often heated with natural gas or use central heating [26]. However, there are many alternative ways to heat a residential building or provide hot water. For example, there are several heat sources available that use renewable sources. A fundamental decision in the choice of technology is the choice of the energy carrier. It should be chosen primarily based on its availability in the area where the building is designed. Finance and the environmental impact are also important criteria in the choice of the energy carrier. The main sources of energy are electricity, gas and solid fuels such as coal or wood. Their use is regulated with respect to the environment. The costs associated with these energies and fuels are related to the choice of the supplier, the quantity and the form in which they are provided. Another option is the use of renewable energy sources from the air, the environment, the sun or water, which have the great advantage of being independent of fuel and energy suppliers. In the Figure 3 below, technologies with their own energy carriers are identified for the case study evaluation.

Water scarcity is one of the issues arising from climate change and it is therefore proposed to include this issue in the sustainability of residential buildings. There are several products or technologies on the market that help users to save or recycle and reuse water. There are systems that can use grey or rainwater for flushing. Grey water refers to water that is originally obtained from the mains water supply. It is wastewater obtained from kitchens or bathrooms, containing neither faeces nor urine. Rainwater is generally rainwater that is collected from the roofs of buildings. Water systems are able to store this water in tanks, purify it and then transport it to homes to be used for flushing toilets. The secondary water is then discharged to the sewer as standard. A fundamental criterion in the design of these systems is to ensure that the quality of the treated water is sufficient.

3.3. Versions of Technological Solutions

For the calculation of the LCC analysis, the authors of the article chose the so-called reference versions, which represent the most frequently used technologies in residential construction, i.e., gas heating and gas hot water heating and flushing toilets from the water mains.

Table 2. Alternative versions of technological solutions.

Heating and Hot Water Heating	Energy Carrier	Heat Source
Version 1—reference	gas	2× gas condensing boiler
Version 2	gas, solar energy	2× gas condensing boiler, 16× flat plate solar collector
Version 3	ambient energy, grid power	1× heat pump, 1× electric boiler
Version 4	air energy, grid power	2× heat pump, 1× electric boiler
Version 5	biomass	2× pellet boiler
Toilet flushing	Medium source
Version 6—reference	water mains
Version 7	greywater

below summarises the different alternative versions examined in the two groups for which case studies will be prepared.

The use of recycled rainwater represents a very interesting option to increase sustainability in residential development. However, it requires the installation of a separate distribution system and strict separation from drinking water. Accumulated rainwater is in many cases better used for watering green areas. The conclusions of the case study will indicate how suitable this technology is for the selected project.

3.4. Life Cycle Cost

The life cycle cost analysis is developed to calculate the economic impacts over a selected monitoring period on a residential building based on the technologies alternatively used. For each version, the investment costs of the technology and the construction works related to its acquisition are specified. In addition, the operating costs are determined, related to energy, water, the system’s operation and maintenance and renewal costs of the technology. The monitoring period is set at 20 years, considering the service life of the assessed technologies, which is generally no more than 20 years without major reinvestment.

The traditional net present value (NPV) method is applied for the actual calculation in the LCC analysis. It is characterised as one of the most appropriate and most widely used financial indicators. It expresses the present value of future costs and includes the lifetime of the construction project, according to the formula:

$$NPV={\sum }_{t=0}^T{\displaystyle \frac{C_t}{{(1+r)}^t}}$$

(1)

where:

Ct—annual cost in individual years of the project life cycle in EUR after deducting positive cash flows.

r—discount rate (p.a.).

t—year of evaluation taking values from 0 to T.

T—length of the evaluated period in years.

The cost values are composed of:

• investments—these are one-off calculated costs associated with the acquisition of selected technologies and potential additional construction modifications which are not included in the construction cost estimate from Table 1;
• operation—these are the annual calculated costs of energy (both generated and supplied), including predicted price increases (

  Table 3. Increase in energy, water and sewerage prices.

  Medium	Expected Annual Increase [%] 1
  Electrical energy	4.57
  Natural gas	1.73
  Water and sewerage	5.25

  ¹ Source: Resource Adequacy Assessment of the Czech Power System until 2040 (MAF CZ) by Ministry of Industry and Trade [27].

  ) and management of the apartment building;
• maintenance and renewal—these are the annual costs associated with servicing and maintenance (expert estimate of 1.5% per year of investments), insurance (estimate of 0.5% per year of investments), revisions and renewal (both calculated per specific technologies).

The authors did not consider the application of other methods for determining eco-nomic profitability, e.g., Return on Investment (ROI), in this case study. NPV has a strong link to the Czech environment, where it is a key method for determining the LCC value over time and has (NPV) sufficient predictive power.

The calculation of the net present value presumes a discount rate of 4%. This is a real discount rate that does not consider the inflation rate. The cost analysis is therefore made in real prices not considering inflation. The operating costs are significantly affected by the quantity and prices of the energy or media that the selected technologies require for their operation. In this context, an analysis of the price development of the needed energy or medium is carried out for each version, which is used to determine the annual percentage increase. The price increases are affected, for example, by demand and the required change in the energy mix for power generation. This subsequently increases the year-over-year energy costs. The specification of the energy or medium increment is always provided for the version under consideration.

4. Result Details

In the following subsections, the LCC analysis is calculated for individual alternative versions of selected technological solutions (not including the construction costs estimate for the construction of the apartment building as such) in the order listed in Table 2.

4.1. Version 1—Reference

The reference version of the LCC analysis for the first group of technologies uses a gas condensing boiler. It is one of the two most used heat sources in residential buildings (the other one being district heating). In this version, a central boiler room with two boilers in series with a total capacity of 140 kW is designed. The total cost of Version 1 is summarised in

Table 4. Total costs of Version 1.

Total Costs Over the Monitoring Period [EUR]		NPV (Real Discount Rate of 4%) [EUR]
Investment costs	29,152	Total operating costs NPV	171,096
Total energy costs	206,736
Total service costs	45,056	Total operating costs with rising energy prices NPV	195,982
Total operating costs	251,792
Total energy costs with rising energy prices	248,844	Total maintenance and renewal costs NPV	10,362
Total operating costs with rising energy prices	293,900
Total maintenance and renewal costs	15,192

.

Condensing boilers are described as one of the most efficient heat sources in terms of their efficiency. Usually, the efficiency in relation to the calorific value is quoted as having a higher value than the efficiency in relation to the heat of combustion. The calorific value of natural gas indicates the amount of heat released when 1 m³ of natural gas is burned, presuming that the water vapour contained in the flue gas remains in a gaseous state at the end of the process. Conversely, the variable referred to as the heat of combustion when determining the amount of heat, presumes that the water vapour in the flue gas is transformed into a liquid state [28]. Nevertheless, it is this efficiency that is the determining factor in defining the operating costs relative to the energy requirements. In technical data sheets, sometimes only the coefficient of the heat of combustion of gas may be given, by which the efficiency in relation to the calorific value must then be adjusted. The value of these efficiencies is affected by the temperature of the heating water used to heat the house. If low temperature heating is used, the values of these efficiencies are higher.

4.2. Version 2

The second version of the LCC analysis also uses gas condensing boilers supplemented by solar thermal panels for preheating hot water. The design of the area and the number of these panels is affected by the data obtained from similar buildings and the available roof area to accommodate them. The cost of this technology is calculated in accordance with the market data obtained. The design of the gas condensing boilers is the same as in the previous version, as the total loss of the building must be completely covered in the winter months when the solar thermal panels are not as efficient.

The system used is based on 16 flat plate solar collectors with a total surface area of 40.48 m². The collectors are placed on the roof with a 35-degree slope and south orientation. The selected parameters related to the collector (to complete the context) are: linear heat loss coefficient (a1) = 4.072 W/m²K, quadratic heat loss coefficient (a2) = 0.008 W/m²K and optical efficiency η0 = 0.741. The investment cost for the installation of this system alone represents almost 50% of the total investment cost. The total cost of Version 2 is summarised in

Table 5. Total costs of Version 2.

Total Costs Over the Monitoring Period [EUR]		NPV (Real Discount Rate of 4%) [EUR]
Investment costs	69,546	Total operating costs NPV	155,904
Total energy costs	184,378
Total service costs	45,056	Total operating costs with rising energy prices NPV	178,098
Total operating costs	229,434
Total energy costs with rising energy prices	221,933	Total maintenance and renewal costs NPV	20,589
Total operating costs with rising energy prices	266,989
Total maintenance and renewal costs	30,217

.

Based on the analysis of real consumption measurements of the cooperating companies’ residential buildings, it has been shown that by using the same effective area of collectors in proportion to the total heat consumption for hot water heating, such heat gains are achieved that cover approximately 35% of the heat demand for hot water heating. This fact is considered when estimating the operating costs.

4.3. Version 3

For Version 3, a heat pump using ambient energy is chosen as the heat source. The capacity of the ground-to-water heat pump is designed to be 65% of the required capacity of the apartment building, which covers 90% of heat losses. The rest is covered by a bivalent source. The mains-fed electric boiler with a capacity of 45 kW was chosen for this purpose. It is only expected to be activated on the coldest days of the year when the full required capacity needs to be achieved. This is the most efficient way of designing this type of heat pump consulted with the market companies that have long been involved in the heat pump industry. The aim of the authors was to achieve an optimal design with respect to reducing the investment costs associated with heat pump technologies. The design also benefits from the choice of low temperature heating, which allows a higher seasonal heating factor to be achieved. The total cost of Version 3 is summarised in

Table 6. Total costs of Version 3.

Total Costs Over the Monitoring Period [EUR]		NPV (Real Discount Rate of 4%) [EUR]
Investment costs	114,188	Total operating costs NPV	107,825
Total energy costs	113,623
Total service costs	45,056	Total operating costs with rising energy prices NPV	149,350
Total operating costs	158,679
Total energy costs with rising energy prices	187,637	Total maintenance and renewal costs NPV	18,011
Total operating costs with rising energy prices	232,693
Total maintenance and renewal costs	26,627

.

For the transfer of energy from the ground, ground boreholes are chosen, which can also be placed under the building itself. Their drilling entails construction costs, which are not insignificant in the whole valuation structure of investment costs. The cost of the boreholes is determined by the price per kW of the selected heat pump capacity. The advantage is that ground boreholes can be considered maintenance-free after commissioning.

4.4. Version 4

Version 4 also uses a heat pump as the heat source, except that the energy carrier is the air. This type of pump is usually placed on the roof. These pumps can cause quite a lot of noise through the movement of the fans and so they usually need to be supplemented with appropriate noise reduction measures. The chosen pump type meets the noise requirements by its properties and does not need an additional noise barrier. Like the ground-to-water heat pump, this pump is designed for 65% of the required capacity, as each kW of capacity significantly increases the investment cost. Thus, two series-connected sources with a total capacity of 80 kW are chosen. The remainder is also covered by an electric boiler that draws power from the grid. The total cost of Version 4 is summarised in

Table 7. Total costs of Version 4.

Total Costs Over the Monitoring Period [EUR]		NPV (Real Discount Rate of 4%) [EUR]
Investment costs	102,504	Total operating costs NPV	134,498
Total energy costs	152,876
Total service costs	45,056	Total operating costs with rising energy prices NPV	192,522
Total operating costs	197,932
Total energy costs with rising energy prices	252,460	Total maintenance and renewal costs NPV	39,296
Total operating costs with rising energy prices	297,516
Total maintenance and renewal costs	57,914

.

The sound power level requirements increase the investment costs of the source itself, but, on the other hand, the overall cost structure is freed from the costs associated with noise protection measures in the form of covers or louvres. The energy costs are higher compared to Version 3 as the seasonal heating factor of the air-to-water heat pump is lower. The heat pump thus covers 83% of the total heat losses. The remaining 17% is covered by the electric boiler.

4.5. Version 5

The final version in the heating and hot water group is the use of biomass. Two pellet boilers in series with buffer tanks are installed. This design requires a pellet storage area, which must be kept dry to prevent fuel degradation. The fuel is stored in fabric containers and transported to the boilers by screw conveyors. The total cost of Version 5 is summarised in

Table 8. Total costs of Version 5.

Total Costs Over the Monitoring Period [EUR]		NPV (Real Discount Rate of 4%) [EUR]
Investment costs	36,614	Total operating costs NPV	160,826
Total energy costs	191,621
Total service costs	45,056	Total operating costs with rising energy prices NPV	160,826
Total operating costs	236,677
Total energy costs with rising energy prices	191,621	Total maintenance and renewal costs NPV	15,899
Total operating costs with rising energy prices	236,677
Total maintenance and renewal costs	23,284

.

The total cost calculation includes the prediction of pellet prices. The statistics from the Ministry of Industry and Trade of 2019 show that the price of pellets is comparable to Germany and Austria, where their use is more widespread. The price development in these countries is balanced in the long term and no major fluctuations have been recorded [29]. One of the pellet suppliers has published the development of pellet prices in the Czech Republic between 2006–2016 on their website, from which it is evident that the price per tonne is currently almost the same as in previous years [30]. The disadvantage of this version are the requirements for the pellet store installation. If the textile containers do not fit in the utility room, two adjacent cellars will have to be closed. This would put this version at a significant disadvantage.

4.6. Version 6

Version 6 deals with water management within the apartment building. It is the reference version in the second group of technologies simulating a standard situation where the overall water demand is covered by drinking water from the public mains. The total cost of Version 6 is summarised in

Table 9. Total costs of Version 6.

Total Costs Over the Monitoring Period [EUR]		NPV (Real Discount Rate of 4%) [EUR]
Total operating costs	206,095	Total operating costs NPV	140,045
Total operating costs with rising water prices	368,188	Total operating costs with rising water prices NPV	234,162

.

The investment costs associated with this technology are set to zero for the LCC analysis, as the installation of a drinking water supply system is also necessary for Version 7. Water demand is calculated based on the number of persons using the respective building. The price of water and sewerage is set according to the relevant price list [31]. The operation, maintenance and renewal costs are also zero, as they would be identical to those in Version 7.

4.7. Version 7

The final version of the LCC analysis uses the accumulation of grey water, its treatment and subsequent use for toilet flushing. The size of the storage tanks is chosen with respect to the daily water demand for flushing. The design and costing are based on the data obtained from the market companies already incorporating this technology in their buildings. The total cost of Version 7 is summarised in

Table 10. Total costs of Version 7.

Total Costs Over the Monitoring Period [EUR]		NPV (Real Discount Rate of 4%) [EUR]
Investment costs	41,910	Total operating costs NPV	108,569
Total water and sewerage costs	154,580
Total energy costs	394
Total service costs	4800	Total operating costs with rising energy prices NPV	179,311
Total operating costs	159,775
Total water and sewerage costs with rising water prices	276,158
Total energy costs with rising energy prices	651	Total maintenance and renewal costs NPV	7594
Total operating costs with rising energy prices	281,609
Total maintenance and renewal costs	11,182

.

The investment costs of the grey water technology are mostly made up of the installation costs of separate sewerage and water distribution systems. The sewer lines must be separated into internal sewers leading from toilets, washing machines and kitchen sinks directly to the sewer connection and internal sewers leading from showers and washbasins to the grey water storage tank. The grey water storage tanks are then connected to the sewage sewer and directly to the sewer line. In the event of a grey water shortage, the supply of drinking water to the tanks is provided. The water distribution lines are separated into drinking and recycled water lines. The recycled water distribution systems are supplemented with water meters. For a relevant comparison with Version 6, the difference in the cost of the grey water technology piping compared to the standard piping in Version 6 has been included in the investment cost calculation. The costs related to the technology are set based on the data on the reference building obtained from the market. They are adjusted by a price index relative to current prices and considering half of the grey water flow and storage requirements. The disadvantage of this version is the space needed for the installation of the technology.

5. Discussion About LCC Assessment

The key parameters against which the technologies are evaluated are specified for the calculated versions of heating, hot water and water recycling systems. The essential parameter is the total life cycle cost of the building over the monitoring period, this cost is subsequently expressed in EUR/m² of the floor area of the building, EUR/m² of the floor area of the apartment units and EUR/m³ of the built-up space of the building. The evaluation of the LCC analysis including its relevant indicators is presented in the table below (

Table 11. Life cycle cost with energy price rise prediction.

LCC Type	Version 1	Version 2	Version 3	Version 4	Version 5
LCC with energy price rise (without discounting) [EUR]	338,245	366,751	374,292	457,933	296,575
NPV with energy price rise [EUR]	235,496	268,219	283,149	334,322	213,339
NPV indicator 1 [EUR/m2 of GFA]	48	55	58	68	43
NPV indicator 2 [EUR/m2 of apartment FA]	135	154	162	192	122
NPV indicator 3 [EUR/m3 of built-up space]	15	18	19	22	14

).

The following graphs (Figure 4) show that Versions 1 and 5 require by far the lowest investment costs. In contrast, Versions 3 and 4 using heat pumps represent an investment almost four times higher. These costs are subsequently offset by the operating costs, where heat pumps are on the contrary in the first place. This fact is negatively affected by the consideration of rising electricity prices, which increases these costs. However, despite the prediction of energy price increases, the worst performing option is Version 1, whose total heat losses are covered by natural gas. Maintenance and renewal costs are largely affected by the acquisition cost of the technology itself, where reinvestment in the most loaded component is presumed. This significantly disadvantages Version 4, which incorporates a very quiet heat pump that is very expensive compared to the other sources.

The reference version has notably higher operating costs compared to the remaining versions that use renewable sources. These account for up to 83% of the total life cycle costs. Despite this, it is the cheapest version in the monitoring period without predicted energy price increases, mainly because of its significantly lower investment costs. Similarly high life cycle costs are identified for Version 5, whose energy carrier is biomass. This version is favoured if the energy price rise prediction is included because no price increases are expected for pellets. This puts this version in the first position when assessing energy price increases. Unfortunately, it is the only version using renewable energy sources that can compete with the fossil fuel costs without state subsidies. The cost of natural gas can be reduced by installing solar thermal collectors. The high acquisition costs of this technology, however, make this choice a disadvantage. Heat pumps are the worst performers, despite the significant reduction in operating costs. The consideration of a relatively large, expected increase in electricity prices puts ground-to-water heat pumps at a disadvantage compared to solar collectors. The advantage of these versions is the possibility of running the heat pump in reverse and thus using it as a source of cooling. This can be used, for example, on the top floors of a building where the installation of local cooling units is presumed. Nevertheless, it has been shown that heat pumps are generally more suitable for buildings with greater requirements for heating as well as cooling. However, the advantage of all the technologies considered is the possibility of benefiting from state subsidies (applicable to the Czech Republic).

An interesting insight into the information obtained is the expression of the savings generated compared to the reference version. Version 3 generates savings of over EUR 40,000 over the monitoring period, even under the assumption of large increases in electricity prices. The construction cost of a residential building without a heating and hot water technology is EUR 4,072,759. If the cheapest technology (Version 1) is installed, the total investment will be increased by 0.72%. In the case of choosing Version 3, which will reduce operating costs by about 22%, the investment costs will increase by 2.8%. This fact is therefore closely related to the investor’s attitude and whether he wants to rent or sell the apartment units. The utilisation of RES in a residential building can mean, on the one hand, an increase in investment costs, but, on the other hand, a significant saving in operating costs for the users and thus a good reputation on the residential market. This topic is closely related to the investor’s or developer’s business philosophy and their objectives and marketing strategies.

The evaluation of the LCC analysis including the relevant indicators for the grey water technology related to Reference Version 6 focusing on the most widespread technologies is displayed in the table below (

Table 12. Life cycle costs with energy and water price rise prediction.

LCC Type	Version 6	Version 7
LCC with energy price rise (without discounting) [EUR]	368,188	334,701
NPV with water and energy price rise [EUR]	234,162	228,815
NPV indicator 1 [EUR/m2 of GFA]	48	47
NPV indicator 2 [EUR/m2 of apartment FA]	134	131
NPV indicator 3 [EUR/m3 of built-up space]	15	15

).

The use of grey water technology results in significant savings in drinking water and associated costs. However, the operating costs also reflect the maintenance of the technology, and the costs associated with the operation of circulation pumps essential for recycled water distribution systems. Ignoring the trend in water and sewerage price increases, the LCC analysis shows that investment in a water recycling technology is not economically worthwhile as the investment costs are too high. On the other hand, when the annual increase in water and sewerage prices is included in the versions, Version 7 brings not only drinking water savings but also financial savings, as the reduction in water consumption offsets the costs associated with the investment and the operation of the system. The following graph (Figure 5) shows the result of Variant 7.

Recycling water for flushing toilets is currently not widely used in developers’ projects and this is unlikely to change in the short term.

The authors did not make a direct comparison of the above outputs with other published case studies primarily due to the large number of specifics associated with each project (e.g., different length of the monitoring period, amount of the discount rate, technical and technological design of the apartment building, etc.) and the insufficient number of similar articles. The authors see the results of their study as a factual representation of the actual situation for the selected building in different technological options. However, the outputs of this paper are globally consistent with similarly focused publications at the level of top-level conclusions. In particular, the high investment costs for the acquisition of RES technologies and their unsatisfactory life-cycle returns [32]. At the same time, there is also the aspect of minimal experience with the operation of RES technologies, which is reflected in the accuracy of cost estimation for the operational phase [33]. This fact is also reflected by the authors of the paper in their conclusions and they call for the creation of the necessary databases so that the results of the case studies yield the most objective results.

6. Conclusions

The results of the LCC analysis for the technologies used as a heat source for heating and hot water are as follows. The investment costs of the technologies using renewable energy sources (RES) proved to be too high compared to the reference version of gas condensing boilers. For the heat pump versions, the costs are paradoxically almost four times higher. Not even the large savings in energy costs could offset these costs. The relatively large increase in operating costs was due to the predicted price increase in electricity, which heat pumps need to some extent for their operation. In the context of the current energy mix composition used for power generation, which is largely made up of non-renewable sources, a relatively significant increase in prices can be observed from 2016 onwards, which can generally be predicted as a major problem for the future, not only for the Czech Republic [27]. Almost comparable life cycle costs to the reference version were achieved in Version 5 with biomass as the energy carrier. It even came to the fore after the application of the energy price rise prediction, as the analysis of pellet prices does not suggest a radical increase. In the data collection phase necessary for the LCC analysis, research was carried out regarding key parameters that would be of interest to potential investors when deciding on a technology to use. Life cycle costs are thus expressed per m² of the gross floor area of the building or per m² of the floor area of the apartment units and per m³ of the built-up space. The LCC/m² GFA ranges from 43 to 68 EUR/m². Thus, the analysis generally implies that without the use of state subsidy programs, despite the savings in operating costs, the life cycle costs of the technologies using renewable sources are not lower, except for the above-mentioned biomass.

The LCC analysis for the water management related version achieved better results. For the needs of the selected residential building, the designed technology accumulates grey water, which is then purified and used for flushing toilets. This version is also compared with the reference version represented by conventional toilet flushing with public mains water. The investment cost of the grey water technology is calculated at EUR 41,910 and given the 1/4 saving in drinking water and the expected increase in water and sewerage charges, the LCC/m² GFA of the building over the monitoring period of 20 years stands by EUR 27/m² better. Although this is not a major financial saving, it is a favourable result in terms of drinking water savings. Over 20 years, over 13 m³ of drinking water will be saved in the building under consideration. This technology is also covered by the state subsidy support and, as the results of the article show, it can be considered as a technology with great potential for the future.

Based on the case study, the authors see the scientific novelty of the published article in several points related to apartment buildings:

• Identification of appropriate sustainable technologies with economic justification for their acquisition, including operation, maintenance and renewal.
• Capturing current LCC indicators per m² of selected areas and per m³ of the built-up space.
• Creating a realistic picture of market opportunities and prices in the field of sustainable construction.

In the context of the LCC analysis, the uncertainties that may affect the results of the assessment need to be identified. These are, in particular, the following areas:

• Selecting components for sustainable technologies. The authors of the article have chosen top-quality products from renowned companies that have already established a name on the Czech market. However, there are certainly cheaper options.
• Operating costs cover mainly energy costs, which are determined based on the calculation of expected needs. The calculation is taken from the project documentation of the reference building. However, this uncertainty has also been consulted with the market.
• There is a degree of uncertainty in the calculation of the regular servicing and maintenance cost, which accounts for an appropriate percentage of the investment cost in accordance with national legislation. This may slightly distort the results of the versions with higher investment costs.
• A risk in the long-term analysis of the technologies using RES may also be a change in legislation related to the state support for these technologies. State programmes are still being modified and are therefore not considered in the analysis. This is to ensure that the results are as relevant as possible. On the other hand, however, given the stated objectives of the EU and the Czech Republic, it can be expected that state support for renewable energy sources will continue in the future and may even need to be increased to meet the state’s obligations.

The authors see topics for further research mainly in two disciplines. The first focuses on the on-going development/modifications of relevant methods and certification tools addressing the emerging “RES trends”. The other area is to focus research on a systematic collection of information on sustainable technologies that are experiencing a major boom in residential development, particularly on operation and maintenance data.