Calculating water upgrade paybacks can be tricky, especially if you don't take into account the other systems affected by upgrades. Here are five more ways to accurately calculate water upgrade payback.
5. Equipment Utility Savings: If part of the water efficiency upgrade includes upgrading equipment that in turn operates more efficiently, this needs to be reflected as savings as well, because the efficiency benefits of new equipment affect the calculation of water upgrade payback. As an example of this, picture changing out an industrial dishwasher for a more efficient model. The new one not only saves water, but it also saves electricity. It's these electrical savings that need to be part of the payback calculation.
6. Maintenance Savings: With regard to old equipment or fixtures, the more hours they have logged, the more maintenance is typically required to keep them operational. For example, a leaking or poorly functioning flushometer or an industrial dishwasher may require excessive monthly maintenance. Replacing these items with new equipment not only saves water, but also the maintenance time that is no longer required.
7. Anticipated Utility Rate Increases: Unfortunately for owners, water and sewer rates are starting to skyrocket. Rate hikes of 20 to 30 percent a year are becoming more and more frequent as utility companies either increase their fees to cover recently upgraded sewer treatment facilities, increased water supply costs, or planned future expansion. In other areas, infrastructure maintenance and repair and replacement costs are so substantial that the costs have to be passed on to the consumer. Combine all of this with the rise in water demand due to population increases and a decrease in supply due to droughts or depleted aquifer levels and it is easy to see why costs will continue to climb in the foreseeable future. These future cost increases that will be avoided by saving water help reduce the payback period as well.
8. Anticipated Rebates: Rebates can come in all shapes and sizes. Some are flat rebates per fixture, some are a percentage of the installation cost, some come from the city water utility and others from the sewer utility. Sometimes it is possible to receive multiple rebates from multiple utilities (for example, if you upgrade a piece of equipment that saves not only water, but also electricity). Regardless of how a rebate is awarded, it needs to be included in the payback calculation.
9. Accurate Construction Costs: Having the right number for construction costs is critical in computing a payback period. Overprice an upgrade and it may not fit into a payback window and never be performed. Choose cheap equipment or fixtures for the upgrade work, and the occupants may be left dissatisfied if they function poorly. The best way to ensure you have an accurate number for quality equipment and fixtures is to obtain it from a commercial mechanical contractor. Because they perform this type of work for a living and provide, at a minimum, one-year warranties for it, they have accurate cost estimating abilities and know which equipment will work the best and give you the best value — and payback — for the owner's dollar. n
Troy Aichele has been a commercial mechanical and plumbing contractor in the Pacific Northwest for more than 20 years. He performs "How to Perform a Commercial Water Audit" training workshops, which include training on a one-of-a-kind water conservation payback calculator, nationally and locally through his consulting company, Aichele and Associates, LLC.
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