Modulating/Condensing Fuel-Fired

Water Heater and Hydronic Boiler

Technology for increasing water heater/hydronic boiler efficiency

Federal

Technology

Alert

A publication series

designed to speed the

adoption of energyefficient and renewable 

technologies in the 

Federal sector 

Prepared by the 

New Technology 

Demonstration Program

The U.S. Department of Energy

requests that no alterations be

made without permission in any

reproduction of this document.

A modulating/condensing fuel-fired

water heater or hydronic boiler can

avoid losses associated, in conventional units, with cycling at less than

full load and with unrecovered latent

heat of water produced in the combustion process. A system which incorporates features that minimize cycling by

modulating fuel and air flow to the

combustor and that recover additional

heat from condensing moisture in the

flue gas stream can achieve reductions

in fuel consumption, operating costs,

and emissions.

This Federal Technology Alert (FTA)

provides information on current commercial-size products with these and

other features. Existing applications,

energy-saving mechanisms, installation

requirements, relevant case studies,

sample specifications, and additional

sources of information are presented.

Energy-Saving Mechanisms

Noncondensing-type hydronic boilers and water heaters are unable to 

recover the latent heat of water in the

combustion products of fuels that contain hydrogen and are, therefore, subject to the theoretical limit of the fuel

lower heating value resulting in

published full-firing rate efficiencies

of 78—85%. In addition, cycling losses

of 10—50% may be incurred by nonmodulating (on/off) units operating at

less than full load. A modulating/

condensing fuel-fired water heater 

or hydronic boiler can be an energyefficient alternative to such conventional units.

Potential Benefits

With a condensing design, effective

use of the full high heating value of

the fuel may be approached when the

water inlet temperature is low enough

to allow substantial recovery of the 

latent heat of moisture in the exhaust.

If wide-range combustion modulation

is implemented by controlling fuel 

DOE/EE-0171
and air supply, most of the losses 

associated with cycling may also be

avoided. Manufacturer-reported water

heater and hydronic boiler efficiencies

range from 93% to 99% and from

86% to 99%, respectively, depending

on firing rate and inlet water temperature.

Technology Selection

The FTA series targets technologies

that appear to have significant federalsector potential and for which some

federal installation experience exists.

New technologies were identified

through advertisements in the Commerce Business Daily and trade journals

and through direct correspondence.

Numerous responses were obtained

from manufacturers, utilities, trade 

associations, research institutes, federal sites, and other interested parties.

Technologies suggested were evaluated in terms of potential energy, cost,

and environmental benefits to the federal sector. They were also categorized

as those that are just coming to market

and those for which field data already

exist. Technologies classified as just

coming to market are considered for

field demonstration through the New

Technology Demonstration Program,

part of the U.S. Department of Energy s

Federal Energy Management Program

(FEMP) and industry partnerships.

Technologies for which some field data

already exist are considered as topics

for FTAs.

Application

This design is in use at sites representing every major commercial-size

building classification, including 

hospitals, universities, public schools,

hotels, office buildings, apartment

buildings, prisons, nursing homes, and

industrial facilities. Of these, only 21

have been federal-sector projects in

the majority of cases to provide domestic (service) hot water. The technology

is appropriate for either retrofit or

new construction applications and is

intended to replace conventional on/

off-controlled noncondensing gasfired technology.

Water Heater Case Study

A hypothetical case study of a central natural gas-fired domestic-service

water heating system for a 125-unit

apartment complex in New Jersey is

developed to illustrate the process 

required to determine the energy and

cost effectiveness of a modulating/

condensing water heater. 

If this unit operates at an estimated

annual average fuel-to-water efficiency

of 95%, it will show energy savings of

21% when compared to a conventional

unit with a corresponding efficiency

of 75%.

The total installed cost of a 

modulating/condensing unit for this

application is estimated to be $16,980.

Annual maintenance costs are estimated to total $250 in odd service

years and $474 in even service years.

When entered as inputs to Building

Life-Cycle Cost (BLCC) software 

developed by the National Institute of

Standards and Technology, the estimates for these costs, the unit energy

consumption, and natural gas costs for

the area give a present value project

cost of $124,572 for the estimated 

15-year life cycle of the modulating/

condensing unit.

For a conventional unit costing

$14,000 installed and having the same

maintenance costs as those attributed

to the modulating/condensing unit, the

corresponding base case software 

results give a present value project cost

of $149,230 for the same life cycle.

Thus, the estimated advantages of

the modulating/condensing unit when

compared to a conventional unit in

this situation are characterized on a

life-cycle basis by a 21% energy saving, a 17% present value cost saving,

a 9.27 savings-to-investment ratio,

and a 20.65% adjusted internal rate of

return.

Hydronic Boiler Case Study

The second case study considers a

central natural gas-fired boiler system

serving the hydronic space heating

needs of a building located in Madison,

Wisconsin, with a design heat loss 

estimated to be 5,000,000 Btu/h.

With the use of Madison hourly

weather data to determine heating 

demand for each temperature bin, the

associated annual fuel usage is estimated using the corresponding estimated efficiency of the modulating/

condensing system (86% to 99% in

this situation) and of a conventional

system (45% to 82% here). The total

heating season natural gas consumption was estimated to be 37% less for

the modulating/condensing system

than for the conventional system.

The total installed cost of a 

modulating/condensing system for

this application is estimated to be

$105,337. Annual maintenance costs

are estimated to total $1,410 in odd

service years and $1,920 in even service years. When entered as inputs 

to BLCC software, the estimates for

these costs, the system energy consumption, and the natural gas costs for

the area give a present value project

cost of $886,355 for the estimated 

15-year life cycle of the modulating/

condensing system.

For a conventional system costing

$75,000 installed and having the same

maintenance costs as those attributed

to the modulating/condensing system,

the corresponding base case results

from the BLCC computer program

give a present value project cost of

$1,304,638 for the same life cycle.

Thus, the estimated advantages of

the modulating/condensing system

when compared to a conventional system in this situation are characterized

on a life-cycle basis by a 37% energy

saving, a 32% present value cost saving, a 14.79 savings-to-investment 

ratio, and a 24.46% adjusted internal

rate of return.
1

Federal

Technology

Alert

Modulating/Condensing Fuel-Fired

Water Heater and Hydronic Boiler

Technology for increasing water heater/hydronic boiler efficiency 

Abstract

A modulating/condensing fuelfired water heater or hydronic boiler

can avoid losses associated, in conventional units, with cycling at less

than full load and with unrecovered

latent heat of water produced in the

combustion process. A system which

incorporates features that minimize

cycling by modulating fuel and air

flow to the combustor and that recover

additional heat from condensing

moisture in the flue gas stream can

achieve reductions in fuel consumption, operating costs, and emissions.

This Federal Technology Alert

provides information on current

commercial-size products with these

and other features. Existing applications, energy-saving mechanisms,

and installation requirements are 

described. Two relevant case studies

with sample specifications are provided to illustrate procedures by which

a federal energy manager may estimate energy savings and life-cycle

costs for potential applications of

this technology. A list of federalsector users and a bibliography are

included for prospective users who

have specific questions not fully 

addressed here.

Modulating/Condensing Fuel-Fired

Water Heater (photo courtesy of Aerco

International, Inc.)
2

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3

Contents

Abstract .......................................................................................................... 1

About the Technology .................................................................................... 5

Application Domain

Energy-Saving Mechanisms

Other Benefits

Variations

Installation

Certifications

Emissions

Maintenance

Water Heater Case Study ................................................................................ 9

Requirement

Energy Savings Potential

Life-Cycle Cost

Hydronic Boiler Case Study .......................................................................... 9

Requirement

Energy Savings Potential

Life-Cycle Cost

Manufacturers ................................................................................................13

Who is Using the Technology ........................................................................13

For Further Information..................................................................................14

Appendixes ....................................................................................................15

Appendix A.1 Building Life-Cycle Cost Analysis of 

Modulating/Condensing Water Heater ................................ 16

Appendix A.2 Building Life-Cycle Cost Analysis of 

Hydronic Boiler .................................................................. 19

Appendix B Water Heater Life-Cycle Cost Analysis Summary: 

Energy Conservation Investment Program.......................... 23

Appendix C Sample Specification for Modulating/Condensing Water 

Heating Plant ...................................................................... 24

Appendix D Hydronic Boiler Life-Cycle Cost Analysis Summary: 

Energy Conservation Investment Program.......................... 25

Appendix E Sample Specification for Modulating/Condensing Hydronic

Boiler System ...................................................................... 26

Appendix F Federal Life-Cycle Costing Procedures and the 

BLCC Software .................................................................. 28
4

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5

About the Technology

Noncondensing-type hydronic

boilers and water heaters are unable

to recover the latent heat of water 

in the combustion products of fuels

that contain hydrogen and are, therefore, subject to the theoretical limit

of the fuel lower heating value

resulting in published full-firing rate

efficiencies of 78—85%. In addition,

cycling losses of 10—50% may be

incurred by non-modulating (on/off)

units operating at less than full load.

A modulating/condensing fuelfired water heater or hydronic boiler

can be an energy-efficient alternative

to such conventional units. For 

example, the Aerco International

KC-1000 Series Domestic Water

Heater/Hydronic Boiler is a direct

fuel-fired heating unit featuring a

modulating forced-draft combustion

system (usable firing rate of 70,000—

1,000,000 Btu/h), condensing heat

exchanger design, and proportional

integral derivative temperature control. It is offered in two basic models:

water heater and hydronic boiler.

A water heater model (illustrated

in Figure 1) is a semi-instantaneous,

open loop system with a 23-gallon

storage volume and a recovery capacity of 1,116 gal/h at a 100¡F temperature rise. Control in the water heater

model is from an internal setpoint

(constant temperature adjustable

from 100¡F to 200¡F) with load feedforward (based on a signal from an

integral BTU transmitter) and outlet

temperature feedback.

The hydronic boiler model can be

employed either as a single standalone unit or as part of a multi-boiler

arrangement (as shown in Figure 2)

to supply closed loop heating systems.

The single hydronic boiler has three

control options: (1) internal setpoint

[constant temperature adjustable from

50¡F to 220¡F] with outlet temperature feedback; (2) external setpoint

[indoor/outdoor reset ratio adjustable

from 0.3 to 3.0 based on building

reference, outside air, and header

temperatures] with outlet temperature

feedback; and (3) remote setpoint

[4—20 mA signal corresponding to

50—220¡F] with outlet temperature

feedback. The hydronic multi-boiler

(2—8 units) system may be controlled

from internal, external, or remote

setpoints by means of a Boiler 

Management System for sequential

or parallel boiler firing (at rates up

to 8,000,000 Btu/h in an eight-unit

arrangement) with outlet temperature feedback.

Each model is currently produced

in two fuel versions: (1) natural gas

Figure 1. Cutaway View of Water and (2) propane.

Heater Unit

Figure 2. Typical Multi-Unit Water Heater and Hydronic Boiler Installation

(photo courtesy of Aerco International, Inc.)
6

Application Domain 

This design is in use at sites representing every major commercial-size

building classification. More than

2,700 units have been installed from

Alaska to Jamaica at 1,200 facilities

including hospitals, universities, public schools, hotels, office buildings,

apartment buildings, prisons, nursing

homes, and industrial facilities. Of

these, only 21 have been federal-sector

projects (Department of Defense,

Department of Housing and Urban

Development, Federal Reserve System, and Veterans Administration)

in the majority of cases to provide

domestic (service) hot water.

The technology is appropriate for

either retrofit or new construction

applications and is intended to replace

conventional on/off-controlled noncondensing gas-fired technology

such as copper/copper clad fin tube or

cast iron type hydronic boilers and

water heaters combining a boilertype baffled U-tube heat exchanger

with a storage tank.

As a rough sizing guide (based 

on installations at altitudes below

2,000 feet assuming 40¡F inlet water

temperature and building recirculation), one of these water heaters can

supply buildings with approximately

85—150 apartments, 50—100 nursing

home beds, 80—100 hospital/medical

facility beds, 800—1000 commuting

students, 140 resident (dormitory)

college students, 1400—1800 office

workers, or 30 showers in prisons/

correctional facilities/gymnasiums

(gang shower applications in prisons or gymnasiums may require 

additional stratified storage to 

satisfy the load requirement at 

an economical cost).

Energy-Saving Mechanisms 

To avoid condensation with associated acidic conditions and potential

corrosion of metals used in conventional units, a secondary pumping

loop may be required to ensure that

the inlet water is warm enough to

keep flue-side surface temperatures

higher than the local dew points (see

Figure 3) of the exhaust stream.

With a condensing design, effective

use of the full high heating value

of the fuel may be approached when

the water inlet temperature is low

enough to allow substantial recovery

of the latent heat of moisture in 

the exhaust. If wide-range combustion modulation (see, for example,

Figure 4) is implemented by controlling fuel and air supply, most of the

losses associated with cycling may

also be avoided. In addition, the

semi-instantaneous fire-tube design

provides a compact configuration

with minimum storage to reduce 

radiant heat losses. Manufacturer

reported efficiencies range from 93%

to 99% on the water heater model

(in Underwriters Laboratories tests)

and 86% to 99% on the hydronic

boiler model (as given in Figure 5),

depending on firing rate and inlet

water temperature. The average 

annual efficiency for both units is

estimated by a manufacturer to be

approximately 95%.

Other Benefits 

The capability of the unit to maintain tight temperature control (–4¡F

for the water heater version; –2¡F

for the boiler version), modulate firing rate with load, and operate in

the condensing mode eliminates the

Figure 3. Combustion Efficiency Versus Flue Gas Temperature
7

need for additional system storage,

temperature control blending valves,

and primary-secondary pumping systems in most applications. Because

this water heater does not include

appreciable water storage, the risk of

Legionella pneumophila bacteria proliferation is considerably diminished.

The incorporation of a baffle-free

vertical-helical combustion chamber/

heat exchanger design (see Figure 6)

using 70-30 copper-nickel for the

Figure 4. Air/Fuel Supply System

Figure 5. An Example Hydronic Boiler Efficiency Versus Inlet Water Temperature

Figure 6. Vertical-Helical Combustion

Chamber/Heat Exchanger
8

tubes and 90-10 copper-nickel for

the wall, head, and tube sheet (combined in the water heater version with

a copper-lined pressure vessel) in a

counterflow configuration reduces

stress points, scaling tendencies, and

corrosion impacts which can restrict

service life in competing units which

employ heat exchangers using carbon

steel and/or alternate configurations.

An equal-capacity water heater of

conventional design employing a

storage tank will typically have a

footprint four times larger than the

example KC-1000 and may incur 

increased construction costs if structurally reinforced floors or special

supports are required.

A stainless steel/Inconel highvelocity nozzle-mix burner with 

interrupted direct spark ignition, 

rectification flame detection, and

water volume damping restricts

noise levels of the unit to about 

6 dB below those associated with

pulsed-combustion models (which

also require vibration isolators and

flexible connections to the building

piping systems).

Variations 

Generally it is recommended that

separate water heating and space

heating (hydronic boiler) systems 

be employed wherever possible to

achieve the greatest benefits of high

efficiency and precise temperature

control. However, in special situations where certain limitations on

space, weight, or fuel supply lines

apply, multiple hydronic boiler units

can be employed in a dual service

system as a combination domestic

water/boiler plant (see, for example,

Figure 7). Operation in this fashion

would require the addition of dualservice controls (boiler management/

combination control systems) and an

external hot water storage/generator

tank with closed loop coil, motorized

valve, and circulation pump.

Installation 

The dimensions of the unit, 

57" (L) x 22" (W) x 8" (H), allow

easy clearance through most doorways. Unit weights are 1,210 lb dry;

1,250 lb shipping; and 1,399 lb

installed (wet).

Manufacturer published installation

guidelines are in accordance with

the current National Electrical Code

(National Fire Protection Association

70) and the National Fuel Gas Code

(National Fire Protection Association

54/American National Standards 

Institute Z223.1).

Fuel supply requirements are 

14" WC maximum static, 10" WC

maximum/8.5" WC minimum operating over the entire firing range for

natural gas or propane (11/

4" NPT),

provided by an external pressure

regulator with no more than 1" WC

droop at full volume flow (1,000 scfh

for natural gas).

Adequate provision must also be

made per National Fire Protection

Association codes for 250 scfm of

combustion air from within the building (if air infiltration to the building

is sufficient) or from outside the

building (through either louvered

envelope openings or a sealed combustion air duct between the outdoors

and the unit) to the blower in each

unit. The minimum diameter of a

sealed combustion air duct for one

unit is 6 inches.

For gas-fired equipment such as

the hydronic boiler, classified as an

American National Standards Institute Category III and IV appliance

(operating temperatures of up to

480¡F, positive pressure with direct

side wall venting capability, condensing flue gas service), the only

exhaust vent material approved by

both Underwriters Laboratories Inc.

and the American Gas Association

and available in the required 6" diameter is AL-29-4C stainless steel. 

Figure 7. Example Combination Plant Piping Arrangement
9

Electrical service requirements

are 120 V, single-phase, 60 Hz, 20 A

(8-A current requirement at full firing, 4-A current draw at minimum

firing, 40-W power consumption in

standby mode).

Water connections are 2" NPT for

the water heater model (maximum

constant water flow: 30 gal/min)

and 4" ANSI 150-lb flange for the

hydronic boiler model (minimum

water flow: 25 gal/min to maintain

stable boiler operation; maximum

water flow: 150 gal/min to prevent

construction material erosion). The

condensate (less than 5 gal/h) connection is 5/

8" ID hose and the drain

valve is 1 inch.

Both models are Underwriters

Laboratories Inc. and Underwriters

Laboratories of Canada listed for 

alcove installation on combustible

flooring.

Certifications 

The example KC-1000 series 

hydronic boiler and domestic water

heater design is in accordance with

and approved by the following classification organizations:

• Underwriters Laboratories Inc.

listed in accordance with UL 7 9 5

Standards for Safety: CommercialIndustrial Gas Heating Equipment;

• Factory Mutual System approved

combustion system (standard gas

train in accordance with CSD-1,

optional gas train in accordance

with Industrial Risk Insurers is

available); 

• American Society of Mechanical

Engineers in accordance with 

the ASME Boiler and Pressure

Vessel Code, Section IV: Rules

for Construction of Heating Boilers

(hydronic boiler stamped with

code symbol H certifying 150 psig

maximum allowable working

pressure, water heater stamped

with code symbol HLW certifying 160 psig maximum allowable working pressure at 200¡F

maximum temperature); and 

• Underwriters Laboratories of

Canada listed. 

The hydronic boiler is classified

according to the American National

Standards Institute as a Category III

and IV appliance; hence it is capable

of direct side-wall venting.

Emissions 

Unit emissions are in accordance

with all current national and state

standards, meeting the requirements

of Underwriters Laboratories 795 as

well as American National Standards

Institute Z21.13 and Z21.10.3.

Maintenance

The hydronic boiler version requires

the following routine maintenance:

(1) inspect the spark ignitor and flame

detector every 6 months and replace

each every 12 months [20 min labor];

(2) check the combustion settings

6 months after the initial installation,

and check/recalibrate the combustion

settings every 12 months thereafter

[90 min]; and (3) inspect the combustion chamber every 24 months

[60 min, including replacement of

the burner gasket and the burner 

release gasket]. The water heater

version requires all the routine maintenance items indicated above for the

hydronic boiler plus two additional

items: (4) lubricate the BTU transmitter pump 6 months after initial

installation and then every 12 months

thereafter [15 min] and (5) inspect

the heat exchanger [90 min with 

access through bolted upper heater

head, including replacement of the

head gasket and the head release

gasket] for scale build-up every 24

months under typical conditions or

as frequently as every 4 months if

the unit is subjected to severe hard

water conditions.

No unusual maintenance issues

were noted by contacts at existing

federal sites.

Water Heater Case

Study

Requirement 

Consider a central natural gas-fired

domestic-service water heating system for a 125-unit apartment complex located in New Jersey with dishwashers, building recirculation, and

public residential-type clothes washing areas. The annual average water

temperature entering the heater is 55¡F,

the specified supply temperature at

the heater outlet is 140¡F, and the

local altitude is less than 2,000 feet.

According to American Society 

of Heating, Refrigerating and 

Air-Conditioning Engineers, Inc.,

(ASHRAE) guidelines [Table 7 in

Chapter 44 (Service Water Heating)

of the 1991 ASHRAE Handbook:

Heating, Ventilating, and AirConditioning Applications], this

complex will require an average hot

water flow of 4,625 gal/day. The useful heat required to achieve the specified 85¡F temperature rise at this flow

is 3,219,300 Btu/day [(4,625 gal/

day) x (85¡F) x (8.189 Btu/gal/¡F)].

Energy Savings Potential

Manufacturer sizing guidelines

indicate that one KC-1000 unit will

provide adequate capacity for this

application. If the unit operates at
10

an annual average fuel-to-water 

ef-ficiency of 95% as suggested by

the manufacturer, its annual natural

gas consumption will be 12,369 therms

[(3,219,300 Btu/day) x (365 days/yr) /

(0.95) / (100,000 Btu/therm)]. If the

conventional system has an annual

average fuel-to-water efficiency of

75%, its associated annual natural gas

consumption will be 15,667 therms.

In this case, the modulating/condensing option would provide energy

savings of 21% when compared to

the conventional system reflected

in a corresponding reduction in natural gas consumption of 3,298 therms

per year. Over the estimated 15-year

life of the units, the total savings

amount to 49,470 therms.

Life-Cycle Cost

The current local natural gas 

price is assumed to be $0.63/therm

and future fuel price escalation is

taken to be that for commercial 

customers in Census Region 1 

(Connecticut, Maine, Massachusetts,

New Hampshire, New Jersey, New

York, Pennsylvania, Rhode Island,

and Vermont) as incorporated in the

Building Life-Cycle Cost (BLCC)

software available from the National

Institute of Standards and Technology.

If a KC-1000 (Model GWW) costs

$14,000, installation parts $504 (gas

pressure regulator $154 and vent

material $350), installation labor

$2,176, and startup labor $300, then

the total cost to startup is $16,980.

Based on the five routine requirements detailed earlier, annual maintenance costs are estimated by the

manufacturer to total $250 ($105

parts and $145 labor) in odd service

years and $474 ($179 parts and $295

labor) in even service years.

These costs and the annual natural

gas consumption determined above

were entered as inputs to BLCC.

For compatibility with the program

data format, maintenance cost estimates were entered in two components: $250 annual recurring costs

attributed to Items 1, 2, and 4 (to

which one uniform present value

factor is applied in BLCC) and $224

nonannually recurring costs attributed

to Items 3 and 5 (to which a different

single present value factor for each

relevant year is applied in BLCC).

To estimate fuel costs, BLCC employs

DOE energy price escalation rates

for the designated time period, fuel

type, region, and class of service to

calculate modified uniform present

value factors which are applied to

the given consumption and current

energy price. Based on the indicated

4.0% discount rate for federal energy

conservation and renewable energy

projects, the results for the estimated

15-year life of the water heater are

as given in AppendixA, with an 

estimated present value life-cycle

project cost of $124,572.

If the conventional unit costs

$14,000 installed and has the same

maintenance costs as those attributed to the modulating/condensing

unit, the corresponding base case

result from the BLCC computer program gives an estimated present value

life-cycle project cost of $149,230.

When the BLCC comparison routine

is exercised, the output (Figure 8)

shows that the present value of the

net savings achieved by choosing the

modulating/condensing option is

$24,658, the associated savings-toinvestment ratio is 9.27, and the 

related adjusted internal rate of return

is 20.65%. An example information

sheet, recasting the items already 

described in the format required if

this case had been considered under

the Energy Conservation Investment

Program (ECIP), is presented in 

Appendix B. For simplified comparison purposes here, the SIOH

(supervision, inspection and overhead) and Design Cost elements,

Items 1B and 1C of the ECIP format,

have been assumed to be included 

in the construction cost given as

Item 1A. The simple payback for

this case is estimated to be 1.43 years.

An associated sample specification

is included as AppendixC.

Hydronic Boiler

Case Study

Requirement

Consider a central natural gas-fired

boiler system serving the hydronic

space heating needs of a building 

located in Madison, Wisconsin.

Heat loss from the building under

design conditions (-20¡F for this 

location from ASHRAE) is estimated

to be 5,000,000 Btu/h. The building

balance point temperature is specified as 60¡F. Supply water temperature at design conditions is specified

to be 170¡F. The design temperature

differential is 30¡F.

Energy Savings Potential

Manufacturer sizing methods indicate that six KC-1000 units controlled

by a boiler management system will

provide adequate capacity for this

application. Madison hourly weather

data for each temperature bin are

taken from ASHRAE RP-385: Bin

and Degree Hour Weather Data for

Simplified Energy Calculations. As
11

indicated in the table below, heating

demand is assumed to be proportional to the difference between balance point temperature and outside

air temperature for each bin. Annual

fuel usage for each bin is determined

by multiplying the heating demand by

the hours, dividing by estimated unit

efficiency, and converting to therms.

As an example, using the 20¡F bin

for the Aerco system operating with

the boiler management system set

for external setpoint mode and 

parallel boiler firing, one finds its

annual natural gas consumption to

be 15,156 therms [(2,500,000 Btu/h)

x (565 h) / (0.932) / (100,000 Btu/

therm)]. Summing over all bins gives

a total heating season natural gas

consumption of 111,146 therms for

the modulating/condensing hydronic

boiler system. If the conventional

system has a design point efficiency

of 82%, decreasing 5% for each 10¡F

above design outdoor temperature,

its associated natural gas consumption will be 176,522 therms. In this

case, the modulating/condensing

system option would provide energy

savings of 37% when compared to

the conventional system reflected

in a corresponding reduction in natural gas consumption of 65,376 therms

per year. Over the estimated 15-year

life of the system, the total savings

amount to 980,640 therms. The 

relative efficiency and energy consumption values are presented in 

bar graph form in Figures 9 and 10.

The substantially lower estimated

energy consumption for the Aerco

unit, especially in the mid to upper

bin temperature ranges, reflects the

higher efficiencies achievable with

its modulating and condensing capabilities under the part load, low inlet

temperature conditions which dominate the heating season.

Life-Cycle Cost

The current local natural gas price

is assumed to be $0.50/therm and

future fuel price escalation is taken

to be that for commercial customers

in Census Region 2 (Illinois, Indiana,

Iowa, Kansas, Michigan, Minnesota,

Missouri, Nebraska, North Dakota,

Ohio, South Dakota, and Wisconsin).

If the six KC-1000 (Model GWB)

units cost $84,000, installation parts

$3,024 (gas pressure regulators $924

and vent material $2,100), boiler

management system $2,760, outdoor reset kit (including outside air

and common discharge header temperature sensors) $248 installation

labor $13,505 and startup labor

$1,800, then the total cost to startup

NIST BLCC: COMPARATIVE ECONOMIC ANALYSIS

BASE CASE: CFTTWHWP

ALTERNATIVE: KC1000GWW

PRINCIPAL STUDY PARAMETERS: 

---------------------------

ANALYSIS TYPE: Federal Analysis--Energy Conservation Projects

STUDY PERIOD: 15 YEARS (1995 THROUGH 2009)

DISCOUNT RATE: 4.0% Real (exclusive of general inflation)

BASE CASE LCC FILE: CFTTWHWP.LCC

ALTERNATIVE LCC FILE: KC1000GW.LCC

COMPARISON OF PRESENT-VALUE COSTS

BASE CASE: ALTERNATIVE: SAVINGS

CFTTWHWP KC1000GWW FROM ALT.

INITIAL INVESTMENT ITEM(S): ------------ ------------ ------------

CASH REQUIREMENTS AS OF OCCUPANCY $14,000 $16,980 -$2,980

--------- --------- ---------

SUBTOTAL $14,000 $16,980 -$2,980

FUTURE COST ITEMS:

ANNUAL AND NON-AN. RECURRING COSTS $3,939 $3,939 $0

ENERGY EXPENDITURES $131,290 $103,653 $27,637

--------- --------- ---------

SUBTOTAL $135,230 $107,592 $27,638

--------- --------- ---------

TOTAL P.V. LIFE-CYCLE COST $149,230 $124,572 $24,658

NET SAVINGS FROM PROJECT KC1000GWW COMPARED TO PROJECT CFTTWHWP

Net Savings = P.V. of non-investment savings $27,638

- Increased total investment $2,980

-------------

Net Savings: $24,658

SAVINGS-TO-INVESTMENT RATIO (SIR)

FOR PROJECT KC1000GWW COMPARED TO PROJECT CFTTWHWP

P.V. of non-investment savings

SIR = --------------------------- = 9.27

Increased total investment

ADJUSTED INTERNAL RATE OF RETURN (AIRR)

FOR PROJECT KC1000GW COMPARED TO PROJECT CFTTWHWP

(Reinvestment rate = 4.00%; Study period = 15 years)

AIRR = 20.65%

Note: the NS, SIR, and AIRR computations include differential capital

replacement costs and resale value (if any) as investment costs, per 

NIST Handbook 135 (FEMP analysis only).

Figure 8. Water Heater Comparative Analysis from NIST BLCC
12

is $105,337. Based on the three 

routine requirements detailed earlier,

annual maintenance costs are estimated to total $1,410 ($630 parts

and $780 labor) in odd service years

and $1,920 ($780 parts and $1,140

labor) in even service years.

As in the first case study, these costs

and the annual natural gas consumption determined above were entered

as inputs to the BLCC computer

program. Again, for compatibility

with the program data format, maintenance cost estimates were entered 

in two components: $1,410 annual

recurring costs attributed to Items 1

and 2 (to which one uniform present

value factor is applied in BLCC) and

$510 nonannually recurring costs 

attributed to Item 3 (to which a dif-|

ferent single present value factor 

for each relevant year is applied in

BLCC). Based on the indicated 

4.0% discount rate for federal energy

conservation and renewable energy

projects, the results for the estimated 15-year life of the modulating/

condensing boiler system give an 

estimated present value life-cycle

project cost of $886,355.

If the conventional unit costs

$75,000 installed and has the same

maintenance costs as those attributed to the modulating/condensing

system, the corresponding base

case result from the BLCC computer program gives an estimated

present value life-cycle project cost

of $1,304,638.

When the BLCC comparison 

routine is exercised, it shows that

the present value of the net savings achieved by choosing the 

modulating/condensing system 

option is $418,283, the associated

savings-to-investment ratio is 14.79,

and the related adjusted internal 

rate of return is 24.46%. The corresponding ECIP information sheet

(showing an estimated simple payback of 0.93 year) and sample specification are presented in Appendixes

D and E.

Hydronic Boiler Energy Savings Analysis by Bin Method

Bin Minimum Heating Annual Conventional System Aerco System Aerco Savings

Outside Air Demand Occurrence

Temperature Efficiency Fuel Efficiency Fuel

(¡F) (106 Btu/h) (h) (%) (therms) (%) (therms) (%) (therms)

55 0.312 626 44.5 4,396 96.5 2,027 53.9 2,369

50 0.625 569 47.0 7,566 99.1 3,589 52.6 3,977

45 0.938 548 49.5 10,379 99.0 5,189 50.0 5,190

40 1.250 533 52.0 12,812 98.3 6,778 47.1 6,034

35 1.562 658 54.5 18,865 97.9 10,502 44.3 8,363

30 1.875 865 57.0 28,454 97.3 16,669 41.4 11,785

25 2.188 657 59.5 24,154 96.0 14,971 38.0 9,183

20 2.500 565 62.0 22,782 93.2 15,156 33.5 7,626

15 2.812 267 64.5 11,642 91.3 8,225 29.4 3,417

10 3.125 235 67.0 10,961 90.1 8,151 25.6 2,810

5 3.438 174 69.5 8,606 89.0 6,721 21.9 1,885

0 3.750 220 72.0 11,458 88.2 9,354 18.4 2,104

-5 4.062 71 74.5 3,872 87.4 3,300 14.8 572

-10 4.375 8 77.0 455 87.1 402 11.6 53

-15 4.688 1 79.5 59 86.8 54 8.5 5

-20 5.000 1 82.0 61 86.6 58 4.9 3

heating

season 7,401 59.3 176,522 94.2 111,146 37.0 65,376
13

Manufacturers

The firms listed below were identified as suppliers of the technology

at the time of development of this

FTA. This listing does not purport

to be complete, to indicate the right

to practice the technology, or to 

reflect future market conditions.

Aerco International, Inc.

159 Paris Avenue

Northvale, NJ 07647

(201) 768-2400

Fax: (201) 784-8073

PVI Industries, Inc.

P.O Box 7124 

Fort Worth, TX 76111

(800) 433-5654

Who is Using the Technology

The list below includes government sector contacts, agencies, and

locations that have the technology

currently installed and operating.

The reader is invited to broaden his/

her understanding of the equipment

by making use of available knowledge

concerning such applications in federal facilities.

Existing Sites:

Department of Defense

Department of the Air Force

377th Air Base Wing

Kirtland AFB

2050 Wyoming Boulevard, S.E.

Kirtland Air Force Base, NM 87117

Julian Nesbitt

West Zone Manager

(505) 846-5293

(three natural gas-fired hydronic

boilers for an office/computer building installed in 1994)

Department of Defense

Department of the Air Force

377th Air Base Wing

Kirtland AFB

2050 Wyoming Boulevard, S.E.

Kirtland Air Force Base, NM 87117

Leonard Garcia

East Zone Manager

(505) 846-0123

(one propane-fired hydronic boiler

for a fire station installed in 1993)

Federal Reserve System

Federal Reserve Bank of San Francisco

(12th District)

Salt Lake City Branch

120 South State Street

Salt Lake City, UT 84111

Ted Cruze

Building Supervisor

(801) 322-7801

(one natural gas-fired water heater for

an office building installed in 1994)

Figure 9. Hydronic Boiler Efficiency Versus Bin Minimum Outside Air

Temperature

Figure 10. Hydronic Boiler Energy Consumption Versus Bin Minimum Outside

Air Temperature
14

Wisconsin National Guard

2402 Bowman Street

Madison, WI 53704

Ray Steinich

(608) 242-3370

(one natural gas-fired water heater for

an office building installed in 1991)

Department of Defense

Department of the Army

Ft. Lewis

Fort Lewis, WA 98433

Jim Thayer

Mechanical Branch Chief

Operations and Maintenance Division

(206) 967-5237

(one natural gas-fired water heater for

Building 8085, a noncommissioned

officers club, installed in 1994)

Department of Defense

Department of the Air Force

62 AW/PA

100 Main Street

McChord AFB

McChord Air Force Base, WA 98438

Jim Hill

Construction Management

(206) 984-5739

(one natural gas-fired hydronic 

boiler for Building 555, an office

building, installed in 1991)

For Further Information

Manufacturer s Application Notes:

Aerco, 1995. Aerco Gas-Fired Product Catalog, Aerco International, Inc.

Aerco, 1995. Aerco Gas-Fired

Equipment Service Start-Up and

Training (SST) Manual, Aerco 

International, Inc.

Case Studies:

Agulnick, S., 1995. High-tech

Heat, The Post-Star, Glens Falls,

New York, January 31, 1995.

Reese, M. R., 1994. Johnson 

Elementary: A state-of-the-art

school building, Engineered 

Systems, April 1994.

Eade, R., 1994. Multiple Boilers

Appeal to the Cost-Conscious, Engineered Systems, April 1994.

Ideas for Mechanical Retrofits:

Boiler retrofit options are sidestepped for decentralized space and

water heater installations, Buildings,

Vol. 87, No. 2, February 1993.

Wisconsin Natural Gas Company,

1990. Water Heaters: Part of the

Energy Plan Greenbriar Hospital 

of Greenfield, Energy Profile from

Blueprint for Savings, 1990.

Herring, J., 1992. Strauss Bros.

Veal Keeps Water Sizzling Efficiently, Resource, August 1992.

Aerco, 1995. The newly-built 

Maple Avenue Middle School,

Saratoga Springs, NY, must install:

The most energy-efficient heating

and hot water systems, GF-3200,

Aerco International, Inc., May 1995.

Aerco, 1995. Quality Inn, Waterbury,

CT, must decide: Fix or replace

original heating and hot water systems? , GF-3201, Aerco International, Inc., May 1995.

Other References:

ASHRAE, 1991. 1991 ASHRAE

Handbook: Heating, Ventilating,

and Air-Conditioning Applications,

American Society of Heating, 

Refrigerating and Air-Conditioning

Engineers, Inc., Atlanta, Georgia.

ASHRAE, 1992. 1992 ASHRAE

Handbook: Heating, Ventilating,

and Air-Conditioning Systems and

Equipment, American Society of

Heating, Refrigerating and AirConditioning Engineers, Inc., 

Atlanta, Georgia.

ASHRAE, 1993. 1993 ASHRAE

Handbook: Fundamentals, American

Society of Heating, Refrigerating

and Air-Conditioning Engineers,

Inc., Atlanta, Georgia.

Degelman, L. O. 1984. Development

of Bin Weather Data Simplified Energy Calculations and Variable Base

Degree Information, Final Report,

ASHRAE Research Project 385, 

Department of Architecture, Texas

A&M University, College Station,

Texas.

Degelman, L. O. 1986. Bin and

Degree Hour Weather Data for 

Simplified Energy Calculations,

ASHRAE RP-385, American Society

of Heating, Refrigerating and AirConditioning Engineers, Inc.

Ruegg, R. T. 1980. Life-Cycle Costing Manual for the Federal Energy

Management Programs, National

Bureau of Standards Handbook 135,

U.S. Department of Commerce.

Lippiatt, B. C. 1992. Energy Prices

and Discount Factors for Life-Cycle

Cost Analysis 1993, NISTIR 

85-3273-7, U.S. Department of

Commerce.

Petersen, S. R. 1993. The NIST

Building Life-Cycle Cost Program

User s Guide and Reference Manual,

NISTIR 4481, National Institute of

Standards and Technology.
15

Appendixes

Appendix A.1: Building Life-Cycle Cost Analysis of Modulating/Condensing Water Heater

Appendix A.2: Building Life-Cycle Cost Analysis of Hydronic Boiler

Appendix B: Water Heater Life-Cycle Cost Analysis Summary: Energy Conservation

Investment Program 

Appendix C: Sample Specification for Modulating/Condensing Water Heating Plant 

Appendix D: Hydronic Boiler Life-Cycle Cost Analysis Summary: Energy Conservation

Investment Program 

Appendix E: Sample Specification for Modulating/Condensing Hydronic Boiler System

Appendix F: Federal Life-Cycle Costing Procedures and the BLCC Software
16

Appendix A.1

Building Life-Cycle Cost Analysis 

for Modulating/Condensing Water Heater

****************************************************

* NIST BLCC INPUT DATA LISTING *

****************************************************

FILE NAME: KC1000GW

FILE LAST MODIFIED ON 08-23-1995/16:12:33

PROJECT TITLE: KC1000GWW

COMMENT: KC1000 water heater case study

GENERAL DATA: 

ANALYSIS TYPE: Federal Analysis--Energy Conservation

Projects

BASE DATE FOR LCC ANALYSIS: 1995 

STUDY PERIOD: 15 years

PLANNING/CONSTRUCTION PERIOD: 0 years

OCCUPANCY DATE: 1995

DISCOUNT AND INTEREST RATES Real (exclusive of general inflation)

DISCOUNT RATE: 4.0%

CAPITAL ASSET COST DATA:

INITIAL COST ($) 16,980

EXPECTED COMPONENT LIFE(YRS) 15

RESALE VALUE FACTOR 0.00%

NUMBER OF REPLACEMENTS 0

NO REPLACEMENTS

OPERATING AND MAINTENANCE COST DATA:

ANNUAL RECUR O&M COST ($): 250

NON-AN RECURRING O&M COSTS ($):

YR AMOUNT

2 $224 

4 $224 

6 $224 

8 $224 

10 $224 

12 $224 

14 $224 

ENERGY COST DATA:

NUMBER OF ENERGY TYPES = 1 

DOE energy price escalation rates filename: ENCOST93.RAN

DOE region (state code): 1 (NJ)

DOE rate schedule type: Commercial 

DOE energy price escalation rates used with energy type(s) 

TYPE 1 

ENERGY TYPE: natural gas

AVG ANNUAL CONSUMPTION: 12369

UNITS: therms

PRICE PER UNIT ($): 0.630

ANNUAL DEMAND CHARGE ($): 0.00 

ESCALATION RATES BY YEAR: Escalation rates do not 

include general inflation

1995 1.55

1996 1.43

1997 1.99

1998 2.76

1999 3.25

2000 3.15

2001 3.20

2002 3.03

2003 2.66

2004 2.66

2005 2.33

2006 2.01

2007 2.16

2008 2.67

2009 3.10
17

****************************************************

* NIST BLCC ANALYSIS *

****************************************************

PART I - INITIAL ASSUMPTIONS AND COST DATA

Project name: KC1000GWW

Run date: 08-23-1995 16:14:34

Comment: KC1000 water heater case study

Input data file: KC1000GW.DAT, last modified: 08-23-1995/

16:12:33

LCC output file: KC1000GW.LCC, created: 08-23-1995

16:12:39

Study period: 15 years (1995 through 2009)

Discount rate: 4.0% Real (exclusive of general inflation) 

Run type: Federal Analysis--Energy Conservation Projects

BLCC uses end-of-year discounting convention

Initial Capital Asset Costs (not discounted)

Total Cost

Total Initial Capital Asset Costs $16,980 

Energy-Related Costs

Energy Units/ Price Demand Total

Type Year ($/Unit) Cost P.V. Cost

natural gas 12,369 $0.630 $0 $103,653

PART II - LIFE-CYCLE COST ANALYSIS

DISCOUNT RATE = 4.0% Real (exclusive of general inflation)

PROJECT NAME: KC1000GWW RUN DATE: 08-23-1995/

16:14:34

Present Annual 

Value Value

(1995 dollars) (1995 dollars)

A. cash requirements as of occupancy $16,980 $1,527

C. operating, maintenance & related costs:

annually recurring costs (non-energy) $2,780 $250

non-annually recurring costs $1,160 $104

energy costs $103,653 $9,323

subtotal $107,592 $9,677

F. residual value of capital assets ( $0) ( $0)

G. total life-cycle project cost $124,572 $11,204

****************************************************

* NIST BLCC CASH FLOW ANALYSIS *

****************************************************

PROJECT NAME: KC1000GWW

COMMENT: KC1000 water heater case study

RUN DATE: 08-23-1995 16:14:48

INPUT DATA FILE: KC1000GW.DAT, last modified 08-23-

1995/16:12:33

STUDY PERIOD: 15 years (1995 through 2009)

ANALYSIS TYPE: Federal Analysis Energy Conservation

Projects

All costs in constant 1995 dollars (i.e., excluding general 

inflation)

Initial Capital Costs

Total

Year (By Year)

1995 16980

Total: 16980

Capital Investment Costs

Init Capital Capital Capital Total Cap.

Year Investment Replacements Disposal Investment

1995 16,980 0 0 16,980

1996 0 0 0 0

1997 0 0 0 0

1998 0 0 0 0

1999 0 0 0 0

2000 0 0 0 0

2001 0 0 0 0

2002 0 0 0 0

2003 0 0 0 0

2004 0 0 0 0

2005 0 0 0 0

2006 0 0 0 0

2007 0 0 0 0

2008 0 0 0 0

2009 0 0 0 0

Total 16,980 0 0 16,980
18

Operating-Related Costs During Occupancy

-operating and maintenance costsTotal

Year An Recurring Non-An Rec Energy Oper. Cost

1995 250 0 7,913 8,163

1996 250 224 8,026 8,500

1997 250 0 8,186 8,436

1998 250 224 8,412 8,886

1999 250 0 8,686 8,936

2000 250 224 8,959 9,433

2001 250 0 9,246 9,496

2002 250 224 9,527 10,001

2003 250 0 9,780 10,030

2004 250 224 10,040 10,514

2005 250 0 10,274 10,524

2006 250 224 10,481 10,955

2007 250 0 10,708 10,958

2008 250 224 10,994 11,468

2009 250 0 11,334 11,584 

Total 3,750 1,568 142,568 147,886 

Sum of All Cash Flows 

Capital Operating Total

Year Investment Costs Cost

1995 16,980 8,163 25,143 

1996 0 8,500 8,500

1997 0 8,436 8,436

1998 0 8,886 8,886

1999 0 8,936 8,936

2000 0 9,433 9,433

2001 0 9,496 9,496

2002 0 10,001 10,001

2003 0 10,030 10,030

2004 0 10,514 10,514

2005 0 10,524 10,524

2006 0 10,955 10,955

2007 0 10,958 10,958

2008 0 11,468 11,468

2009 0 11,584 11,584

Total 16,980 147,886 164,866 
19

Appendix A.2

Building Life-Cycle Cost Analysis of Hydronic Boiler

ENERGY COST DATA:

NUMBER OF ENERGY TYPES = 1 

DOE energy price escalation rates filename: ENCOST93.RAN

DOE region (state code): 2 (WI)

DOE rate schedule type: Commercial 

DOE energy price escalation rates used with energy type(s) 

TYPE 1 

ENERGY TYPE: natural gas

AVG ANNUAL CONSUMPTION: 111146

UNITS: therms

PRICE PER UNIT ($): 0.500

ANNUAL DEMAND CHARGE ($): 0.00 

ESCALATION RATES BY YEAR: Escalation rates do not 

include general inflation

1995 1.78

1996 1.74

1997 2.42

1998 3.34

1999 3.82

2000 3.58

2001 3.63

2002 3.59

2003 3.23

2004 2.96

2005 2.57

2006 2.35

2007 2.44

2008 3.02

2009 3.51

****************************************************

* NIST BLCC INPUT DATA LISTING *

****************************************************

FILE NAME: KC1000GB

FILE LAST MODIFIED ON 12-05-1995/14:43:18

PROJECT TITLE: KC1000GWB

COMMENT: KC1000 hydronic boiler example

GENERAL DATA: 

ANALYSIS TYPE: Federal Analysis--Energy Conservation

Projects

BASE DATE FOR LCC ANALYSIS: 1995 

STUDY PERIOD: 15 years

PLANNING/CONSTRUCTION PERIOD: 0 years

OCCUPANCY DATE: 1995

DISCOUNT AND INTEREST RATES Real (exclusive of general inflation)

DISCOUNT RATE: 4.0%

CAPITAL ASSET COST DATA:

INITIAL COST ($) 105,337

EXPECTED COMPONENT LIFE(YRS) 15

RESALE VALUE FACTOR 0.00%

NUMBER OF REPLACEMENTS 0

NO REPLACEMENTS

OPERATING AND MAINTENANCE COST DATA:

ANNUAL RECUR O&M COST ($): 1,410

NON-AN RECURRING O&M COSTS ($):

YR AMOUNT

2 $510

4 $510

6 $510

8 $510 

10 $510 

12 $510 

14 $510 
20

****************************************************

* NIST BLCC ANALYSIS *

****************************************************

PART I - INITIAL ASSUMPTIONS AND COST DATA

Project name: KC1000GWB

Run date: 12-05-1995 14:43:26

Comment: KC1000 hydronic boiler example

Input data file: KC1000GB.DAT, last modified: 12-05-1995/

14:43:18

LCC output file: KC1000GB.LCC, created: 12-05-1995

14:43:24

Study period: 15 years (1995 through 2009)

Discount rate: 4.0% Real (exclusive of general inflation) 

Run type: Federal Analysis--Energy Conservation Projects

BLCC uses end-of-year discounting convention

Initial Capital Asset Costs (not discounted)

Total Cost

Total Initial Capital Asset Costs $105,337 

Energy-Related Costs

Energy Units/ Price Demand Total

Type Year ($/Unit) Cost P.V. Cost

natural gas 111,146 $0.500 $0 $762,701

PART II - LIFE-CYCLE COST ANALYSIS

DISCOUNT RATE = 4.0% Real (exclusive of general inflation)

PROJECT NAME: KC1000GWB RUN DATE: 12-05-

1995/12:05:95

Present Annual 

Value Value

(1995 dollars) (1995 dollars)

A. cash requirements as of occupancy $105,337 $9,474

C. operating, maintenance & related costs:

annually recurring costs (non-energy) $15,677 $1,410

non-annually recurring costs $2,641 $238

energy costs $762,701 $68,598

subtotal $781,018 $70,246

F. residual value of capital assets ( $0) ( $0)

G. total life-cycle project cost $886,355 $79,720

****************************************************

* NIST BLCC CASH FLOW ANALYSIS *

****************************************************

PROJECT NAME: KC1000GWB

COMMENT: KC1000 hydronic boiler example

RUN DATE: 12-05-1995 14:54:05

INPUT DATA FILE: KC1000GWB.DAT, last modified 

12-05-1995/14:43:18

STUDY PERIOD: 15 years (1995 through 2009)

ANALYSIS TYPE: Federal Analysis Energy Conservation

Projects

All costs in constant 1995 dollars (i.e., excluding general 

inflation)

Initial Capital Costs

Total

Year (By Year)

1995 105337

Total: 105337

Capital Investment Costs

Init Capital Capital Capital Total Cap.

Year Investment Replacements Disposal Investment

1995 105,337 0 0 105,337

1996 0 0 0 0

1997 0 0 0 0

1998 0 0 0 0

1999 0 0 0 0

2000 0 0 0 0

2001 0 0 0 0

2002 0 0 0 0

2003 0 0 0 0

2004 0 0 0 0

2005 0 0 0 0

2006 0 0 0 0

2007 0 0 0 0

2008 0 0 0 0

2009 0 0 0 0

Total 105,337 0 0 105,337
21

Operating-Related Costs During Occupancy

-operating and maintenance costsTotal

Year An Recurring Non-An Rec Energy Oper. Cost

1995 1,410 0 56,563 57,973

1996 1,410 510 57,548 59,468

1997 1,410 0 58,940 60,350

1998 1,410 510 60,907 62,827

1999 1,410 0 63,233 64,643

2000 1,410 510 65,497 67,417

2001 1,410 0 67,877 69,287

2002 1,410 510 70,317 72,237

2003 1,410 0 72,585 73,995

2004 1,410 510 74,733 76,653

2005 1,410 0 76,653 78,063

2006 1,410 510 78,452 80,372

2007 1,410 0 80,369 81,779

2008 1,410 510 82,800 84,720

2009 1,410 0 85,706 87,116 

Total 21,150 3,570 1,052,178 1,076,898

Sum of All Cash Flows 

Capital Operating Total

Year Investment Costs Cost

1995 105,337 57,973 163,310 

1996 0 59,468 59,468

1997 0 60,350 60,350

1998 0 62,827 62,827

1999 0 64,643 64,643

2000 0 67,417 67,417

2001 0 69,287 69,287

2002 0 72,237 72,237

2003 0 73,995 73,995

2004 0 76,653 76,653

2005 0 78,063 78,063

2006 0 80,372 80,372

2007 0 81,779 81,779

2008 0 84,720 84,720

2009 0 87,116 87,116

Total 105,337 1,076,898 1,182,235
22

***********************************************************************************************************

* NIST BLCC COMPARATIVE ECONOMIC ANALYSIS *

***********************************************************************************************************

BASE CASE: CNVHYDGB

ALTERNATIVE: KC1000GWB

Principal Study Parameters

ANALYSIS TYPE: Federal Analysis Energy Conservation Projects

STUDY PERIOD: 15 years (1995 through 2009)

DISCOUNT RATE: 4.0% Real (exclusive of general inflation)

BASE CASE LCC FILE: CNVHYDGB.LCC

ALTERNATIVE LCC FILE: KC1000GB.LCC

Comparison of Present-Value Costs

Base Case: Alternative Savings

Initial Investment Item(s): CNVHYDGB KC1000GWB From Alt..

Cash Requirements as of Occupancy $75,000 $105,337 -$30,337

Subototal $75,000 $105,337 -$30,337

Future Cost Items:

Annual and Non-An. Recurring Costs $18,318 $18,318 $0

Energy Expenditures $1,211,320 $762,701 $448,620

Subtotal $1,229,638 $781,018 $448,620

Total P.V. Life-Cycle Cost $1,304,638 $886,335 $418,283

NET SAVINGS FROM PROJECT KC1000GWB COMPARED TO PROJECT CNVHYDGB

Net Savings = P.V. of non-investment savings $448,620

- Increased total investment $30,337

Net Savings: $418,283

SAVINGS-TO-INVESTMENT RATIO (SIR)

FOR PROJECT KC1000GWB COMPARED TO PROJECT CNVHYDGB

P.V. of non-investment savings

SIR = = 14.79

Increased total investment

ADJUSTED INTERNAL RATE OF RETURN (AIRR)

FOR PROJECT KC1000GWB COMPARED TO PROJECT CNVHYDGB

(Reinvestment rate = 4.00%; Study period = 15 years)

AIRR = 24.46%

Note: the NS, SIR, and AIRR computations include differential capital replacement costs and resale value (if any) as investment

costs, per NIST Handbook 135 (FEMP analysis only).
23

Appendix B

Water Heater Life Cycle Cost Analysis Summary

Energy Conservation Investment Program

If this project had been for a Department of Defense installation, it might have been funded as part of the Energy Conservation 

Investment Program (ECIP). The life-cycle cost analysis for each element of an ECIP proposal is required in the standard format

shown here. Other federal agencies have similar life-cycle cost documentation requirements.

Location: Census Region 1 Project No. 1

Project Title: Case Study for Federal Technology Alert Fiscal Year 1995 

Discrete Portion Name: Modulating/Condensing Water Heater

Analysis Date: 08/23/95 Economic Life: 15 years Preparer: Richard Murphy 

1. Investment Costs:

A. Construction Cost $ 16,980

B. SIOH $ 0

C. Design Cost $ 0

D. Total Cost (1A+1B+1C) $ 16,980

E. Salvage Value of Existing Equipment $ 14,000

F. Public Utility Company Rebate $ 0

G. Total Investment (1D-1E-1F) $ 2,980

2. Energy Savings (+) / Cost (-):

Date of NISTIR 85-3273-X Used for Discount Factors FY 1993

Energy Cost Savings Annual $ Discount Discounted

Source $/MBtu MBtu/yr Savings Factor Savings

(1) (2) (3) (4) (5)

A. ELEC

B. DIST

C. RESID

D. NG $6.30 329.8 $2,078 13.30 $27,638

E. PPG

F. COAL

G. SOLAR

H. GEOTH

I. BIOMA

J. REFUS

K. WIND

L. OTHER

M. DEMAND 

SAVINGS $6.30 329.8 $2,078 13.30 $27,638

N. TOTAL

3. Non Energy Savings (+) or Cost (-):

A. Annual Recurring (+/-) $ 0

(1) Discount Factor (Table A) 11.12

(2) Discounted Savings/Cost (3A x 3A1) $ 0

B. Non Recurring Savings (+) or Cost (-)

Item Savings (+) Year of Discount Discounted Savings (+)

Cost (-) Occur. Factor Cost (-)

(1) (2) (3) (4)

a. $ $

b.

c. Total $ $ 0

C. Total Non Energy Discounted Savings (3A2+3Bc4) $ 0

4. Simple Payback 1G/[2N3+3A+(3Bc1/Economic Life)]: 1.43 years

5. Total Net Discounted Savings (2N5+3C): $ 27,638

6. Savings to Investment Ratio (SIR) 5/1G: 9.27

7. Adjusted Internal Rate of Return (AIRR): 20.65%
24

Appendix C

Sample Specification for Modulating/Condensing Water Heating Plant

Water Heating Plant

Furnish and install as shown on plans, in accordance with all codes and authorities having jurisdiction, a modulating/condensing

water heating plant consisting of Model KC-1000 Style 210711 (as manufactured by Aerco International, Inc.) or approved equivalent

unit. The plant shall be UL/FM-approved and have a minimum gross output of 930,000 Btu/h with an input of 1,000,000 Btu/h when

fueled with natural gas. The plant shall operate with a minimum ANSI Z-21 efficiency of 93% and a minimum recovery capacity of

1,265 gallons per hour at an 85¡F temperature rise.

Construction

The heating unit shall be of natural gas-fueled, condensing fire-tube design with a modulating power burner and positive pressure

discharge. The heating unit burner shall be capable of a minimum 14:1 turndown of firing rate without loss of combustion efficiency.

The heating unit heat exchanger/combustion chamber configuration shall incorporate a helical fire-tube design that will be selfsupporting, baffle-free, and warranted to withstand thermal shock. The heat exchanger shall be ASME-stamped for a working

pressure not less than 160 psig. The unit shall have an ASME-approved temperature/pressure relief valve with a setting of 150 psig.

The exhaust manifold shall be of corrosion-resistant porcelain-enameled cast iron with a 6" diameter flue connection. The exhaust

manifold shall have a gravity drain for the elimination of condensation with a collecting reservoir.

The flame monitoring system shall incorporate a UL-recognized combustion safeguard system utilizing interrupted direct spark 

ignition and a rectification-type flame sensor. An electro-hydraulic double-seated safety shutoff valve shall be an inherent part of the

gas train.

The heating unit shall incorporate electric probe-type low-water cutoff and dual over-temperature protection including a manual

reset in accordance with the ASME Boiler and Pressure Vessel Code (Section IV) and CSD-1. Remote fault alarm contacts, sensor

failure detection, and auxiliary contacts shall be standard equipment. The heating unit shall operate on single-phase 120-V/60-Hz

electrical service.

Installation

All installation aspects of the water heater plant shall be in strict accordance with manufacturer s instructions. Materials shall

conform with all manufacturer s recommendations and shall include an AL-29-4C stainless steel UL-listed positive pressure vent 

system. Water heater piping shall be field-constructed of materials as specified. The water heater shall have individually isolating

shutoff valves for service and maintenance and a supply hose connection for field testing.

Mode of Operation

The heating unit shall include integral factory-wired operating controls to govern all operations and energy input. Regulation of

discharge water temperature shall be through an internal setpoint with a field adjustment of 100¡F to 200¡F. The heating unit shall

maintain discharge temperature within the specified range through domestic water flow variations from 0% to 100%.

The heating unit shall be capable of maintaining the outlet temperature within an accuracy of –4¡F. This shall be accomplished by

modulation of firing rate from 100% to 7% of rated input. The heating unit shall operate with an inverse efficiency curve, with known

part load value efficiencies. Maximum efficiency shall be achieved at minimum firing input.

Warranty

The pressure vessel of the heating unit shall carry an unconditional ten-year warranty against leakage due to defective materials 

or workmanship. The heat exchanger tubes/combustion chamber assembly shall be warranted against failure due to thermal stress or

corrosion for a five-year period. A warranty certificate shall be issued to the owner from the manufacturer, and a copy of the warranty

shall be submitted for the approval of the cognizant engineer.

Field Services

The contractor shall provide the services of a local factory-authorized representative to supervise all phases of equipment startup.

A letter of compliance with all factory recommendations and installation instructions shall be submitted to the cognizant engineer with

operation and maintenance instructions.
25

Appendix D

Hydronic Boiler System Life Cycle Cost Analysis 

Summary Energy Conservation Investment Program

If this project had been for a Department of Defense installation, it might have been funded as part of the Energy Conservation

Investment Program (ECIP). The life-cycle cost analysis for each element of an ECIP proposal is required in the standard format

shown here. Other federal agencies have similar life-cycle cost documentation requirements.

Location: Census Region 2 Project No. 2 

Project Title: Case Study for Federal Technology Alert Fiscal Year 1995 

Discrete Portion Name: Modulating/Condensing Hydronic Boiler System

Analysis Date: 08/23/95 Economic Life: 15 years Preparer: Richard Murphy 

1. Investment Costs:

A. Construction Cost $ 105,337

B. SIOH $ 0

C. Design Cost $ 0

D. Total Cost (1A+1B+1C) $ 105,337

E. Salvage Value of Existing Equipment $ 75,000

F. Public Utility Company Rebate $ 0

G. Total Investment (1D-1E-1F) $ 30,337

2. Energy Savings (+) / Cost (-):

Date of NISTIR 85-3273-X Used for Discount Factors FY 1993

Energy Cost Savings Annual $ Discount Discounted

Source $/MBtu MBtu/yr Savings Factor Savings

(1) (2) (3) (4) (5)

A. ELEC

B. DIST

C. RESID

D. NG $5.00 6,537.6 $32,688 13.72 $448,620

E. PPG

F. COAL

G. SOLAR

H. GEOTH

I. BIOMA

J. REFUS

K. WIND

L. OTHER

M. DEMAND 

SAVINGS 6,537.6 $32,688 $448,620

N. TOTAL

3. Non Energy Savings (+) or Cost (-):

A. Annual Recurring (+/-) $ 0

(1) Discount Factor (Table A) 11.12

(2) Discounted Savings/Cost (3A x 3A1) $ 0

B. Non Recurring Savings (+) or Cost (-)

Item Savings (+) Year of Discount Discounted Savings (+)

Cost (-) Occur. Factor Cost (-)

(1) (2) (3) (4)

a. $ $

b.

c. Total $ $ 0

C. Total Non Energy Discounted Savings (3A2+3Bc4) $ 0

4. Simple Payback 1G/[2N3+3A+(3Bc1/Economic Life)]: 0.93 years

5. Total Net Discounted Savings (2N5+3C): $ 448,620

6. Savings to Investment Ratio (SIR) 5/1G: 14.79

7. Adjusted Internal Rate of Return (AIRR): 24.46%
26

Appendix E

Sample Specification for

Modulating/Condensing Hydronic Boiler Heating Plant

Multiple Boiler Heating Plant

Furnish and install as shown on plans, in accordance with all codes and authorities having jurisdiction, a modulating/condensing

hydronic boiler heating plant consisting of Model KC1000-6 (six multiple boilers, Model KC-1000 as manufactured by Aerco

International, Inc.) or approved equivalent. The plant shall be UL/FM-approved and have a minimum combined gross output of

5,000,000 Btu/h with an input of 5,774,000 Btu/h. The plant shall operate with a minimum of 86.6% efficiency at design conditions

when fueled with natural gas.

Boiler Construction

Boiler modules shall be of natural gas-fueled, condensing fire-tube design with modulating power burner and positive pressure 

discharge. Each boiler module shall be capable of a minimum 14:1 turndown of firing rate without loss of combustion efficiency. The

boiler module heat exchanger/combustion chamber configuration shall incorporate a helical fire-tube design that will be self-supporting,

baffle-free, and warranted to withstand thermal shock. Each heat exchanger module shall be ASME-stamped for a working pressure

not less than 150 psig. Each boiler module shall have an ASME-approved relief valve with a setting of 150 psig. Each boiler module

exhaust manifold shall be of corrosion-resistant porcelain-enameled cast iron, with a 6" diameter flue connection. Each boiler exhaust

manifold shall have a gravity drain for the elimination of condensation with a collecting reservoir.

Each boiler module s flame monitoring system shall incorporate a UL-recognized combustion safeguard system utilizing interrupted

direct spark ignition and a rectification-type flame sensor. An electro-hydraulic double-seated safety shutoff valve shall be an inherent

part of each boiler module gas train.

Each boiler module shall incorporate electric probe-type low-water cutoff and dual over-temperature protection including a manual

reset in accordance with the ASME Boiler and Pressure Vessel Code (Section IV) and CSD-1. Remote fault alarm contacts, sensor 

failure detection, and auxiliary contacts shall be standard equipment. The heating plant shall operate on single-phase 120-V/60-Hz 

electrical service.

Installation

All installation aspects of the hydronic boiler heating plant shall be in strict accordance with manufacturer s instructions. Materials shall conform with all manufacturer s recommendations and shall include an AL-29-4C stainless steel UL-listed positive pressure

vent system. Boiler plant piping shall be field-constructed of materials as specified. Each boiler module shall have individually isolating shutoff valves for service and maintenance.

Mode of Operation

The boiler manufacturer shall supply as part of the boiler package a completely integrated boiler management system consisting of

Model 168 (as manufactured by Aerco International, Inc.) or approved equivalent to control all operation and energy input of the 

heating plant. The system shall comprise a microprocessor-based control unit utilizing pulse width modulation to accommodate either

parallel firing of all modules or sequential staging of modules with bumpless energy transfer at adjustable firing rates to track changing

heating demands. The controller shall have the ability to vary each individual module input throughout its full range to maximize the

condensing capability of the module and the entire plant without header temperature swings. The controller shall be of the proportional

integral derivative type for accurate temperature control with excellent frequency response. The boiler management system shall provide

contact closure for automatic plant activation at an adjustable outdoor temperature setpoint and contact closure for auxiliary equipment

such as pumps and combustion air dampers.

The boiler management system shall operate on an adjustable inverse ratio in response to outdoor temperature to control the main

header temperature outlet to –2¡F. Each boiler module shall operate with an inverse efficiency curve, with known part load value

efficiencies. Maximum efficiency shall be achieved at minimum firing input. Reset ratio shall be fully field adjustable from 0.3 to 3.0

in operation. The controller shall have a liquid crystal display for monitoring of all sensors and interlocks. Non-volatile backup of all

control setpoints shall be internally provided with a communication interface for monitoring by building management computer. The

controller shall automatically balance operating time on each module by a first-on/first-off sequence with random lead module selection

and shall provide for setback and remote alarm contacts. Connection between the boiler management system and the individual 

modules shall be twisted-pair low-voltage field wiring to internal terminal strips for easy installation.
27

Warranty

The pressure vessel of each boiler module shall carry an unconditional ten-year warranty against leakage due to defective materials 

or workmanship. The heat exchanger tubes/combustion chamber assemblies shall be warranted against failure due to thermal stress or

corrosion for a five-year period. A warranty certificate shall be issued to the owner from the manufacturer, and a copy of the warranty

shall be submitted for the approval of the cognizant engineer.

Field Services

The contractor shall provide the services of a local factory-authorized representative to supervise all phases of equipment startup.

A letter of compliance with all factory recommendations and installation instructions shall be submitted to the cognizant engineer with

operation and maintenance instructions.
28

Appendix F

Federal Life-Cycle Costing Procedures and the BLCC Software

Federal agencies are required to evaluate energy-related investments on the basis of minimum life-cycle costs (10 CFR Part 436).

A life-cycle cost evaluation computes the total long-run costs of a number of potential actions, and selects the action that minimizes

the long-run costs. When considering retrofits, sticking with the existing equipment is one potential action, often called the baseline

condition. The life-cycle cost (LCC) of a potential investment is the present value of all of the costs associated with the investment

over time. 

The first step in calculating the LCC is the identification of the costs. Installed Cost includes cost of materials purchased and the

labor required to install them (for example, the price of an energy-efficient lighting fixture, plus cost of labor to install it). Energy

Cost includes annual expenditures on energy to operate equipment. (For example, a lighting fixture that draws 100 watts and operates

2,000 hours annually requires 200,000 watt-hours (200 kWh) annually. At an electricity price of $0.10 per kWh, this fixture has an

annual energy cost of $20.) Nonfuel Operations and Maintenance includes annual expenditures on parts and activities required to

operate equipment (for example, replacing burned out light bulbs). Replacement Costs include expenditures to replace equipment

upon failure (for example, replacing an oil furnace when it is no longer usable).

Because LCC includes the cost of money, periodic and aperiodic maintenance (O&M) and equipment replacement costs, energy

escalation rates, and salvage value, it is usually expressed as a present value, which is evaluated by 

LCC = PV(IC) + PV(EC) + PV(OM) + PV(REP)

where PV(x) denotes “present value of cost stream x,”

IC is the installed cost,

EC is the annual energy cost,

OM is the annual nonenergy O&M cost, and

REP is the future replacement cost.

Net present value (NPV) is the difference between the LCCs of two investment alternatives, e.g., the LCC of an energy-saving or

energy-cost-reducing alternative and the LCC of the existing, or baseline, equipment. If the alternative’s LCC is less than the 

baseline’s LCC, the alternative is said to have a positive NPV, i.e., it is cost-effective. NPV is thus given by

NPV = PV(EC0) – PV(EC1)) + PV(OM0) – PV(OM1)) + PV(REP0) – PV(REP1)) – PV(IC)

or 

NPV = PV(ECS) + PV(OMS) + PV(REPS) – PV(IC)

where subscript 0 denotes the existing or baseline condition,

subscript 1 denotes the energy cost saving measure,

IC is the installation cost of the alternative (note that the IC of the baseline is assumed zero),

ECS is the annual energy cost savings,

OMS is the annual nonenergy O&M savings, and

REPS is the future replacement savings.

Levelized energy cost (LEC) is the break-even energy price (blended) at which a conservation, efficiency, renewable, or fuelswitching measure becomes cost-effective (NPV >= 0). Thus, a project’s LEC is given by

PV(LEC*EUS) = PV(OMS) + PV(REPS) – PV(IC)

where EUS is the annual energy use savings (energy units/yr). Savings-to-investment ratio (SIR) is the total (PV) savings of a

measure divided by its installation cost:

SIR = (PV(ECS) + PV(OMS) + PV(REPS))/PV(IC).

Some of the tedious effort of life-cycle cost calculations can be avoided by using the Building Life-Cycle Cost software, BLCC,

developed by NIST. For copies of BLCC, call the FEMP Help Desk at (800) 363-3732.
Federal Energy Management Program

The Federal Government is the largest energy consumer in the nation. Annually, in its 500,000 buildings and 8,000 locations worldwide,

it uses nearly two quadrillion Btu (quads) of energy, costing over $8 billion. This represents 2.5% of all primary energy consumption in

the United States. The Federal Energy Management Program was established in 1974 to provide direction, guidance, and assistance to

Federal agencies in planning and implementing energy management programs that will improve the energy efficiency and fuel flexibility 

of the Federal infrastructure.

Over the years several Federal laws and Executive Orders have shaped FEMP's mission. These include the Energy Policy and Conservation

Act of 1975; the National Energy Conservation and Policy Act of 1978; the Federal Energy Management Improvement Act of 1988; and,

most recently, Executive Order 12759 in 1991, the National Energy Policy Act of 1992 (EPACT), and Executive Order 12902 in 1994.

FEMP is currently involved in a wide range of energy-assessment activities, including conducting New Technology Demonstrations, to

hasten the penetration of energy-efficient technologies into the Federal marketplace.

This report was sponsored by the United States Government. Neither the United States nor any agency or contractor thereof, nor any of

their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness,

or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned

rights. Reference herein to any specific commercial product, process, or service by trade name, mark, manufacturer, or otherwise, does

not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government or any agency or

contractor thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States

Government or any agency or contractor thereof.

About the Federal Technology Alerts

The Energy Policy Act of 1992, and

subsequent Executive Orders, mandate

that energy consumption in the Federal

sector be reduced by 30% from 1985

levels by the year 2005. To achieve this

goal, the U.S. Department of Energy’s

Federal Energy Management Program

(FEMP) is sponsoring a series of programs to reduce energy consumption at

Federal installations nationwide. One 

of these programs, the New Technology

Demonstration Program (NTDP), is

tasked to accelerate the introduction of

energy-efficient and renewable technologies into the Federal sector and to

improve the rate of technology transfer.

As part of this effort FEMP is sponsoring a series of Federal Technology

Alerts that provide summary information

on candidate energy-saving technologies

developed and manufactured in the

United States. The technologies featured in the Technology Alerts have 

already entered the market and have

some experience but are not in general

use in the Federal sector. Based on

their potential for energy, cost, and 

environmental benefits to the Federal

sector, the technologies are considered

to be leading candidates for immediate

Federal application.

The goal of the Technology Alerts is

to improve the rate of technology transfer of new energy-saving technologies

within the Federal sector and to provide

the right people in the field with accurate,

up-to-date information on the new technologies so that they can make educated

judgments on whether the technologies

are suitable for their Federal sites.

Because the Technology Alerts are

cost-effective and timely to produce

(compared with awaiting the results 

of field demonstrations), they meet the

short-term need of disseminating information to a target audience in a timeframe that allows the rapid deployment

of the technologies—and ultimately 

the saving of energy in the Federal 

sector.

The information in the Technology

Alerts typically includes a description

of the candidate technology; the results

of its screening tests; a description 

of its performance, applications and

field experience to date; a list of potential suppliers; and important contact

information. Attached appendixes 

provide supplemental information and

example worksheets on the technology.

FEMP sponsors publication of the

Federal Technology Alerts to facilitate

information-sharing between manufacturers and government staff. While 

the technology featured promises significant Federal-sector savings, the

Technology Alerts do not constitute

FEMP’s endorsement of a particular

product, as FEMP has not independently verified performance data provided by manufacturers. Nor do the

Federal Technology Alerts attempt to

chart market activity vis-a-vis the technology featured. Readers should note

the publication date on the back cover,

and consider the Alert as an accurate

picture of the technology and its performance at the time of publication.

Product innovations and the entrance 

of new manufacturers or suppliers

should be anticipated since the date 

of publication. FEMP encourages interested Federal energy and facility managers to contact the manufacturers and

other Federal sites directly, and to use

the worksheets in the Technology Alerts

to aid in their purchasing decisions.
For More Information

FEMP Help Desk

(800) 363-3732

International callers please use (703) 287-8391

Web site: http://www.eren.doe.gov/femp/

General Contacts

Ted Collins

New Technology Demonstration Program

Program Manager

Federal Energy Management Program

U.S. Department of Energy

1000 Independence Avenue, SW, EE-92

Washington, DC 20585

(202) 586-8017

Fax: (202) 586-3000

theodore.collins@hq.doe.gov

Steven A. Parker

Pacific Northwest National Laboratory

P.O. Box 999, MSIN: K5-08

Richland, Washington 99352

(509) 375-6366

Fax: (509) 375-3614

steven.parker@pnl.gov

Technical Contact

Richard W. Murphy

Oak Ridge National Laboratory

P.O. Box 2008, Building 3147

Oak Ridge, TN 37831-6070

(423) 576-7772

Fax: (423) 574-9331

rim@ornl.gov

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of Energy by the Oak Ridge 

National Laboratory 

DOE/EE-0171

June 1998

Printed with a renewable-source ink on 

paper containing at least 50% wastepaper,

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