Life Cycle Costing (LCC) is an essential tool for evaluating the total cost of ownership of buildings, materials, and construction methods.
Unlike traditional cost analysis, which focuses on initial capital expenses, LCC encompasses all costs associated with a project throughout its entire lifecycle. This includes acquisition, operation, maintenance and disposal costs, providing a comprehensive view of a project’s financial performance.
Why Life Cycle Costing Matters
LCC offers a detailed financial analysis that covers all project costs from inception to disposal, ensuring better financial planning and management. It enhances decision-making by revealing the total cost of ownership, allowing stakeholders to choose options that provide greater long-term value and savings.
Moreover, LCC optimises budget allocation by identifying high-cost areas and supports sustainability by promoting the selection of cost-effective, resource-efficient materials and systems. It also helps manage financial risks, ensures regulatory compliance, and increases asset value by making properties more attractive to buyers and investors.
For projects seeking BREEAM certification, LCC can contribute valuable credits and demonstrate a commitment to financial and environmental sustainability.
Life Cycle Costing in BREEAM
The BREEAM UK New Construction 2018 guidelines highlight the importance of LCC through specific credits aimed at promoting financial sustainability and effective cost management. The Man 02 credit specifically addresses LCC and Service Life Planning, requiring a thorough analysis of a building’s costs over its lifespan.
For projects seeking BREEAM certification, carrying out an LCC at the appropriate stages can significantly contribute to the overall score, making it a crucial component of the certification process.
Our Life Cycle Costing Process
At Build Energy, we guide you through the LCC process, providing the necessary reports and calculations for your BREEAM assessor. Using approved software tools, we help you secure early credits during the concept design and pre-planning stages and revisit the LCC at the technical design stage. Our team collaborates with yours to identify cost-saving opportunities that enhance the project’s financial performance.
BREEAM credits under Man 02 are awarded as follows:
- Elemental LCC Plan: At concept design (RIBA Stage 2) – 2 credits
- Component Level LCC Plan: Before technical design (RIBA Stage 4) – 1 credit
- Capital Replacement Costs: Providing a schedule for 5, 10, and 20 years – 1 credit
Credits can also be gained under Mat 01 for aligning LCC with Life Cycle Assessment.
Stages of LCC
The LCC process is divided into four main phases:
- Goal and Scope Definition: Establishing the objectives and boundaries of the costing analysis.
- Inventory Analysis: Collecting data on the costs associated with the assessed product or construction method.
- Cost Assessment: Evaluating the financial impacts using various cost categories.
- Interpretation: Reviewing the results and drawing conclusions about the product’s or method’s financial performance.
Benefits of LCC
LCC provides numerous advantages, including:
- Identifying Cost-Saving Opportunities: Highlighting stages with the greatest costs to make more economical choices.
- Comparing Options: Assessing the financial impacts of different designs, materials, and processes to choose the most cost-effective option.
- Meeting Regulatory Requirements: Ensuring compliance with regulations that mandate Life Cycle Costing for certain building types or materials.
LCC in the UK
In the UK, LCC is gaining traction among developers and designers, driven by the demand for financially sustainable buildings. BREEAM, the most widely used rating scheme, incorporates LCC into its criteria, and local authorities are recognising the value of comprehensive cost analysis.
The Greater London Authority (GLA) encourages Whole Life Cost Assessments for major developments, considering both initial and long-term costs.
The Green Building Council’s Net Zero Whole Life Cost Roadmap provides a clear trajectory for the industry and government towards financially sustainable and net zero future.
Partner with Build Energy for Your Project
Ready to integrate LCC into your project? Contact us today on 0330 055 34 05 or email us at be@buildenergy.co.uk. Our expert consultants are here to help you achieve your financial sustainability goals and secure essential BREEAM credits.