To Repair, or Replace? That is the question.
You are a property manager, and you have all your tenants happy, and your building is healthy. You are having a great day, and its Friday! Then the calls come in, no A/C, but not from just one tenant, but all of them. Oh no. You, being the on-point property manager that you are, call your mechanical contractor to come out and fix your system, and it’s the end of the workday, so overtime charges are expected.
Now the bad news. Your chiller was installed 18 years ago, and the compressor on your unit has failed. The service tech tells you that the unit failed because of the coil corrosion that comes with being close to the ocean (amazingly, salt and metal don't mix well), and yours will have to be replaced. So, you have a buildings HVAC system down, unhappy tenants, and the fix is unknown, and not immediate. Time to go home.
Monday morning comes, and your email server has crashed because of all the complaints. The phone rings, and it is the project estimator from your mechanical contractor. The news isn't good.
Major chiller components are very pricey, as in, do I buy a car, or a coil pricey, and that doesn't include the crane to get this 600lbs behemoth onto the roof, or the labor to put it in. But it is still cheaper than a direct replacement. There is our problem.
Too often the decision is made to repair a machine rather than replace, without the full picture being considered. TCO anyone? Here are some things to consider:
1. How old is the unit?
This is important for many reasons, but let’s focus on the big one. R22 refrigerant isn’t cheap, and the price is rising as the EPA phases this gas out. None of the refrigerant in a system with burnt windings or leaks can be re-used (unless recycled, but that is a rare market, and adds time to the job), and currently R22 goes for around $50 per lbs., and some chillers can take an enormous amount to refill.
2. Do you have untreated chilled water?
How many property managers know to have chemical treatment added periodically to their systems? That little detail slips through the cracks often, and depending on how old the building is, the chilled water is going to be as appealing as an old pool. Stagnated water is a huge problem, because it eats through piping, components, and heat exchangers (chillers have these).
3. What is your energy bill?
I recently completed an energy survey on a chiller installed in 2000 and found that it was costing the site roughly $120,000 to operate on an annual basis. That’s not going to go down either, with the continual rise in energy rates. Compared to the significantly lower $95,000 per/annum bill to operate the proposed replacement of the same tonnage, the payback is almost always there.
If you can, don’t throw good money after bad. Saving a few bucks now, just to spend it later, just doesn’t make sense if you have the means.
As always, if you have questions regarding mechanical systems. Feel free to contact me at william@pmccontracting.com. Happy contracting!
I agree with you Joseph. A chiller of this tonnage should be properly maintained and documented through that process. As part of the ongoing maintenance program, the best practice would be to gather critical operating data and log those results. The trends inside that information can be used very effectively to predict the right time to replace the chiller. prior to a catastrophic failure.
Chillers just down go down if they are maintained properly. If this Property Manager waited for this catastrophic failure to happen he should start to look for another job and let the decision to replace or repair go to someone who can better make that shot call. This should have been a planned change out and not unplanned.
Curious that with all the technology in buildings the HVAC industry most engineers still use antiquated replacement indicators like age and lump sum utility bills to validate costs. HVAC equipment in buildings can have vastly different wear rates than ASHRAE averages pending space usage, occupancy, weather, etc. What if you could tell actual equipment operational degradation real-time without any energy sub-metering? What if you knew real-time payback based on degradation and estimated Replacement Asset Value (RAV)? I think it takes much more granular insights to generate true, actionable intelligence where a non-technical decision maker can take action to prevent excessive operational losses.
Better replaced new