Attractive NPVs, payback periods, and SIRs typically fall within certain ranges, which should always be positive. However, negative values are possible in a couple of instances and do not necessarily indicate an error. The first possibility is that the project is recommended for a technology or building component you identified as "replacement required". As such, FEDS will recommend the most cost-effective replacement option, but not require that it be cost effective. So, while it may be the best replacement option, it may exhibit seemingly nonsensical economic figures of merit. Similarly, if a building retrofit occurs due to central plant or thermal loop abandonment, it may also exhibit negative savings criteria. That simply means that the retrofit (e.g., replacing central steam service with an in-building boiler) was not cost effective when looking just at the building energy use and costs. But the value of abandoning the central plant and/or distribution loop (due to the accompanying reductions in thermal losses and O&M costs) provided a net positive gain when added to the negative savings at the building level. Thus, at the site level, taking the central plant and thermal loop savings into account, the net benefit is positive—but purely from the building perspective (reflected in the TXD and CSV reports) the change from steam to dedicated boiler was not cost effective. Reviewing the central plant and thermal loops section of the TXS report and looking for a positive abandonment value will provide additional detail on just how much of a net positive gain accrues do the abandoning the plant and/or loop.
What does a negative NPV, Payback, or SIR mean? (2024)
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