Life cycle costs

Life cycle costs and what you should consider

Life cycle costs (LCC) are the sum of all costs that products incur during their entire life cycle, i.e. over their entire service life. With the help of life cycle costing, products can be compared in terms of their cost-effectiveness, taking into account all relevant costs.

When analysing the life cycle costs of a building, in addition to the planning costs and construction costs, which are made up of investment and financing costs, the life cycle costs of the property are also taken into account.

and financing costs, the utilisation costs for the operation of the property, including renovation, renewal, conversion, demolition, dismantling and recycling, are also included in the calculation. The costs to be assessed are derived from DIN 276 "Costs in the construction industry". In many cases, buildings that are planned and realised under the aspects of ecology and sustainability prove to be the most economical option - even with higher construction costs.

Save life cycle costs with modular construction from ALHO

When assessing the sustainability of a building according to the DGNB, which ALHO bases its considerations on, the aspect of "building-related life cycle costs" plays a key role. Minimising life cycle costs (LCC) is a primary sustainability objective. By definition, the cost groups "300 Building - building construction" and "400 Building - technical installations" from DIN 276 are considered in the LCC analysis.

These two cost groups form the basis for a very detailed and objective analysis of the planning, financing, construction, utilisation, renovation and demolition costs incurred during the building life cycle. In the LCC analysis, the investment and operating costs are precisely determined and calculated over a period of 50 years. The following analysis compares the life cycle costs of a modular building with those of a conventionally constructed building.

49% lower planning costs, 50% lower financing costs

Thanks to the modular system structure and standardised production processes as well as the well-organised planning process, planning costs have been reduced by 49 percent. Thanks to the high degree of prefabrication of the modules, the ALHO modular construction method enables an enormously short construction time. On the one hand, this allows the financing period to be shortened accordingly.

Shorter financing periods have a positive effect on the interest incurred. On the other hand, the properties can be put into operation or let more quickly. The savings in financing costs are 50.6 per cent compared to the standard construction method. The construction costs for the ALHO modular building are 11.4 per cent lower than for the standard construction method.

Advantages for conversion and demolition

The sophisticated steel construction of the individual modules greatly increases the flexibility and the ability to convert the entire building. This means that, compared to standard construction methods, cost-effective conversion and renovation can be realised at any time.

A further advantage of ALHO modular construction is the design of the individual modules and the possibility of mechanically connecting them together. These factors lead to the cost-effective dismantling of the building. As a result, demolition costs can be reduced by 13.8 per cent compared to standard construction. Furthermore, the structural elements of a module can be recycled in a targeted manner and thus make a positive contribution to the recycling and reutilisation of building materials in terms of the material cycle.

Overall, the ALHO modular construction method generates around 12 per cent lower life cycle costs over the entire life cycle than the standard construction method. The results of the LCC analysis prove that an investment in a sustainable ALHO modular building is also a sustainable decision for economy and ecology in the long term.

Half of the energy balance is grey energy

The German government's measures for the 2030 climate protection programme, which affect the building sector, fall far too short: they define the optimum energy efficiency of a building for CO2 reduction solely for its operation. However, the production of building materials and the construction and dismantling of a building consume large amounts of energy. This is referred to as "grey energy" and accounts for almost half of a building's energy balance over its life cycle. The construction industry is responsible for the consumption of 30 to 40 per cent of primary energy and 40 to 50 per cent of raw materials worldwide. The higher the proportion of grey energy, the higher the total energy load of a building. There is therefore great potential for environmentally friendly and cost-efficient construction in reducing grey energy.

Depending on the type of building and building energy standard, construction methods with a low use of grey energy can reduce CO2 emissions for construction by around 40 to 60 percent. By choosing low-emission building materials with a high recycling rate, such as steel, and the type of building construction, the proportion of grey energy can be significantly reduced.

Modular construction can claim systemic advantages in terms of grey energy! This is because modular construction can reduce negative environmental and climate impacts caused by the production and disposal of building materials through several factors. Right from the planning stage, the focus is on conserving resources. This is due to the modular system structure of the buildings. However, a great deal of grey energy is also saved as early as the production stage, for example through the standardised processes and the high degree of industrial prefabrication.

The individual modules are mechanically connected to each other. This has a positive effect on the construction and dismantling of the modular building. The modules can be connected together within a few days, but can also be easily separated again. As a consequence, this means a high degree of reutilisation, which automatically leads to a longer service life. Steel and plasterboard, the main building materials of a module, are ideal for recycling and reuse. All these aspects are included in the LCC analysis. Their results prove that investing in a sustainable modular building is a good decision in terms of economy and ecology.

There are various tools that can be used online to calculate the life cycle costs (LCC) for two different types of building. The input is usually quick and the calculation is kept extra simple. This gives you a feel for the relationship between construction costs and operating costs in the life cycle analysis, as the construction costs often only make up a small part of the overall analysis. The majority of a property's costs are incurred during operation. The calculations of the LCC analysis are based on the usual observation period of 50 years.

Calculation tool

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