Z E M C H 2 0 1 2 I n t e r n a t i o n a l C o n f e r e n c e
632
Cost-effectiveness Assessment
The future worth is the value of an asset in the future. It determines the worth for a given
sum of money at a specific time to which an assumed rate of interest is applied. In this
study, the future worth of each design option was estimated using the following formula:
FW = AC (1 +i)
n
(1)
Where,
FW = future worth of the option selected
AC = annual energy cost
i = interest rate
n = number of the year in question
Moreover, in this study, a cost effectiveness measurement was modelled. In comparison
to the benchmark option (OPT 4), the cost-effectiveness of all other design options has
been calculated using the following formulae:
CE
OPT x
=
(AC
OPT 4
– AC
OPT x
)
· (1 +
i)
n
(2)
Where,
CE
OPT x
= cost-effectiveness of annual energy cost difference
AC
OPT 4
= annual energy cost of the benchmark option (OPT 4)
AC
OPT x
= annual energy cost of the option selected (OPT X)
i = interest rate
n = number of the year in question
The future worth (or value) of the options has been calculated based on an assumption
that the interest rate is 10% applicable to a period of 10 years. In this assessment, the
negative values imply benefits to the house owner while the positive values indicate that
the owner is required to pay for the energy use. The results help identify the best
possible combination amongst the options given in view of the future economic value
based on the operating energy cost. In comparison to the benchmark option (Option 4 in
this study), cost-effectiveness was calculated and the negative values indicate
inefficiency in energy output (Table 8).
