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Incremental Cost
The difference between the base cost for a comparable asset (ie,. like-for-like) and the upgrade cost of an asset.
  • Incremental costs are typically associated with an energy efficiency measure and used to calculate paybacks.
  • Incremental costs are also get-ahead costs when making a reinvestment decision.
  • Incremental costs are for the premium  value of the upgrade.

Examples:
A.  Listed below are some examples of projects that include an incremental costs due to economic obsolescence:
  • Boiler-and-Tank Retrofit
  • Copper-to-Pex Retrofit
  • T12-to-T8-to-T5 Retrofit
  • CFL-to-LED Retrofit
  • Spring-to-Weight Retrofit
  • VFD Retrofit
B.  Listed below are some examples of projects that include an incremental costs due to technological obsolescence:
  • Relay-to-Solid State Retrofit (see: elevator modernization)
  • Conventional-to-Addressable Retrofit
C.  Listed below are some examples of projects that include an incremental costs due to legal obsolescence:
  • PVC Encapsulated Cyclinder Retrofit
  • Sprinkler Head Retrofit
  • Emergency Telephone Retrofit
VFD retrofit
Fig. Triplex booster pump package replaced with package that includes VFDs. The VFDs and electronic controls represent the incremental cost.

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Fig. Elevator relay controls replaced with elevator solid state controls.

See also:


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