The period under consideration as timeframe for the efficiency calculation
For individual measures, the period under consideration should be close to the technical lifetime of a measure. It should be verified whether the investment in an energy measure can be generated by the savings before a new investment becomes necessary.
If modernisation measures with different technical lifetimes are combined, choosing the period under consideration is more complex. Common periods under consideration are 20 – 30 years. It may also be useful to choose a time close to the term of a loan.
Different technical lifetimes result in repeated replacements of individual components throughout a longer period under consideration, generally at least replacement of parts of the technical building services. In these cases, replacement investments may be expected within the period under consideration. This may be determined using a replacement investment factor from the respective table, depending on the technical lifetime, the inflation rate, and the adequate target rate.
If the lifetime of a building component exceeds the period under consideration, a residual value is generated. This can be determined with financial mathematic methods such as depreciation.
In connection with determining the "cost optimal level of requirements" according to the European Directive on energy Efficiency of buildings by the member states, the European Commission (via a Delegated Act and accompanying guidelines) has established a calculation method relying on annuity and respecting residual values and replacement investments. Concerning such calculations - which also shall be used as basis for related reports the German Federal Government submits to the Commission - the period under consideration is fixed as follows:
- measures on residential buildings: 30 years,
- measures on non-residential buildings: 20 years.