Lifetime Cost of Ownership Tool | Knowledge Base

Overview

A financial comparison tool that calculates the lifetime cost of ownership for three water heater types — electric storage (ESWH), gas storage/continuous flow, and heat pump (HPWH) — over a user-defined time horizon. The user inputs capital costs, energy tariffs, system efficiencies, and an expected usage profile and receives a comparison showing annual running costs, cumulative cost curves, payback period, and emissions for each system type.

This is primarily a sales and advocacy tool. The intended outputs are charts and tables that a manufacturer or installer can use in a client presentation or on a product information sheet to make the financial case for HPWH adoption. The visual quality of outputs matters: these need to be exportable and presentable, not just a calculator.

User Stories

As a manufacturer, I want to show a retailer or distributor how the total lifetime cost of my heat pump compares to a gas system so I can overcome the higher upfront price objection.
As a plumber quoting a job, I want a quick payback calculation I can show a homeowner when recommending an upgrade from an aging electric storage system.
As an EnergyAE consultant, I want to factor in available STCs and VEECs when calculating the net capital cost of an HPWH so the comparison accounts for upfront incentives.
As a user, I want to export a clean comparison chart I can drop into a presentation or attach to a quote.

Inputs

Household profile

Annual hot water consumption (litres/day) or use a standard profile (small household 150L, medium 200L, large 300L)
Location / climate zone (drives ambient temperature assumption for HPWH performance)

System specifications

For each system type (ESWH, gas, HPWH), the user either uses platform defaults or overrides:

Electric storage water heater (ESWH):

Purchase price ($)
Installation cost ($)
System efficiency: fixed at ~90% (editable)
Expected lifespan (years, default 12)
Annual maintenance cost ($, default 0)

Gas water heater:

Type: storage vs continuous flow
Purchase price ($)
Installation cost ($)
Star rating or efficiency (%)
Expected lifespan (years, default 15)
Annual service cost ($, default $100)

Heat pump water heater:

Select from product database, or enter manually
If from database: COP vs ambient temperature curve pre-fills from product record
Purchase price ($)
Installation cost ($)
Expected lifespan (years, default 15)
Annual service cost ($, default $50)

Platform defaults for each system type are pre-populated with market-typical values. Alastair to provide default values before build.

Energy tariffs

Electricity tariff ($/kWh) — flat or controlled load
Gas tariff ($/MJ or $/GJ)
Expected annual tariff escalation rate (%, default 3%)

Incentives

Available STCs for HPWH (auto-calculated from product record if linked, or user-entered number)
Available VEECs or ESCs (user-entered, or auto-calculated if product record linked)
STC dollar value ($/certificate, user-entered or market default)
Government rebate amount ($, user-entered, for state or local rebates not in the platform)

Time horizon

Analysis period: 10, 15, 20, or 25 years (user selects)
Replacement cycles: automatically inserts a replacement purchase at end of each system lifespan within the analysis period

Outputs

Annual running cost comparison

Table showing annual energy cost for each system type at the inputs provided:

System	Annual energy (kWh or GJ equiv)	Annual energy cost ($)
ESWH
Gas
HPWH

Cumulative cost comparison (primary chart)

Line chart showing cumulative lifetime cost for each system type over the analysis period:

X axis: years from purchase
Y axis: cumulative total cost ($, including purchase, installation, running costs, replacement costs)
Net capital cost for HPWH shown net of STCs and rebates
Chart clearly shows payback year (crossover point where HPWH cumulative cost drops below ESWH or gas)
Export as PNG and SVG

Payback summary

Simple payback period vs ESWH (years)
Simple payback period vs gas (years)
10/15/20 year net savings vs each comparator ($)
Net present value (NPV) of upgrade to HPWH vs each comparator at a user-defined discount rate (default 5%)

Emissions comparison

Annual and lifetime CO2-equivalent emissions for each system type:

ESWH: grid emissions factor × annual electricity consumption
Gas: combustion emissions factor × annual gas consumption
HPWH: grid emissions factor × annual electricity consumption (lower because of higher efficiency)
Grid emissions factor: pre-loaded for each AU state and NZ, based on current published values. Alastair to provide/confirm source.
Annual emissions reduction (tonnes CO2-e/year) from switching to HPWH
Lifetime emissions saved (tonnes CO2-e over analysis period)

Export

Full report as PDF: all charts plus summary table, branded with EnergyAE or plain white label
Summary table as Excel
Chart as PNG/SVG

Assumptions and Transparency

The tool must clearly display all key assumptions used in the calculation. A collapsible “Assumptions” panel showing:

COP value used for HPWH (which ambient temperature and which point on the curve)
Grid emissions factor used and source
Tariff escalation rate
Replacement cycle timing
Whether incentives are included or excluded

This is important because the outputs will be used in client-facing presentations and must be defensible.

Out of Scope (v1)

Solar PV interaction (solar self-consumption reducing running cost)
Battery storage interaction
Hot water heat pump vs space heating heat pump comparison
Sensitivity / tornado chart (show how changes in assumptions affect payback)
Commercial scale comparison (this tool is residential only)
Insurance, finance costs, or depreciation

Data Model (indicative)

lcoe_runs
  run_id
  user_id
  created_at
  product_id (nullable, if HPWH linked to database)
  inputs_household (JSON)
  inputs_eswh (JSON)
  inputs_gas (JSON)
  inputs_hpwh (JSON)
  inputs_tariffs (JSON)
  inputs_incentives (JSON)
  analysis_period_years
  output_annual_cost (JSON: per system type)
  output_cumulative_cost (JSON: time series per system type)
  output_payback (JSON: payback vs each comparator)
  output_emissions (JSON: annual and lifetime per system type)
  scenario_label (nullable)

Acceptance Criteria

Open Questions

Should the COP used for annual HPWH running cost be the test point COP, the average annual simulated COP (from the performance simulator), or a simplified lookup? A simplified lookup (e.g. average COP at average annual ambient for the selected zone) is easiest to implement and sufficient for this purpose.
What are the default purchase and installation prices for each system type? Alastair to provide market-typical values for AU and NZ separately.
Grid emissions factors change each year as the grid decarbonises. Should these be hardcoded with a version date, or fetched from a live source? A hardcoded value with a visible “last updated” date is simplest for v1.
Should the emissions comparison show the trajectory under a projected grid decarbonisation scenario (e.g. showing that HPWH emissions will fall further than gas as the grid gets cleaner)? This is compelling but adds complexity.
White-label PDF export: should there be a toggle for EnergyAE branding vs plain, or always EnergyAE branded?