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Balancing capex and opex is critical when specifying a new commercial heating boiler

An LPG engineer sitting in a Calor vehicle, looking to her left to check her tools
Balancing capex and opex is critical when specifying a new commercial heating boiler
Specifying a boiler for a commercial heating system, whether as a replacement or new installation, is a major financial decision with many factors to consider.

Understandably, the significant financial investment in the boiler equipment and the installation will tend to dominate the discussion, as organisations consider the impact on their current year’s capital expenditure budget and the likely depreciation over the boiler’s lifespan.

Yet, this can be short sighted when looking at the ‘whole life costing’ of the installation, as, over a typical 15-20 year cycle, the operating costs in terms of fuel bills, maintenance and service etc, are likely to be significantly greater than the initial outlay.

This is where carefully considering the choice of fuel is so critical, as this will have the most impact on the operating expenditure budget.

A long-lasting one-off

Choosing the boiler is a one off decision, likely to be made with just a few weeks or months consideration, yet that single decision, potentially locks the user into a fuel source for the next 15-20 years.

When the focus is on the capex cost alone, then there can be a natural inclination to specify on a like-for-like basis, especially for replacement projects. So, if the current system runs on oil, then it is easy to default to specifying the same, rather than investigating all the options thoroughly.

This is even more important in off-grid installations where the choices of fuel are already more limited than in major urban environments.

No one can predict the comparative prices of different fuels in 10-15 years time with certainty, yet we can make clearer predictions about the security of supply for different fuels, where LPG’s long term availability is strikingly clear.

We can also predict with confidence that carbon reduction and the environmental impact of any heating system will remain high on the priority list, with ever more stringent standards and legislation. This is another area where LPG scores highly.

Accounting for the unpredictable

Finally, we can also predict that ‘the unpredictable’ will become more common, especially in terms of climate change –  witness the 2015 winter floods in Cumbria which hit this off-grid area very hard.

When disaster strikes like this, damaged or even ‘floating’ oil fuel storage tanks can add to the levels of pollution and make the clean up more complicated, whereas LPG, which can be stored underground and poses no pollution hazards will not have the same issues and so is potentially more resilient.

In summary, specifying a new commercial boiler should not be based solely on either the current costs of a particular fuel nor on the short -term impact on the capex budget, but on a more sophisticated whole life assessment looking at multiple factors.

For more information on how we can help you specify LPG and help your customers switch, download our ‘Specifiers Guide to LPG’ resource.