The building owner in Example 3.5 has three options to invest his money, as briefly described below.

A. Replace the entire old boiler (including burner) with more efficient heating system. The old boiler/burner system has an efficiency of only 60 percent, whereas a new boiler/burner system has an efficiency of 85 percent. The cost of this replacement is $10,000.

B. Replace only the burner of the old boiler. This action can increase the efficiency of the boiler/burner system to 66 percent. The cost of the burner replacement is $2,000.

C. Do nothing and replace neither the boiler nor the burner.

Determine the best economical option for the building owner. Assume that the lifetime of the retrofit project is ten years and the discount rate is 5 percent. The boiler consumes 5,000 gallons/year at a cost of $1.20/gallon. An annual maintenance fee of $150 is required for the boiler (independent of its age). Use the LCC analysis method to determine the best option.