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<br /> <br />21 <br />5.3 Energy Model & Life Cycle Cost analysis <br />The life cycle analysis considered equipment efficiencies, energy rates, and the capital and operating costs <br />associated with the proposed energy systems. <br />5.3.1 CAPITAL COST <br />The estimated capital costs for each scenario are summarized in Table 7. <br /> <br />Scenario 1: <br />District <br />Energy - <br />Entire <br />Development <br />Scenario <br />2: District <br />Energy - <br />Town <br />Center <br />Scenario 3: <br />Decentralized <br />Geothermal <br />Distribution Network MM$ $34.3 $9.5 $0.0 <br />Building Connections MM$ $117.6 $117.6 $117.6 <br />Energy Source/Sink MM$ $41.7 $66.3 $99.6 <br />Total MM$ $193.6 $193.5 $217.2 <br />Total with IRA Reductions MM$ $161.6 $139.8 $130.3 <br />Table 7. Probable estimated capital cost for heating and cooling RCC buildings <br />By leveraging the Inflation Reduction Act (IRA), a 40% reduction in the capital costs for the district energy <br />distribution system, thermal sources, and building connections was assumed. The in-building equipment <br />costs, such as water-source heat pumps and VRF systems, were assumed to be the same for each scenario. <br />However, the IRA deduction does not apply to in-building equipment for buildings connected to the district <br />energy system. The IRA impacted the total capital cost for each scenario as follows: <br />• Scenario 1 – With IRA funding, the total capital cost decreased by $32 million. <br />• Scenario 2 - This scenario includes decentralized systems outside the Town Center. The decentralized <br />geothermal well costs were estimated at $46.9 million, and the district energy thermal source was <br />estimated at $19.4 million, totaling $66.3 million. The IRA was also applied to the decentralized <br />systems, including the in-building equipment, decreasing the total capital cost by $53.6 million. <br />• Scenario 3 - This is the most capital-intensive scenario, but more of the IRA funding can be applied to <br />in-building systems. This reduced the total estimated capital cost from $217.2 million down to $130.3 <br />million, a reduction of $86.9 million. <br />If the IRA were applied to in-building equipment for district energy connections, the total cost for Scenarios 1 <br />and 2 would be $116 million for each scenario. This would reduce the total capital cost to be lower than <br />Scenario 3 by approximately $14 million. Further research is necessary to determine the IRA’s applicability in <br />this context.