Korea Commercial HVAC Purchase vs Rental Lifecycle Cost Calculator

Compare commercial HVAC purchase and rental in KRW using equipment, installation, electricity, demand charges, maintenance, downtime, replacement, residual value, deposits, and end-of-contract cash flow.

Quick illustrative scenarios

These values are not market averages or recommended quotes. Replace them with like-for-like purchase quotes, rental proposals, and recent electricity-bill data.

1. Shared operating and financial assumptions

Keep both alternatives at the same service level, then use site-specific operating hours, effective electricity price, and downtime value.

units
years

1 to 60 years

h/year

Combined cooling and heating operation

%

Average share of rated input

KRW/kWh

Use a recent bill-based marginal rate

KRW

Lost contribution margin and temporary cover

%/년

0 to 30%

%/년

Applied to maintenance, repair, and replacement

%/년

Keep consistent with nominal escalation rates

2. Purchase upfront and energy inputs

Separate equipment from installation scope and use rated or representative input power from the product proposal or filing record.

KRW
KRW

Piping, wiring, lifting, and commissioning

KRW

Design, controls, electrical upgrade, reinstatement

kW
KRW/year

Whole-system amount

KRW/year

Gas, thermal source, pumps, and similar

3. Purchase maintenance, replacement, and end value

Avoid overlap between warranty, maintenance, and repair reserves. Set the replacement cycle to zero for no replacement within the horizon.

KRW/year
KRW/year
h/year
years

Zero means no replacement

KRW

Current quote including removal and reinstallation

KRW

Nominal recovery in the final year

KRW

Include disposal and reinstatement

4. Rental contract and energy inputs

Confirm what installation, consumables, repairs, and replacements the monthly fee includes, and separate refundable deposits from non-refundable costs.

KRW
KRW
KRW
KRW/month
%/년

Use 0% when contractually fixed

kW
KRW/year
KRW/year
KRW/year

Cleaning, consumables, call-outs, and similar

h/year
KRW
%

Use the contract-confirmed rate

Lower present-value lifecycle cost

Purchase

KRW 79,179,828 lower over the analysis horizon

Purchase PV

KRW 278,940,060

Rental PV

KRW 358,119,888

Equivalent cost and break-even

Purchase monthly equivalent

KRW 2,335,242

Rental monthly equivalent

KRW 2,998,123

First discounted crossover

Year 4

Purchase cumulative PV ≤ rental cumulative PV

Break-even monthly rent per unit

KRW 300,691

Level that equalizes both alternatives under current inputs

Year-one energy and recurring cost

Purchase43,200 kWh

Energy-related KRW 8,976,000 · All recurring KRW 15,976,000

Rental39,168 kWh

Energy-related KRW 8,050,240 · All recurring KRW 31,850,240

Purchase and rental lifecycle summary

Nominal total adds year-by-year cash flow, while present value discounts every future amount to one base date.

Purchase and rental initial, nominal, present-value, and equivalent cost comparison
MetricPurchaseRental
Initial cash outflowKRW 59,000,000KRW 8,200,000
Nominal lifecycle costKRW 331,416,359KRW 432,578,277
Present-value lifecycle costKRW 278,940,060KRW 358,119,888
Equivalent annual costKRW 28,022,900KRW 35,977,471
Equivalent monthly costKRW 2,335,242KRW 2,998,123

Comparison by cost category

Residual value and deposit refunds are negative costs. Because deposits are paid upfront, a fully refunded deposit still has a present-value opportunity cost when the discount rate is positive.

Commercial HVAC purchase and rental nominal and present-value cost by category
Cost categoryPurchase nominalPurchase PVRental nominalRental PV
Initial equipment, installation & depositKRW 59,000,000KRW 59,000,000KRW 8,200,000KRW 8,200,000
Monthly rental feesKRW 0KRW 0KRW 289,701,138KRW 238,638,360
Electricity usageKRW 104,292,410KRW 85,909,809KRW 94,558,451KRW 77,891,561
Demand charges & other energyKRW 16,094,508KRW 13,257,687KRW 13,412,090KRW 11,048,072
Maintenance & repairsKRW 45,601,105KRW 37,563,446KRW 5,364,836KRW 4,419,229
DowntimeKRW 48,283,523KRW 39,773,060KRW 24,141,762KRW 19,886,530
Purchase replacementsKRW 62,144,814KRW 46,241,578KRW 0KRW 0
Removal, return or buyoutKRW 2,000,000KRW 1,402,760KRW 1,200,000KRW 841,656
Residual value & deposit refund-KRW 6,000,000-KRW 4,208,279-KRW 4,000,000-KRW 2,805,520

Electricity-price sensitivity

Only the electricity usage price moves to 80%, 100%, and 120% of base; demand charges and all other costs stay unchanged.

Purchase and rental present-value sensitivity to electricity price
ScenarioElectricity pricePurchase PVRental PVLower cost
80%144 KRW/kWhKRW 261,758,098KRW 342,541,576Purchase
100%180 KRW/kWhKRW 278,940,060KRW 358,119,888Purchase
120%216 KRW/kWhKRW 296,122,022KRW 373,698,200Purchase

Annual cash flow

Purchase replacement years: 10

Annual nominal and present-value cash flow for commercial HVAC purchase and rental
YearPurchase electricityPurchase replacementPurchase PVRental feeRental electricityRental PVCumulative PV gap
Year 1KRW 7,776,000KRW 0KRW 15,510,680KRW 21,600,000KRW 7,050,240KRW 30,922,563KRW 35,388,117
Year 2KRW 7,931,520KRW 0KRW 15,360,090KRW 22,032,000KRW 7,191,245KRW 30,622,344KRW 20,125,863
Year 3KRW 8,090,150KRW 0KRW 15,210,963KRW 22,472,640KRW 7,335,070KRW 30,325,040KRW 5,011,786
Year 10KRW 9,293,040KRW 62,144,814KRW 60,448,413KRW 25,813,999KRW 8,425,689KRW 28,323,180-KRW 50,515,309
Year 12KRW 9,668,479KRW 0KRW 11,126,794KRW 26,856,885KRW 8,766,087KRW 25,812,021-KRW 79,179,828

Keep the result separate from quote, contract, and tax decisions

  • Compare alternatives with the same capacity, installation scope, redundancy, warranty, response time, and replacement service.
  • Rated power × hours × load factor is a planning approximation. Cross-check with metered kWh or an energy simulation when possible.
  • The model does not calculate VAT recovery, depreciation, financing, early-termination penalties, insurance proceeds, or income-tax effects.
  • Official-source review date: 2026-07-30. Default inputs are illustrative, not official averages.

Related calculators

Compare commercial HVAC purchase and rental on lifecycle cost

A purchase quote and a monthly rental payment do not cover the same cash-flow boundary. Ownership can add installation, electricity, preventive maintenance, out-of-warranty repairs, downtime, replacement, removal, and residual value. Rental can add a deposit, non-refundable installation, excluded consumables or service, electricity, return work, and an end-of-term buyout. This calculator places both alternatives on one analysis horizon and reports nominal cost, discounted present value, equivalent annual and monthly cost, and the monthly rental fee that would make the two present values equal.

Korea-based inputs without a hard-coded Korean tariff

Results are shown in KRW and the source guidance points to Korea Energy Agency product records and KEPCO billing documents. No national average equipment price, rental fee, efficiency, electricity tariff, VAT treatment, depreciation rule, or tax saving is embedded. Replace every illustrative default with comparable written quotes, a recent bill-based incremental electricity price, and the actual contract terms.

Cost boundary for each alternative

Purchase

  • Equipment, standard accessories, and controls.
  • Piping, wiring, lifting, commissioning, and reinstatement.
  • Electricity usage, incremental demand charges, and other energy.
  • Preventive maintenance and an out-of-warranty repair reserve.
  • Expected business downtime and replacements inside the horizon.
  • End removal and disposal less residual or resale value.

Rental

  • Refundable deposit and non-refundable setup or installation.
  • Monthly rental fee and renewal escalation.
  • Electricity usage, incremental demand charges, and other energy.
  • Cleaning, consumables, call-outs, or repairs excluded by contract.
  • Expected provider response, repair, or exchange downtime.
  • Return, removal, reinstatement, buyout, and deposit refund.

Build like-for-like inputs from evidence

Start by matching cooling and heating capacity, unit configuration, installation scope, redundancy, warranty, response time, and replacement service. A quote that omits electrical upgrades, long piping, lifting, ceiling reinstatement, or removal is not comparable with one that includes them. Use rated or representative input power from the proposal, the Korea Energy Agency filing record, or measured data rather than inferring consumption from a product name or grade alone.

Evidence to collect for commercial HVAC lifecycle inputs
InputPreferred evidenceControl check
Equipment and installationItemised written quotationUse one VAT and removal-scope basis
Input powerProposal, filing certificate, or metered kWInclude relevant fans, pumps, and auxiliaries
Electricity priceRecent twelve-month KEPCO billsSeparate usage price from demand charge
Maintenance and downtimeContract exclusions, fault logs, contribution marginAvoid multiplying one shared outage by every unit

Calculation method

1. Annual electricity usage

Annual kWh equals unit count × representative input power in kW × equivalent operating hours × average load factor. Four units at 7.5 kW, 2,400 hours, and 60% load produce 43,200 kWh. This is a planning approximation, not a building-energy simulation; use measured consumption or a calibrated model when available.

2. Present value and equivalent annual cost

Each year's net cost is divided by `(1 + discount rate)^year` and added to the time-zero outflow. Electricity usage follows the electricity-price escalation rate; maintenance, repair, downtime, demand charges, other energy, and replacement follow general escalation; rental payments follow rental-fee escalation. At a zero discount rate, equivalent annual cost is PV divided by years. Otherwise it is `PV × r / (1 - (1 + r)^(-n))`.

3. Replacement, residual value, and deposit opportunity cost

A positive purchase replacement cycle creates events at each multiple strictly before the final analysis year. The final purchase year adds removal and subtracts residual value. The final rental year adds return, removal, or buyout cost and subtracts the contract-confirmed deposit refund. A fully refunded deposit has zero nominal net cost, but it still carries a present-value opportunity cost because cash is paid now and recovered later.

Step-by-step workflow

  1. Match service output. Confirm capacity, configuration, redundancy, installation scope, warranty, and provider response.
  2. Enter shared operation. Use site schedules for annual hours and load factor, then enter a bill-based incremental electricity price.
  3. Decompose the purchase quote. Keep equipment, installation, common works, maintenance, repair, replacement, and end costs distinct.
  4. Decompose the rental contract. Separate the deposit, non-refundable setup, monthly fee, escalation, exclusions, end option, and refund rate.
  5. Read PV with cash flow. Review the lower-cost option, initial outlay, equivalent monthly cost, first crossover, and replacement-year funding.
  6. Stress the assumptions. Change electricity price, operating hours, downtime, replacement cost, rental escalation, and discount rate.

Worked illustrative scenario

The editable default uses four units, a 12-year horizon, 2,400 operating hours, 60% load, KRW 180/kWh, 2% electricity and general escalation, and a 3% discount rate. Purchase uses KRW 12 million equipment plus KRW 2 million installation per unit, KRW 3 million common upfront work, and a KRW 13 million per-unit replacement in year 10. Rental uses a KRW 1 million deposit, KRW 800,000 installation, KRW 450,000 monthly payment per unit, and 2% annual fee escalation. These are test inputs, not market averages.

Results for the illustrative commercial HVAC scenario
MetricPurchaseRental
Annual electricity43,200 kWh39,168 kWh
Nominal lifecycle costKRW 331,416,359KRW 432,578,277
Present-value lifecycle costKRW 278,940,060KRW 358,119,888
Equivalent monthly costKRW 2,335,242KRW 2,998,123

Interpretation, not a market recommendation

Purchase is lower by KRW 79,179,828 in present value and first falls below rental cumulative PV in year 4. The monthly rental fee that equalizes PV under all other default assumptions is about KRW 300,691 per unit. A provider's faster exchange, broader maintenance, stronger warranty, or financing flexibility may still have value; represent quantifiable benefits through lower excluded maintenance, downtime, or end cost before deciding.

How to read the outputs

Present-value lead

This is the economic comparison at one base date. It does not by itself prove that the lower-PV option fits the available opening cash budget.

Break-even rental fee

This holds every other input fixed and solves the per-unit monthly payment that equalizes PV. A negative result means non-rent rental costs already exceed purchase PV.

Electricity sensitivity

The 80%, 100%, and 120% rows move electricity usage cost only. Test operating hours and load factor separately because both may change with occupancy and climate.

Contract and quote checklist

  • Match model, rated capacity, indoor and outdoor unit arrangement, controls, and redundancy.
  • Normalize VAT, piping length, electrical upgrade, lifting, night work, removal, disposal, and finish reinstatement.
  • Confirm free-repair parts, consumables, cleaning frequency, call-out fees, response time, temporary equipment, and exchange triggers.
  • Read the minimum rental term, escalation, early-termination penalty, ownership transfer, return condition, and deposit deductions.
  • Plan purchase-side compressor, inverter, and heat-exchanger repairs after warranty and the outage caused by replacement.
  • Run VAT recovery, depreciation, financing, insurance, and Korean income-tax effects in a separate accounting review.

Limits and cautions

The power × hours × load-factor model does not reproduce outdoor temperature, building load, part-load performance, defrost, piping effects, controls, fans, pumps, setpoints, or envelope performance. KEPCO general-service bills can differ by contract demand, supply voltage, tariff option, season, and time band, so the calculator does not embed one tariff table. Use an incremental usage price and a separately confirmed annual demand-charge increase. This result is not a supplier quotation, HVAC load calculation, mechanical or electrical design, safety decision, tax or accounting opinion, or contract review.

Frequently asked questions

Should excluded rental maintenance be zero when service is included?

It can be zero when the contract genuinely covers the cleaning, consumables, call-outs, parts, and exchanges you need. Check exclusions, caps, service windows, and after-hours charges before doing so.

Can I divide the total KEPCO bill by kWh?

A total bill can mix demand charges, usage charges, adjustments, VAT, and funds. Using that average while also entering an annual demand-charge increment can double count. Prefer a marginal usage price plus a separately estimated demand-charge change.

Why is a replacement at the final analysis year excluded?

Buying a new unit at the final instant without modelling its later service would add cost without matching benefit. Extend the horizon or handle the new equipment and its residual value explicitly instead.

Is a fully refunded deposit cost-free?

It nets to zero in nominal cash flow when fully returned, but the present-value result retains the opportunity cost of paying cash now and recovering it years later.

Does a lower purchase PV mean I should always buy?

No. Opening cash constraints, relocation risk, technical obsolescence, internal maintenance capability, and service certainty may matter. Quantify what you can through downtime, replacement, end cost, and discount rate, then use a separate qualitative decision matrix for the rest.

Official sources and update basis

The cash-flow boundary follows NIST Handbook 135e2022 and the U.S. Department of Energy Building Science Education lifecycle-cost overview. Product input-power and efficiency checks point to the Korea Energy Agency efficiency database. Korean electricity context points to KEPCO Electricity Supply Terms Article 57 and Appendix 1. Sources were reviewed on July 30, 2026; no product price, rental price, or electricity rate from those pages is hard-coded.

Turn two proposals into one comparable cash-flow model

Gather the purchase quote, rental contract, recent electricity bills, and maintenance history, then replace every default above. Re-run a base, conservative, and optimistic case to see whether the result survives realistic changes in energy price, downtime, replacement, and contract escalation.