Better Roofs Are Less Expensive
Article by Richard A. Boon, P.E., CCI
The ultimate question for roofing is: “What is the best roof?”
The accountants will tell you that the answer is simple: It is
the roof that costs the least over its life. It really does not
matter what material is used or how the roof is attached; the
answer is the same. If the roof fails, then the cost of a new
roof is added to the cost.
When most owners look at roofing, they look at the materials and
the systems, and the only part of the cost they consider is the
initial cost. But the cost to install a roof is only a portion
of the total cost of owning a roof.
The practice of examining the cost of owning a roof over its
entire life is called life-cycle cost analysis. This is the best
way to truly compare the cost/value of roofing systems.
Something that is crucial is: How long do you expect to own the
building? If the answer is indefinitely, then the analysis
should be run for at least 20 years. Some people will use 30
years. The standard depreciation for roofing is 39 years. There
are very few systems that are functional at the end of this life
expectancy.
In a basic life-cycle cost analysis, there are several factors
that need to be considered. The study period has already been
mentioned. The next consideration is the changing value of a
dollar over time. One common method for relating future expenses
to today's costs is to use the t-bill rate, minus the inflation
rate. A time value of approximately 5 percent is a reasonable
number for use in our analysis.
There are costs associated with other aspects of roofing, such
as installation inspections, semi-annual inspections, the cost
of leak-related repairs, costs associated with making the
warrantor live up to the warranty, and so on. There are also
routine maintenance expenses to consider, such as cleaning the
drains, recaulking the flashings and performing general
housekeeping.
With some systems, the costs of performing some of these items
are covered by the warrantor as a part of a comprehensive
service package. They can also be purchased from some
contractors or roofing consultants for an annual service charge.
All of these costs need to be known or estimated for the term of
the study period.
The last item that needs to be known is the relative life
expectancy of the roofs in question. There are sources for this
information. The most conservative approach is to use the
warranty life as the service life. This is generally shorter
than the real life, except where there is no routine maintenance
done. Then the life may well be shorter than the warranty.
Life-cycle Cost Scenario
Let's create a simple scenario that illustrates how these
factors combine to produce a life-cycle cost:
The roof in question is bid using two different systems. The
first is a commodity-grade roof with a 15-year warranty; the bid
is $225,000. The second system is a premium roof, and the bid is
$300,000.
We are assuming that the owner is a public entity, so that taxes
can be ignored. We are using our 5 percent for the time value of
the funds.
The cost to maintain the commodity-grade roof is at least $1,000
per year, to cover the costs of the required inspections for
warranty and the cost of a consultant on the project during
installation (many consultants are considerably higher).
When that roof is replaced, in its 15th year, its present value
cost is $113,640, representing the initial cost adjusted by the
time value of the funds. When you add the continuing cost of
maintenance, the total-ownership cost for the commodity roof
becomes $354,781.
With the second system, assuming that the premium roof is
replaced in its 24th year, the present value cost is only
$97,671. Since the system supplier provides the required
inspections as a free service, there are no maintenance-related
costs for the first 15 years of the roof. Let's assume as much
as $1,500 in annual maintenance from years 15 through 23. Let's
also assume roof replacement in year 24, a conservative estimate
for a roof that was warranted for 20 years.
Even with these conservative estimates, the total-ownership cost
for the premium roof is $346,273. As the federal interest rates
drop, the difference in total-ownership cost increases, making
the premium roof an even better buy.
Since the premium roof has a manufacturer's rep on site during
installation, installation-related problems and add-on
inspection costs are minimized. In addition, on-site
manufacturer observation provides the benefit of single-source
liability, should problems eventually occur.
The figures used in this illustration are in accordance with
ASTM E-917, Standard Practice for Measuring Life-Cycle Costs of
Buildings and Building Systems, which provides building owners
with an excellent tool for comparing roofing options on a sound
financial basis.
Other Factors
There are other factors that can be included in a model. These
include a simple energy cost savings as well as the costs that
are associated with any leaks in the system. If a roof leaks,
then the wet areas need to be fixed, as does the damage done
inside the building. The additional energy lost can be
considered as well.
There is also a cost associated with disrupting the facility to
put a new roof on. This should be added to the cost of the roof.
How much does it cost to clean up after a leak? This too, must
be added.
It has been reported that the return on an initial investment of
$10 to $12 can be justified through the savings of a single
dollar per year in maintenance.
So, which of these roofs saves the owner the most money?
Clearly, the higher up-front costs of premium roofing systems
can be fully justified through long-term savings.
By looking at more than just the initial cost of the roof, the
owner is making a better financial decision. This same analysis
is useful for making a multitude of construction-related
purchasing decisions.
Are the published life expectancies of high-performance roofing
products truly achievable? There is no question that if someone
knowledgeable looks at the roof at least once a year (industry
recommendation is twice a year), and the problem areas are
corrected promptly, most commercial roofs will last
significantly longer than their warranties. The exception is
when defective materials cause the roof to shrink excessively or
to shatter.
Conclusion
Life-cycle cost analysis is the best way to discuss making
roofing decisions with financial people. The one that makes the
final decision is the one that signs the checks. Roofing people
are great at providing technical information but poor at
providing the financial information that supports the right
decision.
Improve the quality of your data. Examine your own roofs or the
roofs of others in your area and find out what is working and
what's not. This data can then be used to better model the true
life-cycle costs.
Roofing is often seen as a problem area in building construction
and maintenance. This perception is earned in part by the people
who most often complain about it. The designers and facility
managers that choose their roofing systems and contractors based
on an assumption that the lowest bid for the least expensive
roof is going to provide satisfactory results. This assumption
is based on the idea that roofing specifications are performance
based and that all contractors are equally qualified to install
all systems. This assumption is false. Unfortunately, it remains
a basic tenant for some in the industry.
About the Author: Richard A. Boon,
P.E., is an independent roofing consultant with Construction
Support Services, Inc. of Littleton, Colorado. He is a past
director of The Roofing Industry Educational Institute and
serves on Roofing Contractor’s editorial advisory board.
Contact our Roofing Specialist today to help you with your roofing needs.
