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.
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.
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