Replace a chiller when three years of accumulated repairs approach half the price of a new unit, or when major components fail while energy use climbs and parts grow scarce. ASHRAE puts chiller service life at 20 to 25 years; once a unit is past the halfway point, the question is when, not whether.

When should you replace a chiller instead of repairing it?

The time has come for a chiller replacement once the accumulated repair cost over the course of three years gets close to half of the price of a new unit, or the repairs of significant components are required while the energy consumption is increasing and components are hard to obtain.

It is not a condominium-board issue, and not the question limited to the 15-year period, it is a decision every building owner, board, property manager, and facilities team has to make as any major system comes to its end of life.

ASHRAE gives 20-25 years as the life cycle of a chiller; therefore, if a chiller enters its second part of the life, the key question to ask yourself is whether it should be replaced or whether it should go into operation in the hottest day of summer.

Combine the cost rule with age, make it a life-cycle cost calculation, not an individual invoice. The industry rule of thumb is: once a single repair, or the accumulating three-year repair cost, becomes bigger than 50% of the replacement cost, the economic sense of repair goes out the window.

Added to the age, units below 10-12 years and maintained are usually worth repairs; units beyond the half of 20-25-year service period are more likely to require replacement.

However, what needs to be taken into consideration is the whole cost of the unit maintenance, repair cost, energy consumption, humidity and downtime risks against the cost of a replacement with incentives and financing for years the building is supposed to work. Decisions made by invoices result in replacement according to the equipment schedule, and not the owner’s.

What are the signs a chiller is near the end of its life?

Three signs altogether, and not one of them. Recurring failures of the major components (compressor, controls, heat exchangers); increasing energy consumption for providing the same amount of cooling; lack of the spare parts.

Single major repair is just a repair, the trend indicates that the unit needs replacement.

In the humid climate, there is an additional sign, the building keeps the temperature, but the humidity grows because the tired chiller cannot keep the chilled water at required level, so the cooling coils are running warmer and cannot take away the moisture from the air.

How much more efficient is a new chiller, and can you right-size while you’re at it?

Quite substantially, in fact, replacement is the moment when you can tackle much more issues.

Chillers installed in the early 2000s were operated with efficiency ranging between 0.8-1.0 kW/ton; the high-efficiency chillers today work at 0.5-0.6 kW/ton or even better, which is the 20-40% gain in efficiency. For the year-round cool climates, this difference means some operating cost savings.

Even more importantly, a lot of older chillers are oversized, the building load has changed or the load was oversized from the very beginning, and replacement gives a chance to right-size, add a variable-speed drives and upgrade the controls. Like-for-like replacement skips the savings; an engineering evaluation of the load will allow capturing them.

Why does a failing chiller cost more than its energy bill in a humid climate?

Because of the silent decrease of humidity control, which is not reflected in the energy bills. As the plant wears out, it cannot provide enough cold water, and although the temperature is kept, the moisture removal decreases.

The building becomes humid, and the residents report musty odors not explained by the maintenance staff. Unattended, this issue develops to the mold problem, an additional cost and liability, significantly greater than the energy differential.

The cheapest moment to replace a chiller is according to the planned schedule.

The most expensive time is when the chiller fails.

What does replacing on the worst day actually cost?

Much more than on the planned day, this is the exact reason for early decision-making. Modern chiller is not a regular off-the-shelf piece of equipment: its delivery time takes 20-30 weeks, with extended timelines for larger units.

Failure in August means that temporary chillers have to be rented at higher prices for several months until the replacement is produced, and emergency procurement always implies the 20-35% additional cost compared to planned purchase.

Besides, it means that there is no time for competitive bidding, overtime installation and tenants experiencing a cooling failure in August, along with the humidity and potential mold problems. Planned replacement means off-season pricing, getting several bids, and scheduled installation; emergency replacement means higher price on each point.

How does the refrigerant phase-out affect the decision?

Increases the cost and risk of maintaining an old unit. Many chillers operating today use R-22 or early versions of R-410A.

R-22 production and import has stopped in 2020, and R-410A is being phased out by the AIM Act, so new equipment uses low GWP A2L refrigerants, which means that every future recharge of an obsolete-refrigerant unit becomes more expensive and uncertain.

Repair of such a chiller means that you pay extra year by year for extending the system that costs you more and more to maintain.

Does this framework apply to other major building equipment?

Certainly, it is just a case of the clearest example.

This reasoning works for every major MEP equipment with long service life and definite replacement cost: cooling towers, boilers, pumps, air-handling units and packaged rooftop units, domestic water heaters, and even elevators.

For each of them, the decision is based on the same four factors, the 50%-of-replacement rule, age relative to ASHRAE service life, obsolescence (parts and, for cooling equipment, refrigerant), and efficiency/reliability gains of a new unit.

Run your reserve study or capital plan for all of them, not just the failed unit, so the whole building operates on the planned replacement schedule, and not on the emergency replacements.

The recommendation. Don’t make decisions one invoice at a time. As any major equipment reaches the second half of its service life, get an engineering assessment, not a repair quote, calculating the true cost of keeping it (repair cost, energy consumption, humidity and reliability risks) against the cost of replacement with incentives and financing, according to the 50%-of-replacement rule.

Get the utility rebates for high-efficiency equipment and financing (C-PACE) to reduce the capital cost, and coordinate the plan with the reserve study/capital plan so that the funding is provided on your schedule, not a special assessment after the equipment dies.

We can help do engineering assessment for existing buildings, as part of our Energy Management & Performance service. It includes the rebate and financing review, and it is meant to replace the repair quote as the basis for the decision. If your plant is past the halfway point of its life, send us the maintenance log and we will take a look.

Sources: ASHRAE equipment service life · Chiller repair-vs-replace 50% rule & efficiency · Commercial chiller lead times & emergency premium · EPA AIM Act — R-410A / R-22 phasedown · LBNL — chiller efficiency (kW/ton)