Chiller Systems

These systems provide chilled water for use in air conditioning or other cooling applications. While some models of chillers are more energy efficient than others, all generate a valuable commodity: waste heat. When skilled operating personnel will not be on duty during system operation, operations are planned to use absorption chiller as a peak shaving unit.

Install Costs

Installed costs and capital offsets are important economic parameters when choosing an electric versus a natural-gas powered heater. Find out how an electric chiller may be able to lower your energy bills.

The installed cost of electric chillers is significantly lower than comparable heat-driven chillers. Heat-driven Chillers require larger cooling water pumps and towers. Engine driven chillers have a prime mover that costs much more than a comparable electric motor (and has much higher maintenance costs as well). Absorption chillers are much more costly than comparable sized electric chillers.

While the factory price of a chiller unit may be easy to obtain, a more meaningful economic comparison is based on the estimated total installed cost. This figure should include the chiller plus associated cooling tower and condenser water pumps and piping or air-cooled condenser, plus delivery of the equipment to the job site, and installation with interconnecting tower/chiller/pump piping and controls, including the contractor’s overhead and profit.

Where any one cost segment is constant for all alternatives (such as chilled water distribution pumps and piping), this cost can be omitted since it will not affect the outcome comparison. In some cases, the comparison is simplified if incremental costs are used; that is, one chiller is considered the base and the other alternatives are assessed at how much more or less they cost. For example if one chiller requires 100 more kW service than another, than the incremental service cost is estimated at $45/kW. That chiller’s incremental cost would be $4,500 more than the base unit’s cost.

In the absence of current, project specific, installed cost figures, these charts and tables can be used to estimate and compare costs.

The costs shown are typical of large water chiller installed costs including cooling tower with pump piping and installation or air-cooled condenser. They are at nominal tons capacity and HCFC-123 or HFC-134a compatible.

  • Electric Reciprocating Chillers – Air – and Water-Cooled
  • Electric Centrifugal/Screw Chillers – Water-Cooled
  • Absorption & Engine Drive Chillers – Water-Cooled

The values provided reflect new construction in a typical building in a representative U.S. city with median labor rates. For units larger than 1,000 tons, the installed cost per ton declines only slightly on a dollar per ton basis. Costs shown are mid-1995 estimates for a single package chiller. On many installations, multiple units of equal or mixed capacities are used. Again, location, labor rates, rigging, control options, and unit efficiency can substantially affect the actual installed cost, which can vary as much as +25%.

Some gas suppliers will subsidize the higher installed costs of engine-driven and absorption chillers. One way they do this is to absorb a percentage of the cost premium. Others will offer incentives, anywhere from $100 to $150 or more per ton, to reduce the installed cost premium. There is no way to be certain how long these incentives may continue.

Operating and Maintenance Costs

What’s involved in operating and maintaining an electric versus a fuel-fired chiller?  Find out what sort of day-to-day cost-saving advantages come with investing in an electric chiller.

Operating and maintenance (O&M) costs include the day-to-day costs keeping the equipment running. It is wise to keep these estimates on the conservative side since the economic analysis will contribute to a prudent financial judgment. This is not the place for optimism. Operating costs depend largely on the relative electric and gas rates. It is vital that the demand charges and energy costs of each alternative be calculated separately and consider any seasonal or time-of-use provisions. Never use “average rates.”

Building codes or other considerations may dictate the need for operating personnel. If this is the case, personnel costs must be included. And don’t forget to add the energy and water prices to the energy consumption rate of each chiller alternative on a “level playing field” basis. Maintenance costs for screw and centrifugal chillers are typically lower than for absorption chillers, since these chillers require more frequent replacement of mechanical components, tube stresses are higher, and there are simply more tubes to replace. Costs for engine-driven chillers are even higher since they require engine maintenance in addition to the same maintenance costs as an electric chiller.

In the absence of current, project-specific maintenance costs, these two charts and tables can be used to estimate annual maintenance costs of non-CFC chillers.

Natural Gas Engine-Driven Chiller Maintenance Issues

With natural gas engine-driven chillers, engine maintenance is a costly item. The engine vibrations affect tube bundles and compressor shaft seals. Higher speed (3,600 rpm) engines are less reliable than lower speed (1,200 rpm) engines. All spark-ignited natural gas engines used on chillers require periodic service, (including spark plug and lubrication oil changes) every 500 to 750 hours of service. The technicians that would normally service the chiller may not be qualified to service the engine. Multiple vendor responsibilities between the engine, controls, and chiller suppliers tends to complicate maintenance. In addition, environmental legislation is likely to mandate emission controls which current engines may not be able to meet.


Engine maintenance is directly proportional to the operating (running) hours per year. Depending on the engine, a major overhaul or engine replacement will be needed after a certain number of hours. This typically ranges from 8,000 hours on the relatively high-speed 3,600 rpm automotive-type engines to 24,000 hours on 1,200 rpm industrial-grade engines. The engine maintenance cost should be added to the maintenance costs of a like capacity electric chiller and include complete engine-only service plus a sinking fund for overhaul and engine replacement.


Natural gas engine maintenance costs typically range from $0.006 to $0.020 and the average is $0.012 per ton per operating hour. Add the engine maintenance cost ($ per ton per operating hour x chiller capacity x operating hours per year) to the maintenance costs of a similarly sized electric chiller ($ per ton-year x chiller tons capacity). This total will include the chiller and the full service and replacement cost of the engine.

Preventive Maintenance

With the rising costs of energy and refrigerants, plus the added concern about the environment, proper ongoing and preventive maintenance of chilling equipment makes good sense. In most areas there are competent independent- or manufacturer-operated service agencies who can provide this maintenance under contract. Owners or building managers with a large inventory of equipment may choose to employ their own personnel. In all cases, technicians should be well trained in the equipment serviced and stay up-to-date through periodic retraining.


For accurate economic comparisons, obtain local service contract quotations on the various alternatives. Lacking actual quotations, this table provides estimates of the annual dollars per installation for single chiller installations including the cooling tower and condenser water pump. These figures are based on median labor rates and no significant travel time. These values also include an allowance for materials and supplies.

Multiple Units

For multiple units at a single location, make the calculation as if the units were singly installed and multiply the total dollar chiller only maintenance cost of all units (not including gas engine maintenance) by a 0.80 multiplier for two units at single location, or a 0.70 multiplier for three or more units at single location. For engine-driven chillers, add in the engine-only maintenance costs.