Chiller vs VRF System: Cost, Installation & Maintenance

As a design engineer, you may come across a situation where you need to choose between a chiller and a VRF system. Among all, water-cooled chillers and air-cooled VRFs are often go head to head. So, which one is right for you?

Generally, it is better to use chillers than VRFs when the total cooling demand exceeds 1000 refrigeration tons (RT). The capital cost is lower for VRFs but the operating cost is higher. Hence, using chillers for high cooling capacity applications often yield an attractive return on investment.

VRFs are known to be energy efficient. Besides, they are flexible in terms of capacity and installation location. But, there are good reasons why large buildings are not using VRFs entirely for cooling.


In terms of capital cost, water-cooled chiller systems are more expensive than air-cooled VRF systems. However, the operating cost of water-cooled chiller systems is lower due to higher energy efficiency.

A water-cooled chiller system is about 10% more expensive than an air-cooled VRF system per refrigeration ton (RT). For a 1200 RT project, the water-cooled chiller system can be about MYR 600k more expensive than the air-cooled VRF system.

As for the operating cost, an air-cooled VRF system is about 15% more expensive than a water-cooled chiller system per RT per year. So, the owner of a 1200 RT building needs to pay additionally about MYR 275k every year compared to having a water-cooled chiller system.

Water-Cooled Chiller SystemAir-Cooled VRF System
Preliminary MYR 100,000.00MYR 100,000.00
EquipmentMYR 5,750,000.00MYR 5,150,000.00
CommissioningMYR 50,000.00MYR 50,000.00
DLP ServiceMYR 100,000.00MYR 100,000.00
Total Capital CostMYR 6,000,000.00MYR 5,400,000.00
Estimated capital cost of a 1200 RT project
Water-Cooled Chiller SystemAir-Cooled VRF System
Annual Electricity CostMYR 1,700,000.00MYR 1,960,000.00
Annual Water CostMYR 58,000.00
Annual MaintenanceMYR 76,000.00MYR 149,000.00
Total Operating CostMYR 1,834,000.00MYR 2,109,000.00
Estimated operating cost of a 1200 RT project

Despite the water-cooled chiller system being more expensive to build, it saves a significant amount of money each year during operation. Hence, the return on investment of water-cooled chiller systems over air-cooled VRF systems is often about 3 years only.

However, the above example is not directly applicable to all projects. Certain projects are more suitable to use VRFs than chillers. After all, VRFs are developed to fill in the gaps between split units and chillers.

For people who are not familiar with chillers and VRFs, the following section is the basics of chillers and VRFs. For designers and building owners, the last two sections can give you more insights.

What are Chillers?

Chillers are giant air conditioning units made of the 4 major components for the refrigeration cycle; a) compressor, b) condenser, c) expansion valve and d) evaporator.

The purpose of chillers is to produce chilled water, which is basically cold water typically at around 6.7°C. Then, chilled water pumps, which are one of the essential pieces of chilled water equipment, send the chilled water to AHUs and FCUs thereby cooling the room.

There are three types of chillers; a) water-cooled, b) air-cooled and c) geothermal. Among them, water-cooled chillers are the most popular choice due to their practicality and high energy efficiency.

In a water-cooled chiller system, there are 5 essential pieces of equipment:

  • Water-cooled chillers – Produce chilled water
  • Chilled water pumps – Send chilled water to AHUs & FCUs
  • Cooling towers – Reject heat
  • Condenser water pumps – Send condenser water to cooling towers
  • Make-up water tank – Replenish evaporated water

AHUs and FCUs are no different from those used in VRFs except they use chilled water instead of refrigerant for cooling and dehumidification.

All 5 pieces of water-cooled chilled water system equipment are connected by chilled water and condenser water pipes which are basically PU insulated carbon steel pipes.

On a side note, if you want to quickly learn about chilled water system, you can get my Chilled Water System (eBook). If you’re into design, you can enroll in my Chilled Water System Design Course where I teach you various design procedures with tons of examples.

Chilled Water System Design Course

Learn how to design a chilled water system with AHU/FCU selection, chiller sizing, cooling tower sizing, pump sizing, piping design, ductwork design and more.

What are VRFs?

VRF stands for variable refrigerant flow. It is an air conditioning technology that controls the flow of refrigerant based on cooling demand. VRFs are direct expansion air conditioning units.

There are two types of VRFs; a) air-cooled and b) water-cooled. Among the two, air-cooled VRFs are more common than water-cooled VRFs due to cost and their practicality.

VRFs are no different than multi-split air conditioners except they use only one set of refrigerant pipes. The working principle of VRFs is basically the same as split and multi-split air conditioners. However, VRFs have more electronic controls to achieve higher energy efficiency.

The cooling capacity of a single VRF outdoor unit can go up to 191k BTU or nearly 16 RT. One set of VRF system can have 3 VRF outdoor units which make the total cooling capacity of the set of VRF system at 457k BTU or about 38 RT.

One VRF system (3 outdoor units) can be connected up to 64 indoor units (wall mounted, ceiling cassette, ceiling ducted, etc.) They are connected by a set of refrigerant copper pipes with refnet joints for refrigerant distributions.

VRFs often have independent central monitoring controllers and software. They don’t need to integrate with the building management system (BMS) like the chilled water system does.

If you want to know more details about VRFs, check out my post on VRF working principle.

Technical Comparison of Chillers and VRFs

Overall ComplexityRelatively simpleComplicated when scaled
Occupied SpaceNeed one large roomCan be scattered around small rooms
Design FlexibilityLimited by chiller capacityVery flexible
Combine Efficiency0.83 kW per RT (Good)0.95 kW per RT (Average)
Performance & ReliabilityConsistent & reliableHeavily depend on installation quality
RepairabilityRequired a specialistEasy to do


Chillers connect AHUs, FCUs, pumps and cooling towers via PU insulated carbon steel pipes. These pipes are often as big as 300mm in diameter, which required a significant amount of space both in the riser and above the ceiling. Furthermore, they are joined by welding.

On the other hand, VRFs connect their outdoor units and indoor units (wall mounted, ceiling cassette, ceiling ducted, etc.) by a set of closed-cell insulated copper pipes (liquid line and gas line). Big copper pipes are only about 16mm in diameter which is significantly smaller than the pipes used for chillers.

Although VRFs may look simpler to install thanks to the smaller pipes, their individual cooling capacity is significantly lower than chillers. Hence, VRFs required a lot of copper pipes. Though these copper pipes are relatively small, they collectively occupy a lot of space too.

Generally speaking, the installation of chillers is harder than VRFs. Because of the larger capacity, each chiller weighs a lot more than a VRF. Thus, the hoisting and positioning of the chiller is much more difficult and cost more.

In terms of installation skills, chillers require skilled workers, specialists and engineers to install. There are more technical issues involved in the installation of chillers than the installation of VRFs. Usually, technicians who have experience in split and multi-split air conditioners can install VRFs fairly easily.

If you are interested to know more about multi-split air conditioners, check out my post on what is multi-split air conditioner.

For building owners, you have to pay a large portion of your project funds when the chillers are delivered to the construction site because chillers mostly only deliver once. On the other hand, you can pay the contractor progressively with VRFs because they can be delivered several units at a time.

Project schedule wise, VRFs are progressive while with chillers, you can expect to have a spike of progress upon the delivery of the chiller. Any delay on the chiller work will significantly affect the overall completion of your project.

So, if you foresee difficulty in time and fund management, you may consider VRFs over chillers. Furthermore, if you are planning to progressively construct the building, VRFs are an excellent choice. Moreover, renovation projects are usually better off using VRFs than chillers due to space and structural strength constraints.


Chillers are easier to maintain and service than VRFs because with the same amount of cooling capacity, VRFs have significantly more items to be maintained and serviced.

To elaborate it further, you basically only need to do the following things with chillers:

  • Clean the evaporator and condenser tubes regularly (probably 4 chillers)
  • Clean the cooling tower infills regularly (probably 4 cooling towers)
  • Check the chilled and condenser water pumps regularly (probably 8 pumps)
  • Inspect the chilled water valves regularly (probably 100 valves)
  • Clean the cooling coil and filter of AHUs and FCUs regularly (probably 100 units)

If you are using VRFs, you need to do the following things:

  • Check the refrigerant gas pressure (probably 81 sets of copper pipes)
  • Check the VRF outdoor units (probably 81 units)
  • Check the VRF compressors (probably 161 units)
  • Check the expansion valves (probably 161 pieces)
  • Replace the closed-cell insulation (probably 10 sets of copper pipes)

The above example may not be applicable to your design but it gives you an idea of how many more things are to be maintained, serviced, replaced and repaired with VRFs. Although chillers have fewer things to worry about, they are often more difficult to do and sometimes, require you to hire specialists.

As a general rule, we want to have an HVAC system that requires as few things to service as possible. When scaled, VRFs can be a pain in the neck with hundreds of components failing and giving errors on a daily basis.


Both the chillers and VRFs are great air conditioning systems. Most of the time, chillers are used in large buildings where the cooling demand exceeds 1000 RT. As for VRFs, they are more suitable for thermal zoning, renovation, upgrades and add-ons.

VRFs are cheaper to build than chillers but they are not as energy efficient as chillers and thus, their operating cost is higher. Besides, VRFs are complicated when scaled and they require a lot of effort to maintain, service and repair.

If you don’t have time and fund issues and you’re constructing the building in one shot (not by stages), chillers are the way to go. Otherwise, VRFs are still better than split and multi-split air conditioners.

Once again, you can get my Chilled Water System (eBook) to quickly learn more about chilled water system. But, if you want to learn how to design a chilled water system from start to end, I encourage you check out my Chilled Water System Design Course.

Chilled Water System Design Course

Learn how to design a chilled water system with AHU/FCU selection, chiller sizing, cooling tower sizing, pump sizing, piping design, ductwork design and more.

If you have anything to add (or ask) about this topic, leave a comment down below!

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