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From a review of the VRF model it does not look like piping correction factor is used during sizing. This appears to be an oversight on sizing VRF systems. The piping correction factor adjusts the total terminal unit (TU) capacity (sum of all zone cooling coil capacity) as Total TU Cooling Capacity = Condenser Cooling Capacity * Piping Correction Factor. So in your example you should divide by piping correction factor as 10 kW / 0.9 = 11.11 kW. Then Total TU Cooling Capacity = 11.11 * 0.9 = 10 kW. The more piping losses there are, the larger the condenser needs to be to serve all the zone TUs.