Question
A 30 Kw photovoltaic system on a building reduces the peak demand by 25 kW and reduces the annual electricity demand by 60,000 kWh/yr. The
A 30 Kw photovoltaic system on a building reduces the peak demand by 25 kW and reduces the annual electricity demand by 60,000 kWh/yr. The PV system costs $135,000 to install,has no annual maintence costs, and has an expected lifetime of 30 years. The utility rate structure charges $.07/kWh and $9/kW per month demand charge.
a. What annual savings in utility bills will the PV's deliver
b. What is the internal rate of return on the investment with no escalation in utility rates?
c. if the annuyal savings on the utility bills increase 6% per year, what is the IRR
( for b & c, calculate NPV not IRR and us 12% discount rate)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started