Question
A solar energy system is to deliver 70% of an annual energy requirement of 300 GJ. The solar energy system equipment installed cost is $18,000.
A solar energy system is to deliver 70% of an annual energy requirement of 300 GJ. The solar energy system equipment installed cost is $18,000. The equipment is to be paid for by a 20% down payment and 80% loan at 9%/year over 10 years. The market discount rate is 10%/year. The resale value is expected to be small. This is not an income producing facility. Other costs include: Insurance and O&M (operation and maintenance). These costs collectively are $2550 in the first year, and inflate at 6%/year. The owners federal income tax rate is 40% and the installation is in a state where there is no state income tax. Auxiliary energy supplied is 90 GJ/year, its initial cost is $8.80/GJ, and it is expected to rise at 10%/year. Compute the life cycle saving over a 15 year period.
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