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An electrical energy audit indicates that the motor control center consumption is 810 6 kWh per year. By using high efficiency motors, a savings of
An electrical energy audit indicates that the motor control center consumption is 8106 kWh per year. By using high efficiency motors, a savings of 15% can be achieved. The additional cost for these motors is about $80,000. Assuming that the average energy charge is $0.08 per kWh, is the expenditure justified based on a minimum rate of return (i.e., a discount rate) of 18% before taxes. Assume a 20-year life cycle and use the present worth, annual cost, and rate of return methods.
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