The March 31, 2011, edition of the Wall Street Journal includes an article by Russell Gold entitled

Question:

The March 31, 2011, edition of the Wall Street Journal includes an article by Russell Gold entitled “Solar Gains Traction—Thanks to Subsidies.”
Instructions
Read the article and answer the following questions.
(a) What was the total cost of the solar panels installed? What was the “out-of-pocket” cost to the couple?
(b) Using the total annual electricity bill of $5,000 mentioned in the story, what is the cash payback of the project using the total cost? What is the cash payback based on the “out-of-pocket” cost?
(c) Solar panel manufactures estimate that solar panels can last up to 40 years with only minor maintenance costs. Assuming no maintenance costs, a 6% rate of interest, a more conservative 20-year life, and zero salvage value, what is the net present value of the project based on the total cost? What is the net present value of the project based on the “out-of-pocket” cost?
(d) What was the wholesale price of panels per watt at the time the article was written? At what price per watt does the article say that subsidies no longer be needed? Does this price appear to be achievable?

Net Present Value
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