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PowerPoint ® Presentation Photovoltaic Systems Return on Investment Analysis Incentives Rebates Grants Cost Analysis Life-Cycle Costs Value of Money Annualized.

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Presentation on theme: "PowerPoint ® Presentation Photovoltaic Systems Return on Investment Analysis Incentives Rebates Grants Cost Analysis Life-Cycle Costs Value of Money Annualized."— Presentation transcript:

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2 PowerPoint ® Presentation Photovoltaic Systems Return on Investment Analysis Incentives Rebates Grants Cost Analysis Life-Cycle Costs Value of Money Annualized Costs Financial Payback Incentive Adjustments Arizona Solar Power Society Incentives Rebates Grants Cost Analysis Life-Cycle Costs Value of Money Annualized Costs Financial Payback Incentive Adjustments Arizona Solar Power Society

3 Chapter 15 Economic Analysis Several types of incentives are available for PV and other renewable-energy systems.

4 Chapter 15 Economic Analysis Tax incentives reduce the amount of tax that must be paid, whether they are tax exemptions or tax credits.

5 Chapter 15 Economic Analysis Renewable energy certificates (RECs) allow a utility or its customers to claim renewable energy while providing a financial incentive for renewable-energy producers.

6 Chapter 15 Economic Analysis A life-cycle cost analysis compares the life-cycle costs of various electricity- supply options.

7 Chapter 15 Economic Analysis Each system option must meet the same requirements, including the length of time used to calculate life-cycle cost.

8 Chapter 15 Economic Analysis The various types of life-cycle costs occur at different points in the life cycle of a power-generating system.

9 Chapter 15 Economic Analysis A certain amount of present money is equal to a greater face-value amount of future money. The difference in face value depends on the difference in time.

10 Chapter 15 Economic Analysis The present value of future money falls more quickly with higher discount rates.

11 Chapter 15 Economic Analysis The single present value factor is used to quickly calculate the present value of a single future value.

12 Chapter 15 Economic Analysis Related costs that occur every year are calculated and added together for each year to determine the total present value.

13 Chapter 15 Economic Analysis The recurring present value factor is used to quickly calculate the present value of a future value recurring for a number of years.

14 Chapter 15 Economic Analysis A life-cycle cost analysis totals the present values of all the life-cycle costs over the length of the analysis period.

15 Chapter 15 Economic Analysis The life-cycle cost analysis of a utility connection includes the initial connection costs and annual energy costs.

16 Chapter 15 Economic Analysis The life-cycle cost analysis of an engine- generator system includes each type of cost.

17 Chapter 15 Economic Analysis The most significant costs in the life cycle of a PV system are the initial costs.

18 Chapter 15 Economic Analysis Annualizing costs spreads costs evenly over the operating period, but results in the same total life-cycle cost for a system.

19 Chapter 15 Economic Analysis The payback point occurs when the cumulative avoided cost of one system matches the total life-cycle cost of another system.

20 Chapter 15 Economic Analysis The payback point can be determined by comparing the actual life- cycle costs of the various system options.

21 Chapter 15 Economic Analysis The annualized-cost method of determining the payback period is relatively simple, though it may be less accurate than the actual-cost method.

22 Chapter 15 Economic Analysis Incentives affect the total life-cycle cost differently, depending on how and when they are applied.


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