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 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)