The installed cost of a conventional electric hot water heater is $200. A family of four uses an average of 300 liters of hot water a day, which will require $350 worth of electricity each year.
The installed cost of two solar panels, a small electric pump, and a storage tank with an auxiliary electric heater is $1,400. It will cost $60 per year on the average for electricity to run the pump and to heat the water on cloudy days. Both systems will have a $0 salvage value at the end of their useful lives.
Based on a MARR of 12%, determine how long the solar system must operate to make it as economical as the electric system.