1
ME 417
Design of Alternative Energy Systems
Thermal/Economics Practice Problems
1.
A company has decided to air condition their manufacturing facility. They
are trying to decide between an absorption refrigeration system and a vapor
compression refrigeration system. The following economic data is available:
Absorption System
Vapor Compression System
Capital Cost
$125,000
$85,000
Annual Operating Cost
$15,000
$20,000
The life of both systems is estimated to be 15 years and the interest rate for
the company is 13%. Using a present value analysis determine which system
should be purchased. What would be the annual operating cost of the vapor
compression system needed to make the two systems equivalent in terms of
cost?
2.
A homeowner is considering replacing their current gas fuel heating system
with a solar heating system. Both systems are to last 20 years and the
homeowners interest rate is 8%. The initial cost for the furnaces is $1200 and
the annual fuel cost $600. Determine the capital cost of the solar system that
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 Spring '07
 SOMERTON
 Solar System, Energy, Heat, annual operating cost

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