Tutorial_w3_18.pdf - University of New South Wales School...

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University of New South Wales School of Photovoltaic and Renewable Energy Engineering SOLA5057_GSOE9017: Managing Energy Efficiency Tutorial Week 3 ECONOMIC questions 1. A 20 W CFL which costs $3.50 is being considered to replace a burnt out 100 W halogen bulb (cost $0.50 per bulb). The light is used 5 hours a day, 7 days a week, 351 days per year. Electricity cost = 30 cents/kWh. The CFL has a lifetime of 8000 hours, while the incandescent has a lifetime of 1000 hours. a) What is the simple payback time? b) What would be the total costs/savings in nominal terms, over the life of the CFL in comparison to continuing to use incandescent bulbs? c) Calculate the difference in the NPV (CFL vs Incandescent) for the life of the CFL for a zero discount rate. d) What other benefits arise by using CFLs that have not been considered here? (There are broader economic and social benefits!). 2. If you were given $6,375 in 7 years time, what is its real value (what is it worth to you today), assuming a discount rate of 7% and inflation is a constant 2.5% per annum? What is its nominal value? 3. You install insulation at a cost of $2,100, and it reduces your annual heating/cooling costs ($1,000) by 35.168%. Discount rate = 7%, initially ignore inflation. What is the: a) i) Simple payback time?
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