Youre installing solar on a warehouse roof Its a 250KW insta

You\'re installing solar on a warehouse roof. It\'s a 250KW installation. It\'s expected to last 30 years, and provide 1,800kW-h/day of power. Power costs you S.14/kW-hin sunny San Diego. You also need to replace inverters in years 10 and 20, for $40,000 a pop. Assuming a 6% discount rate, and assuming monthly power bills, what\'s the most you\'d pay for this installation? For simplicity, assume a 30d month) (2 pt) 7.

Solution

time period = 30 years or 360 months

power savings/month = 0.14 x 1800 x 30 = $ 7560

interest rate (monthly) = 6%/12 = 0.5%

costs in 10th and 20th year = $40000

PV = 7560/(1 + 0.5%) + ... + 7560/(1 + 0.5%)¹²⁰ - 40000/(1 + 0.5%)¹²⁰ +  7560/(1 + 0.5%)¹²¹ + ..... + 7560/(1 + 0.5%)²⁴⁰ - 40000/(1 + 0.5%)²⁴⁰ +  7560/(1 + 0.5%)²⁴¹ + ...... +  7560/(1 + 0.5%)¹²⁰

PV = $ 1226875.45