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U.S. Department of Energy
Office of Scientific and Technical Information

Simplified energy design economics: principles of economics applied to energy conservation and solar energy investments in buildings

Book ·
OSTI ID:6938991
A guide to basic economic concepts and tools for solving simple economic problems in energy conservation and for understanding complex problems is provided. The concepts of economic efficiency are discussed, followed by a discussion of the basic principles of economics required to comprehend the economic evaluations of alternative investment decisions. Step-by-step procedures for evaluating the economic desirability of alternative investments are presented to illustrate and reinforce an understanding of the principles. Five tools of economic analysis discussed are: life-cycle cost, net benefits or savings, savings-to-investment ratio, internal rate of return, and discounted payback. A solar energy system with a conventional backup system is evaluated for cost effectiveness against a conventional energy system used alone using the five tools. Factors affecting benefits and costs discussed are: discount rate, incentives, inflation, salvage value, taxes, time horizon, and uncertainty. A glossary, discount formulas and factors, and uniform present worth factors modified for energy price escalation are covered in appendices. (MCW)
OSTI ID:
6938991
Report Number(s):
NBS-Special Pub-544
Country of Publication:
United States
Language:
English