OPTIMIZING SOLAR THERMAL RESOURCE USE AT COMMERCIAL BUILDINGS
Tommy Cleveland
Thomas Pash
Henry Tsai
Laurel Varnado
North Carolina Solar Center
NCSU, Box 7401
Raleigh, NC 27695-7401
ABSTRACT
Due to limited experience with solar thermal space heating that would be needed to serve the occupants of the building
and cooling systems in the U.S. solar industry, the costs and year-round. It then determines the financial investment
benefits of these systems are not often well understood. This needed for a traditional HVAC unit powered by electricity
paper provides a model to delineate financial choices for and natural gas compared with that of a solar thermal
commercial solar thermal investments. The study also system providing much of the domestic hot water and space
provides a sensitivity analysis of several variables including heating, and some of the building’s space cooling needs,
system costs, escalation of energy costs, and Renewable using current absorption chilling technology. Using
Energy Credit prices. A sensitivity analysis of each of these respected solar thermal and building energy modeling
variables is presented independently to show the potential software packages (RETScreen, EnergyPlus and Energy-
impact of each variable on the overall rate of return for the 10), the study charts the systems’ energy performance
system. The paper combines the results and presents three within the commercial building, located in central North
different scenarios to show conservative, moderate, and Carolina.
aggressive forecasts for the increasing value of solar thermal
space conditioning. The end result shows a clear economic The second half of the study provides a comprehensive
value in these systems when sited in North Carolina. financial analysis using a calculator previously developed
by one of the authors, Henry Tsai. The same calculator is
then used to conduct a sensitivity analysis of the solar
thermal system for the following variables: cost of solar
1. INTRODUCTION thermal system, escalation of energy costs, and Renewable
Energy Credit (REC) prices. These analyses show the
While the energy used to heat domestic hot water (DHW) in potential impact of each variable on the overall rate of
U.S. residential and commercial buildings is significant, return for the system.
roughly three times that amount of energy is used for space
heating and cooling in these buildings.i
This paper provides a method for analyzing the financial 2. ASSUMPTIONS
costs and benefits of solar thermal systems that serve space
conditioning needs within commercial buildings. Using a In order to construct a reasonable scenario, the authors had
theoretical, energy-efficient office building as a model, this to make several assumptions, both internal and external to
paper begins by assessing the amount of heating and cooling the model.
copyright 2010, American Solar Energy Society first published in the SOLAR 2010 Conference Proceedings
To begin with, we made several assumptions regarding the Our inputs for the EnergyPlus simulation included the
actual building. We designed it to be 30% below ASHRAE following general picture of the building:
90.1 standards, which may have hurt the financial payback
of the solar system by limiting the total HVAC energy use. Raleigh, NC location
We reasoned that a building owner who is interested in solar U-shaped Office building of 50,000 sq. ft. (See fig.
thermal technology would also want to build the most 1 below.)
efficient building possible. 30% energy savings below ASHRAE 90.1-2004 (a
standard option offered by DOE guidelines)
This study used several interviews with system installers Packaged VAV with Reheat (System 5 in
and designers to determine a reasonable range of system ASHRAE 90.1 appendix G)
prices, both for energy efficient HVAC and solar thermal “Smart default” for other parameters
systems. We also tried to make practical assumptions
regarding the life of the project and annual maintenance These inputs resulted in energy use projections within the
costs, based on knowledge of similar, real-world projects. building for:
Other factors that may have affected our model include
Heating system capacity (641 kBtu/hr), which
natural gas and electricity price escalations, the continued
includes hot water usage
availability of current state and federal tax credits and
depreciation, and the availability REC markets. For these Tons of cooling capacity required (87)
variables, we used currently available policy incentives and Annual HVAC electricity use and annual natural
a conservative estimate in energy price escalations. gas use for space heating and hot water
Monthly heating, cooling and hot water loads
This study mirrored real-world projects in that it required a
significant amount of decision-making at every step. We We then checked these projections using Energy 10
generally tried to use conservative estimates when we did software and found the heating and cooling loads to be
not have real projects to cite. This is also the reason we comparable. This model building will be used to run two
provided a sensitivity analysis to correct for potential heating and cooling scenarios – one with a traditional
variations in several of these unknown variables. HVAC system that we call the control building and one with
traditional HVAC system plus a solar heating and cooling
system that we call the solar building. We designed the
scenario so that the solar building has the same HVAC
3. METHOD system as the control building but also has an absorption
chiller powered only by solar thermal energy.
The following is an outline of the general process we
followed to complete this study.
3.1 Construct the theoretical building and determine its
energy needs.
Based on interviews with contractors and industry
professionals familiar with this technology, we constructed
a model commercial building of 50,000 square feet. This
building serves as the sample control building for this study.
We further determined that a building of this size in North
Carolina would require a $500,000 to $750,000 initial
investment for a complete installed high efficiency variable
air volume (VAV) HVAC system. We then used the
EnergyPlus File Generation online tool to help us map out
the building. According to the website, “EnergyPlus models
heating, cooling, lighting, ventilating, and other energy
flows as well as water in buildings.”ii This generator tool is
a free service developed by the National Renewable Energy
Laboratory (NREL) and the U.S. Department of Energy Fig. 1: Rendering of the U-Shaped Building
(DOE) to help make it easier to use and learn the
EnergyPlus calculator.
copyright 2010, American Solar Energy Society first published in the SOLAR 2010 Conference Proceedings
3.2 Determine the thermal loads of absorption chiller. water loads of the building. We then converted the
building’s monthly cooling loads to the monthly thermal
The solar cooling system we modeled is composed of a energy input needs of an absorption chiller (assuming a
solar absorption chiller powered solely by a solar thermal coefficient of performance (COP) of 0.7) to meet this
system. This solar thermal system also serves the space cooling load. The monthly thermal energy needs of the
building served by an 87 ton absorption chiller are shown in
TABLE 1: MONTHLY THERMAL NEEDS Table 1. It is clear that the thermal energy needs of the
absorption chiller are the dominant thermal needs of the
building. Because of
this, and the fact that the
Space Fraction Space Energy Fraction Fraction
majority of cooling
Heating of Annual Cooling Needed by of Annual Domestic of Annual needed is in the summer,
Load Total Load (87 Ton) Total Hot Water Total monthly thermal needs
Energy Thermal Energy Absorption Thermal Load (GJ) Thermal vary greatly between
(GJ) Load (GJ) Chiller (GJ) Load Load winter and summer.
This large monthly
January 73.1 3.90% 12.4 17.7 1.00% 4 0.20% variation in thermal load
February 59.7 3.20% 16.8 24 1.30% 4 0.20% cannot be efficiently met
with a solar thermal
March 32.3 1.70% 40 57.1 3.10% 4 0.20% system. In order for the
system to supply enough
April 18.7 1.00% 61.9 88.4 4.80% 4 0.20%
thermal energy to the
May 4.03 0.20% 119 170 9.20% 4 0.20% absorption chiller in the
summer to warrant its 87
June 2.36 0.10% 159 227.1 12.30% 4 0.20% ton capacity, the solar
July 2.21 0.10% 171 244.3 13.20% 4 0.20% thermal system would be
grossly oversized for the
August 2.48 0.10% 200 285.7 15.40% 4 0.20% winter thermal loads. A
September 2.15 0.10% 133 190 10.20% 4 0.20% redundant cooling
system this large would
October 14.4 0.80% 77 110 5.90% 4 0.20% be an inefficient use of
capital. To make
November 31.5 1.70% 38.1 54.4 2.90% 4 0.20%
efficient use of the
December 62.4 3.40% 22.7 32.4 1.70% 4 0.20% capital invested in the
absorption chiller and
solar thermal system, the
heating load by providing hot water to the hydronic coils in absorption chiller needs to operate at near its capacity
the existing HVAC system and hot water to the domestic during the cooling season and the solar thermal system
hot water (DWH) load. As noted, the absorption chiller is a needs to operate near its capacity throughout the year. This
redundant cooling system to the full size HVAC system on can be achieved by downsizing the chiller from the full
the model control building. cooling peak demand of the building.
To meet this full cooling load the absorption chiller would A simple model was built to estimate the percentage of
have to have a capacity of 87 tons; however, because the monthly cooling load that a given capacity absorption
traditional HVAC system is sized to meet the full cooling chiller can meet. The fraction of the monthly cooling load
demand the absorption chiller may be sized to maximize the met by a given capacity absorption chiller was estimated as:
use of the solar thermal system. In other words, we could
down-size the absorption chiller to maximize the cost
effectiveness of the capital expense of the absorption chiller
and solar thermal system.
,
∗
, 100%
To begin the process of sizing the absorption chiller and ,
solar thermal system, we took the information supplied by
EnergyPlus and determined the heating, cooling, and hot
copyright 2010, American Solar Energy Society first published in the SOLAR 2010 Conference Proceedings
Where, TABLE 2: RELATIVE % OF MONTHLY AVG. LOAD
Thermal Load to
which Solar
, = monthly thermal energy demand of Thermal System is Relative Size of
full capacity (87 tons) absorption Month Exposed (MWh) Monthly Load (%)
chiller January 26.3 93.4%
February 24.3 86.4%
= maximum monthly thermal March 25.9 92.0%
,
April 30.9 109.4%
energy demand of full
capacity (87 tons) absorption May 29.6 104.9%
chiller (August, 285.7 GJ) June 29.1 103.3%
July 29.1 103.1%
August 29.2 103.4%
= capacity (tons) of downsized
September 29.1 103.1%
absorption chiller
October 32.5 115.1%
November 25.0 88.6%
= capacity (tons) of full sized December 27.4 97.3%
absorption chiller (87 tons)
3.3 Input data into RETScreen to size solar thermal
systems.
This is a conservative estimate of the load that a downsized
absorption chiller could meet because it assumes that the Once the size was chosen for the solar thermal cooling
cooling requirement in the peak load month of August is system, the amount of useful solar thermal energy supplied
always the full peak demand of 87 tons. This estimate was to heating water, heating the space, and cooling the space
made for every month of the year for chillers from 20-60 could be calculated in RETScreen. RETScreen is an
tons, in steps of 5 tons. The results of this monthly analysis internationally-used tool, designed “to evaluate the energy
is that a greatly downsized absorption chiller (20-40 tons) production and savings, costs, emission reductions, financial
can meet 100% of the winter cooling load and less than half viability and risk for various types of Renewable-energy and
of the summer cooling loads. Energy-efficient Technologies (RETs).”iii The inputs we
used included the following:
Using this adjusted chiller thermal load for a downsized
chiller, we then calculated, for each month, the total thermal Raleigh, NC location
load to which the solar system would be exposed. The size Collector type (evacuated tubes)
of the absorption chiller was tested in a range from 20 tons Collector make and model: Sunda 2-16 collectors
to 60 tons to find a size that provided a relatively flat Thermal load at 90 deg C
month-to-month solar thermal load, with about a 10-20% Relative monthly size of thermal load for all 12
increase in summer load over winter load. Also, the smaller months (86% to 115% range)
the absorption chiller size, the more hours in the year it will Tilt of collectors (several tested, 32 degrees
operate at its capacity and therefore maximize the use of the selected to maximize annual output)
capital expense. On the other hand, the smaller the chiller, Azimuth of collectors = 0 (South)
the smaller the associated solar system and the smaller the Ratio of storage to collector area: 75 L/m2
amount of solar energy provided.
The total thermal load was modeled at 90°C, which is much
Balancing the desire to maximize the use of the chiller and hotter than needed for space heating or domestic hot water,
the solar system with a desire to provide a significant solar but required for the operation of the absorption chiller.
fraction, we selected an absorption chiller of 30 tons for this Evacuated tube panels were used as the solar thermal
study. This system size provided a desirable total (space collectors so that the required high temperatures would be
heating, space cooling, hot water) thermal load annual provided as efficiently as possible. Flat plate collectors may
profile. The relative percent of the monthly average load also be used to provide these high temperatures, but this
was determined for the thermal load provided to the solar option was not investigated in the study. Because the
thermal system each month, which ranged from 86% in evacuated tubes are so well insulated, their output is reduced
February to 115% in October (see Table 2).
copyright 2010, American Solar Energy Society first published in the SOLAR 2010 Conference Proceedings
only slightly by supplying 90°C water to all three types of by multiplying the control gas loads by the fraction of the
loads, regardless of their temperature need. annual thermal load (given the downsized absorption
chiller), provided by the solar thermal system. The
The output from the RETScreen models was the annual electricity savings were calculated similarly by using the
useful thermal energy production (in MWh) for solar control chiller electricity input and the fraction of the annual
systems with a varying number of collectors (20 to 200 in thermal load provided by the solar thermal system.The
steps of 20 collectors). These data were used to develop results of these savings calculations were used to produce
curves of the useful annual thermal energy provided, the performance curves for various solar system sizes used in
natural gas savings, and the electricity savings for various the financial model.
system sizes (see Table 3).
4. RESULTS
Upon completion of the model inputs, RETScreen
recommends a certain number of collectors to optimize the To determine the comparative value of a solar heating and
solar thermal system size. Fewer panels mean that more of cooling system and a traditional HVAC system, we
the thermal load could be efficiently met with solar. More compared the net present value (NPV) of each type of
panels mean that annual useful energy output per panel is system on the same building. We then performed a
reduced more than may be desirable. Most of the solar sensitivity analysis to assess the impact of a variety of
thermal cooling system price quotes we received in factors on the economic feasibility of each system.
interviews with installers were given in terms of dollars per
absorption chiller capacity (tonnage) and included all of the 4.1 Economic Analysis.
solar thermal system costs. However, the size of the solar
thermal systems was not indicated. The best assumption that In creating a base analysis for installing either a traditional
may be made on the solar thermal system size associated HVAC system or a traditional HVAC system plus a Solar
with a given absorption chiller system is that the size of the Thermal heating and cooling system, we gathered data from
solar thermal system has been optimized. For this reason, a variety of sources. Natural gas and electricity rates used
the optimum number of panels suggested by RETScreen in this analysis were obtained from the EPA’s Energy Star
was used as the nominal system size. For a 30 ton Program’s Target Finder for the Raleigh zip code 27695iv.
absorption chiller, 70 Sunda 2-16 collectors (a 4.1 m2 The escalation rates of both the natural gas and electricity
evacuated tube collector) were recommended by prices were calculated from forecasted national prices
RETScreen. obtained from the Department of Energy’s EIA website.v
The costs related to the components of each
TABLE 3: ANALYSIS OF PANEL RANGE
Number of Useful Thermal Fraction of Electricity Electricity Total
Sunda 2-16 Energy Provided Gas Savings Gas Cooling Load Savings Savings Savings
Panels by Solar(MWh) (kBtu) Savings ($) Satisfied by Solar (kWh) ($) ($)
20 68.3 67,504 $929 0.116 10,069 $ 765 $1,694
40 127.6 126,112 $1,735 0.217 18,811 $1,430 $3,165
60 178.7 176,617 $2,430 0.304 26,344 $2,002 $4,432
80 222.2 219,610 $3,022 0.378 32,757 $2,490 $5,511
100 258.8 255,783 $3,520 0.441 38,152 $2,900 $6,419
120 289.1 285,730 $3,932 0.492 42,619 $3,239 $7,171
140 306.6 303,026 $4,170 0.522 45,199 $3,435 $7,605
160 316.9 313,206 $4,310 0.540 46,718 $3,551 $7,860
180 322.9 319,136 $4,391 0.550 47,602 $3,618 $8,009
200 327.5 323,682 $4,454 0.558 48,280 $3,669 $8,123
We then determined the gas and electricity savings for a 30 system and installation were preliminary estimates obtained
ton absorption chiller powered solely from a solar thermal from local contractors for the purposes of allowing a
system of various sizesmonth-by-month energy savings reasonable range of initial investment to be determined.
calculation was made for solar system sizes ranging from 20 The range of thermal REC prices was determined using
to 200 panels. This was accomplished by using the useful those offered by the two main electric utilities in North
thermal energy output from RETScreen to determine the Carolina. Progress Energy’s SunSense program offers
month-by-month gas and electricity savings provided by the Thermal RECs of $20/REC for commercial solar systems
solar system. The gas savings were calculated on this basis sized between 1,200 to 4,000 feet (30 to 100 collectors).vi
copyright 2010, American Solar Energy Society first published in the SOLAR 2010 Conference Proceedings
Duke Energy offers many different REC purchase Since not all cost assumptions will contribute proportionally
agreements ranging from a five year agreement payable at to the NPV, a sensitivity analysis was used to show the
$30/Solar REC to a fifteen year agreement paid up to impact on the total final cost by adjusting each of the cost
$46.92/Solar REC.vii Tax rates, credits and depreciation assumptions within the specified ranges (see table 4). The
adjustments were based on current conditions, including the cost of increasing the capacity of the solar system was
North Carolina state tax credit. Base Assumptions used for estimated to be between $3,000 and $7,000 per panel;
this economic analysis included: however, to avoid changing two variables at once a cost of
$5,000 per panel was used when varying the capacity of the
Electric Rate: $0.076/kWh solar thermal system.
Natural Gas Rate: $.0138/kBtu
Electricity Annual Price Escalation Rate: 2.2%
Natural Gas Annual Price Escalation Rate: 0.06% TABLE 5: OVERVIEW OF NPV RESULTS
Thermal Solar REC Price: $35/Solar REC
Annual Operating Costs for Solar System: $1,000 NPV of Systems with Base Case Inputs
Annual Operating Costs for HVAC System: $1,000
Solar System NPV HVAC System
Cost per Ton of Capacity for 30-ton Absorption Chiller
and Optimized Solar Thermal System: $13,000 30 Year ($700,117) ($763,085)
Number of Solar Panels in Optimized Solar System: 70 20 Year ($688,952) ($714,809)
Life of Project: 30 years
Discount Rate: 3.69% (10 Year Treasury Rate) 10 Year ($678,713) ($661,185)
Inflation Rate: 1%
4.2 Discussion. The NPV of both the traditional HVAC and the combined
traditional HVAC and solar system was calculated over a
The results are presented as an analysis of the base case
30-year project life to determine the cost advantages and
assumptions compared against reasonable ranges as
disadvantages of each system (See Table 5). For the
determined through personal interviews and market
traditional HVAC system, three variables were used: system
research. Using the base case assumptions discussed above,
cost, electricity price escalation rate, and natural gas price
the NPV of both systems becomes roughly equivalent
escalation rate. A variance based on the assumed ranges
between years 13 and 14 of the project with the solar system
was entered into the model and compared to the base case
having an incrementally better NPV in the remaining years.
scenario to visually illustrate each variable’s impact on the
total cost of the project.
TABLE 4: OVERVIEW OF ECONOMIC ASSUMPTIONS
Base Case Low Case High Case
Price in Escalation Price in Escalation Price in Escalation
Dollars Rate Dollars Rate Dollars Rate
Price Per KWh $0.076 2.20% $0.076 0.00% $0.076 4.40%
Price of Natural Gas
$0.0138 0.60% $0.0138 0.00% $0.0138 1.20%
per (kBtu)
HVAC System Cost $625,000 n/a $500,000 n/a $750,000 n/a
Absorption Chiller
30 n/a 30 n/a 30 n/a
Capacity (Tons)
Optimum Sized
$13,000/ton or $6,000/ton $20,000/ton
Solar System and n/a n/a n/a
$390,000 or $180,000 or $600,000
Chiller Cost
Number of Panels
70 n/a 52 n/a 88 n/a
(Sunda 2.16 Panels)
Thermal REC Price $35 1.00% $20 1.00% $50 1.00%
copyright 2010, American Solar Energy Society first published in the SOLAR 2010 Conference Proceedings
Due to the large initial investment, the varying of system additional variables that needed to be considered. The
costs had a much larger impact on the NPV than changes to number of panels, thermal REC prices, and the cost of the
the escalation rate of natural gas and electricity costs. The solar system per ton of chiller capacity also vary according
impact of varying each cost assumption is shown in the to the assumed ranges.
subsequent ten-year and thirty-year snapshots. The midline
on each graph represents the base assumptions; the darker
bar represents the high case of each variable analyzed and
the lighter bar represents the low case (see Table 4). A less
negative NPV indicates a more economically compelling
project.
Fig. 4: 10 Year Analysis of Solar System Compared to Base
Since the solar system would be installed in addition to the
traditional HVAC system, the combined system price is
included in this analysis. Similarly to the HVAC system by
itself, the cost of these two systems represent the largest
impact on the project’s NPV.
Fig. 2: 10 Year Analysis of HVAC Compared to Base
As we get deeper into the life of the project, the impact of
natural gas and electricity prices becomes incrementally
greater on the system’s overall NPV (See fig. 3). While the
system cost is still the most important driver in total final
costs, the disparity in the level of sensitivity between the
cost of the system and natural gas and electricity prices
lessens as time goes on. If the escalation rates derived from
the EIA website for electricity and natural gas turn out to be
less conservative, natural gas and electricity prices could
become a larger factor in the later years of the project.
Fig. 5: 30 Year Analysis of Solar System Compared to Base
Thermal Solar RECs offered by local utilities offer a method
of mitigating the additional initial costs associated with the
solar heating and cooling system. These RECs, depending
on the rate the project receives, can vary the final NPV by
up to $100,000 over the life of the system (see fig. 5).
Using the same electricity and natural gas price assumptions
in the HVAC system, there is a similar effect. The future
energy price volatility has a low impact on the overall final
costs of the project when compared to other factors.
However, in time, the impact gets larger in proportion to the
Fig. 3: 30 Year Analysis of HVAC Compared to Base other variables, particularly with electricity cost.
We evaluated the solar system, including the absorption The longer the life of the project, the better the picture
chiller, and the backup full-sized HVAC, using the same becomes for the solar heating and cooling system. Since the
variables as the HVAC system; however, there are several solar system represents a larger initial investment than the
copyright 2010, American Solar Energy Society first published in the SOLAR 2010 Conference Proceedings
HVAC system, the incentives offered by local utilities as electricity prices are referenced from EIA, but many factors
well as the federal and state governments have a major are on the horizon to place upward pressure on these prices,
impact on the viability of a solar project. Since the including stricter environmental standards and the continued
variability in each of the cost assumptions in this study is so emergence of developing economies. Even under what we
great, each project should be evaluated on its own using site consider conservative estimates with the initial energy costs
specific information and actual quotes from industry and escalation rates, the NPVs demonstrate that both
professionals. technologies have a similar financial outcome in terms of a
project decision. As evident in the sensitivity analysis, a
competitive REC price is important in making the two
5. LIMITATIONS technologies indistinguishable as an economic decision. In
summary, a compelling economic case can be made to
Due primarily to the lack of local expertise in the area of choose a solar thermal system even under prevailing
solar thermal heating and cooling installation, this research economic conditions. The continued momentum of
paper was subject to certain limitations. In comparing a environmental policies, energy prices and technology
typical HVAC system with a solar thermal space heating, improvements only improve the economic case for solar
cooling and DHW system, this study only investigated thermal cooling.
specific system types as a means of comparison. We did not
consider other system alternatives, which may have 7. ACKNOWLEDGEMENTS
produced different results. The authors would like to thank the following people for
lending their time and expertise: David Simms, Vicente
The system pricing data used in the economic analysis was Bortone, Bill Bostic, Marshall Dunlap, Joey Chorley, Greg
based on preliminary estimates from contractors and should Rice, Sid Bendahmane and Kirk Nuss.
not be considered representative of formal quotes. There
are numerous variations unique to individual buildings that 8. REFERENCES
could play a factor in determining system costs and energy (1) Bortone, Vicente. Johnson Controls. Phone
usage. These variations include building envelope, Conversation. March 2, 2010.
orientation and regional climate. (2) Simms, David. Lee Air Conditioning. Phone
Conversation. March 2, 2010.
Since this model was created using North Carolina heating (3) Tsai, Henry. Project and Technology Economics Model,
and cooling needs in a new energy efficient building, as well March 5, 2010.
as state incentives specific to the state, the energy usage and
incentives of a comparable building in other regions may
i
differ. Market factors such as labor and transportation costs U.S. Energy Information Administration, “Use of Energy
in other states may also affect system pricing. In addition, in the U.S. Explained,” EIA,
since tax legislation is applied in a different manner to non- http://tonto.eia.doe.gov/energyexplained/?page=us_energy_
profit organizations and government agencies, these use
ii
organizations may not be able to take advantage of the U.S. Department of Energy, EnergyPlus Energy
incentives used in this analysis, which could greatly affect Simulation Software, Energy Efficiency and Renewable
the cash flow of the model. Energy, http://apps1.eere.energy.gov/buildings/energyplus/
iii
RETScreen International, Natural Resources Canada,
6. CONCLUSION http://www.retscreen.net/ang/home.php
iv
EPA Energy Star Target Finder,
The results show that solar cooling may be a financially
http://www.energystar.gov/index.cfm?fuseaction=target_fin
feasible investment, despite the lack of widespread adoption
der
of the technology. North Carolina provides a tax credit for v
US Department of Energy, Energy Information
renewable systems and, combined with the federal tax credit
Administration, Forecasts and
and depreciation, this significantly improves the financial
Analysis, http://www.eia.doe.gov/oiaf/forecasting.html
outlook for this type of system. The NPV for both systems vi
Progress Energy, Carolina's SunSense Commercial Water
may not equal out as fast as some companies are willing to
Heating, http://www.progress-
accept, but the analysis could entice some early adopters to
energy.com/custservice/carbusiness/efficiency/programs/sol
consider it.
arthermal/details.asp
vii
Duke Energy, Duke Energy Carolinas Standard Purchase
Like many renewable energy projects, the NPV for the solar
Offer for Renewable Energy Certificates (RECs), Duke
technology improves in conjunction with longer evaluation
REC offer:
time frames and with higher energy price escalation. The
http://www.duke-energy.com/pdfs/REC-Purchase-Offer.pdf
current assumed escalation rates for both natural gas and
copyright 2010, American Solar Energy Society first published in the SOLAR 2010 Conference Proceedings