Gene Fowler owns a house that contains 202 square feet of windows and 40 square feet of doors. Electricity usage totals 46,502 kWh: 7.960 kWh for lighting and appliances; 5,500 kWh for water heating: 30,181 kWh for space heating to 68°; and 2.861 kWh for space cooling to 78°F. Fowler can borrow money at 12% and lends money at 8%. The following 14 energy-savings alternatives (Table P15.15) have been suggested by the local power company for Fowler's 1,620-square-foot home.
Table P15.15

(a) If Fowler stays in the house for the next 10 years, which alternatives would he select with no budget constraint? Assume that his interest rate is 8%. Also, assume that all installations would last 10 years. Fowler will be conservative in calculating the net present worth of each alternative (using the minimum annual savings at the maximum cost). Ignore any tax credits available to energy-saving installations.
(b) If Fowler wants to limit his energy-savings investments to $1,800, which alternatives should he include in his budget?

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Annual Savings Estimated Payback Period Structural Improvement Costs 1. Add storm windows 2. Insulate ceilings to R-30 3. Insulate floors to R-11 4. Caulk windows and doors 5. Weather-strip windows and doors 6. Insulate ducts 7. Insulate space- heating water pipes 8. Install heat retardants on E, SE, SW (Years) 3.5 2.7 2.1 4.0 7.2 9.1 3.7 $128-156 $455-556 149-182 408-499 158-193 327-399 25-31 31-38 224-274 184-225 ,677-2.049 41-61 100-122 152-228 and W windows 37-56 304- 456 8.2 9. Install heat-reflecting film on E, SE 10. Install heat-absorbing film on E, SE 11. Upgrade 6.5-EER A/C to 9.5-EER unit 21-32 772-1,158 366 SW, and W windows 21-31 204-306 9.9 SW, and W windows 5-8 204-306 39.5 12. Install heat pump water-heating 115-172 5.9 680-1,020 32-48 system 13. Install water-heater jacket 26-39 1.2 14. Install clock thermostat to reduce heat from 70° to 60° for 8 hours each night 96-144 88-132