A battery manufacturer is trying to sell its product to independent power producers in Texas. A unit that stores 1mw of electricity costs $100,000, and is projected to work for 10 years of constant use. It takes 1.2 megawatt-hours to charge in one hour, and is capable of releasing 1 mwh over the course of an hour. If the battery is fully charged and discharged once per day, what is the levelized cost of the battery, expressed in dollars per day, assuming an discount rate of 10 percent per year? (Note that the period is one day, and that there are two leap years over the next 10 years, amounting to 3,652 days over the 10-year period. And don't forget to convert the annual discount rate to a daily rate.)

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To calculate the levelized cost of the battery we need to consider the initial cost of the battery t... View the full answer