A client wishes to install a solar photovoltaic (PV) system to reduce their peak demand charges, and their electrical energy charges. The client can only implement the project if the simple payback period is 10 years or less.

What is the smallest size of PV system (in kW) that will result in the desired payback?

Assume that the PV system installation cost consists of a fixed cost of $2,426 plus $4,862 per kW of PV capacity. The government offers a one-time rebate of $516 per kW of PV. The client pays $11 per kW in demand charges each month, and $0.14 per kWh. You may assume that 100% of the PV system capacity would decrease the peak electrical charges, and that the system produces an average 8 hours of electricity per day (at 100% of its capacity).

Answer rating: 100% (QA)

To calculate the smallest size of the PV system that will result in a simple payback period of 10 ye... View the full answer