Question: Green Futures operates a solar panel power generation facility in Scottsboro, Alabama. The current field generates 15 million kilowatt-hours per year, but every year production
Green Futures operates a solar panel power generation facility in Scottsboro, Alabama. The current field generates 15 million kilowatt-hours per year, but every year production drops off by 1 million kilowatt-hours, as dust and droppings accumulate on the panels. Replacing the panels right now with the newest technology panels will increase output to 25 million kilowatt-hours, which will then also drop off by 1 million kilowatt-hours per year. A new set of panels costs $1.2 million installed. In two years, an even newer panel will be available, with 30 million kilowatts output for only $1 million installed, these drop off in power each year just like the other panels. Green Futures sells electricity for $0.10 per kilowatt-hour. When should the panels be upgraded Analyze for the next 10 years using a discount rate of 17%.
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