Energy Efficiency Cost-Effectiveness Test
Cost-effectiveness for energy efficiency projects can be undertaken from at least five perspectives: participants (energy end users), energy utility, total customer of the utility, total customer and the utility together, and the society or the economy. The mathematical formulas to calculate the costs and benefits for the five tests are very similar, but some of the parameters have different meanings. In all cases, it is necessary to calculate net present value of a project over lifetime. This chapter presents basic formula for energy efficiency cost-effectiveness test from the perspective of participants or energy end users.
KeywordsEnergy Efficiency Discount Rate Payback Period Capital Budget Energy Efficiency Program
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