Alternative EnergyAlternative EnergyVS.VS.

Conventional EnergyConventional EnergyTeam 7Team 7

Mark PoncianoMark PoncianoAaron PoplarAaron Poplar

Maritza RoblesMaritza Robles

Business DetailsBusiness Details

Building Size: Building Size: 4500 sq. ft. 4500 sq. ft.

Energy Consumption: Energy Consumption: 3600 kWh per month3600 kWh per month

Solar to provide Solar to provide 80% of energy needs80% of energy needs

Business Life: Business Life: 30 years30 years

Energy OptionsEnergy Options

1.1. Use solely Use solely CONVENTIONAL ENERGYCONVENTIONAL ENERGY• Southern California EdisonSouthern California Edison

2.2. Purchase Purchase SOLAR PANELSSOLAR PANELS

• Loan OptionsLoan Options

• 10-year Loan10-year Loan• 20-year Loan20-year Loan• 30-year Loan30-year Loan

Conventional EnergyConventional Energy

ProsPros No Installation CostNo Installation Cost Minimal Weather Minimal Weather

DependenceDependence

ConsCons Larger Monthly Larger Monthly

PaymentsPayments Not as Not as

Environmentally Environmentally FriendlyFriendly

Blackout PotentialBlackout Potential

Solar EnergySolar Energy

ProsPros Lower Monthly Lower Monthly

PaymentsPayments Environmentally Environmentally

FriendlyFriendly

ConsCons Large Initial CostLarge Initial Cost Increased Increased

MaintenanceMaintenance Weather DependencyWeather Dependency

Initial Plan DetailsInitial Plan Details

Annual Energy Consumption: Annual Energy Consumption: 43200 kWh43200 kWh

Conventional Cost Per KWh: Conventional Cost Per KWh: $0.17$0.17

Consumption Increase Per Year: Consumption Increase Per Year: 2%2%

Conventional Energy Cost Increase: Conventional Energy Cost Increase: 3%3%

MARR: MARR: 10%10%

Solar System SizeSolar System Size

80% Energy from Solar: 80% Energy from Solar: 34560 kWh34560 kWh

20% Energy from Conventional: 20% Energy from Conventional: 8640 kWh8640 kWh

Sun hours: Sun hours: 8 hrs/day8 hrs/day

Cushion: Cushion: 10%10%

Solar System Size: Solar System Size: 13150 Watts/hr13150 Watts/hr

Installation Cost per Watt: Installation Cost per Watt: $8.00$8.00

RebatesRebates

California Solar Incentive: California Solar Incentive: $2.30 / Watt$2.30 / Watt

Government Rebate: Government Rebate: 30% up to $200030% up to $2000

Initial Solar Installation Costs: Initial Solar Installation Costs: $118,350$118,350

After Rebate: After Rebate: $86,105$86,105

Loan Interest Rate: Loan Interest Rate: 7%7%

Cash FlowsCash Flows

Cash Flows From Year 1-30

2000

4000

6000

8000

10000

12000

14000

16000

18000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

Year

An

nu

al C

os

t

Conventional

10-year Loan

20-year Loan

30-year Loan

Initial ConditionsInitial Conditions

Energy SystemEnergy System EUACEUAC

ConventionalConventional $8,871$8,871

Solar: 10-year LoanSolar: 10-year Loan $17,962$17,962

Solar: 20-year LoanSolar: 20-year Loan $17,413$17,413

Solar: 30-year LoanSolar: 30-year Loan $17,074$17,074

Loan Interest RateLoan Interest Rate

Regardless of Loan Interest Rate, Conventional Wins.

System SizeSystem Size

Cost of Solar Panels Per WattCost of Solar Panels Per Watt

Intercept at Solar Panel Cost: $5.39

Usable SunlightUsable SunlightChange in Sun Hours

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5 10.0 10.5 11.0

Sun Hours

EU

AC

Conventional Energy

Solar: 10-yr Loan

Solar: 20-yr Loan

Solar: 30-yr Loan

Average usable California Sun Hours: 5.511 hours

Cost of Conventional Energy Cost of Conventional Energy per kWhper kWh

Percent Increase of Percent Increase of Conventional Energy per kWhConventional Energy per kWh

Intercept at 10.25% Increase

Change in MARRChange in MARR

Intercept at 1.3% MARR

ConclusionConclusion

Select Conventional if…Select Conventional if… Solar Panel Cost is Great than $5.39Solar Panel Cost is Great than $5.39

Annual Cost of Conventional does not Annual Cost of Conventional does not Increase more than 10.25% Increase more than 10.25%

MARR is greater than 1.3%MARR is greater than 1.3%

ConclusionConclusion

Select Solar if….Select Solar if…. Solar Panel Cost Less than $5.39Solar Panel Cost Less than $5.39

• May sacrifice QualityMay sacrifice Quality

Annual Percent Increase of Conventional Annual Percent Increase of Conventional Energy is greater than 10.25%Energy is greater than 10.25%

Environmentally Conscious Environmentally Conscious Regardless of CostRegardless of Cost