Consider a PV solar power project with the following parameters: â€¢ Initial cost: $18M for hardware +...

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Consider a PV solar power project with the followingparameters:
â€¢ Initial cost: $18M for hardware + $14M for installation.
â€¢ The yearly energy produced is 24 millions kWh which will bringan income of $2.9M per year
â€¢ $0.5M per year is used for operation and maintenance.
â€¢ At the end of the 25 year time horizon, a net expenditure of$1M will be required for removal and site cleaning.
â€¢ The MARR is 7%.
a) Calculate the NPV for this investment.
b) Recalculate the NPV, this time assuming that an investmenttax credit of 20% for hardware and 10% for installation costs areavailable.
c) Calculate the IRR for this investment (with taxincentive).
d) Calculate the levelized cost of energy (with taxincentive)

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4.1 Ratings (688 Votes)

Answer a Calculation of NPV PV of net cash inflow PV of net cash outflow 2797 3218 421 M Cash flow Income per year Operating cost 29 05 24 per year PV factor for 25 years 11rn1 11rn2 116534 See Answer

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