To evaluate the economic feasibility of energy efficiency or renewable energy upgrades, a variety of tests are used such as payback period, cost-benefit ratio, and return on investment. All of these tests require an estimate of the capital cost of the upgrade. However, it is not always possible to reliably estimate the capital cost of a potential energy upgrade. To deal with such situations, an alternative approach is proposed that involves the calculation of the tolerable capital cost (TCC) of the upgrade. The use of the TCC approach to evaluate economic feasibility is demonstrated with a case study involving photovoltaic panel installations in Canadian houses.

Economic analysis, Economic feasibility, Energy efficiency, Photovoltaic system, Renewable energy, Tolerable capital cost
dx.doi.org/10.1061/(ASCE)EY.1943-7897.0000203
Journal of Energy Engineering
Department of Mechanical and Aerospace Engineering

Nikoofard, S. (Sara), Ugursal, V.I. (V. Ismet), & Beausoleil-Morrison, I. (2015). Economic analysis of energy upgrades based on tolerable capital cost. Journal of Energy Engineering, 141(3). doi:10.1061/(ASCE)EY.1943-7897.0000203