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Costs and Determining Payback
Comparing Costs and Determining Payback
Once
you know the purchase and annual operating costs of the solar water
heating systems you want to compare, you can find the costs
associated with conventional water heating systems
and compare the two.
Use
the table and calculations below to compare two solar water heating
systems and determine the cost savings and payback of the more
energyefficient system model.
System
Models

System
Price

SEF

Estimated
Annual Operating Cost

System
Model A




System
Model B (higher SEF)




Additional
cost of more efficient system model (Model B)



Price
of System Model B  Price of System Model A = $Additional Cost of
Model B

Estimated
annual operating cost savings (System Model B)



System
Model B Annual Operating Cost  System Model A Annual Operating
Cost = $Model B's Cost Savings Per Year

Payback
period for Model B



$Additional
Cost of Model B/$Model B's Cost Savings Per Year = Payback
period/years

Example:
Comparison
of two solar water heating system models with electric backup systems
and electricity costs of $0.08/kWh.
System
Models

System
Price

SEF

Estimated
Annual Operating Cost

System
Model A

$1,060

2.0

$176

System
Model B

$1,145

2.9

$121

Additional
cost of more efficient model (Model B)



$1,145$1,060
= $85

Estimated
annual operating cost savings (Model B)



$176$120
= $56 per year

Payback
period for Model B



$85/$56
per year = 1.5 years

