Keywords: cost benefit ratio, DCF, discounted cash flow, NPV, net present value, solar water heating, solar energy, solar power, hot water costs, internal rate of return, IRR, payback period
Solar water cost and feasibility of solar water heating system
The present research work has been carried out on 1,000 litre installed capacity solar water heating system, at Jijau Hostel, Dr Panjabrao Deshmukh Agricultural University (PDKV), Akola, Maharashtra, India. The main objectives were to evaluate various costs and benefits involved in the solar water production. The costs of hot water production per litre with comparison to electrical energy were calculated for the first year of operation. The economics of solar water and thereby the feasibility of the system was examined by estimating per litre cost of water, Net Present Value, Benefit Cost Ratio (BCR), Internal Rate of Return (IRR) and payback period. The Discounted Cash Flow method was used to find out the IRR. In the present analysis, three costs viz., Installed Capital Cost, solar capital cost and cost of solar water, were examined for the evaluation of the production cost of water. Considering the discount rate on the investment for the system as 5%, the BCR ratio comes to 3.08 and IRR comes to 57%. The payback period of the solar water system was observed to be approximately 2 years.