Page 182 - Sustainable Cities and Communities Design Handbook

156 Sustainable Cities and Communities Design Handbook

TABLE 8.3 Financial Analysisdcont’d
Net Benefit (i.e., Savings)

Pay Back Internal Rate Net Present
Year Period ($) of Return (%) Value ($)
28 297,545 29.49 93,178
29 335,721 29.63 102,453
30 374,846 29.73 111,505

Consideration of Externalities

Beyond consideration of payback and NPV analyses, there are both qualitative
and quantitative externalities involved with PV systems that must be consid-
ered in a complete financial analysis. Quantitative benefits to the entity
operating the PV system include possible employee health care savings as a
result of a cleaner environment.
Qualitative externalities include reduction of pollution and GHG emis-
sions, and reduced dependency on utility providers as well as control over
energy-price volatility for the campuses by eliminating that cost entirely.
In addition, PV systems can provide power during traditional power outages,
whether due to natural disasters or any other reason. Finally, there is
virtually no maintenance cost associated with PV systems, with long-term
reliability of 25e40 years. Table 8.4 presents a hypothetical analysis of
externality factors to provide a quantitative concept of the effect of exter-
nalities on NPV.

TABLE 8.4 Externality Factors
Financial Analysis
Net present value (NPV) at year 30 $111,505
Add
NPV of health care costs savings a $30,000
NPV of savings with externalities $141,505
a
For illustrative purposes only.