Page 209 - Sustainable Cities and Communities Design Handbook
P. 209

Life Cycle Analysis Chapter j 10 183


             diverse views of stakeholders before adopting externality values and policy
             rules, which are an integral part of the cost-effectiveness evaluation.


             PARTICIPANT TEST
             Definition

             The Participant Test is the measure of the quantifiable benefits and costs to the
             customer due to participation in a program. Since many customers do not base
             their decision to participate in a program entirely on quantifiable variables, this
             test cannot be a complete measure of the benefits and costs of a program to a
             customer.

             Benefits and Costs

             The benefits of participation in a demand-side program include a reduction in
             the customer’s utility bill(s), any incentive paid by the utility or other third
             parties, and any federal, state, or local tax credit received. The reductions to
             the utility bill(s) should be calculated using the actual retail rates that would
             have been charged for the energy service provided (electric demand or energy
             or gas). Savings estimates should be based on gross savings, as opposed to net
             energy savings (refer to point 1 in Notes).
                In the case of fuel substitution programs, benefits to the participant also
             include the avoided capital and operating costs of the equipment/appliance not
             chosen. For load building programs, participant benefits include an increase in
             productivity and/or service, which is presumably equal to or greater than the
             productivity/service without participating. The inclusion of these benefits is
             not required for this test, but if they are included then the Societal Test should
             also be performed.
                The costs to a customer of program participation are all out-of-pocket
             expenses incurred as a result of participating in a program, plus any increases
             in the customer’s utility bill(s). The out-of-pocket expenses include the cost of
             any equipment or materials purchased, including sales tax and installation; any
             ongoing operation and maintenance costs; any removal costs (less salvage
             value); and the value of the customer’s time in arranging for the installation of
             the measure, if significant.

             How the Results Can Be Expressed

             The results of this test can be expressed in four ways: through a net present
             value per average participant (NPV avp ), a NPV for the total program, a
             benefitecost ratio (BCR), or discounted payback. The primary means of
             expressing test results is the NPV for the total program; discounted payback,
             BCR, and per participant NPV avp are secondary tests.
   204   205   206   207   208   209   210   211   212   213   214