Energy FinAnswer Incentive Calculation
An example retrofit incentive calculation:
Compressed air energy efficiency project: Savings is 300,000 kwh/yr and 40 kW/month ($14,100/yr); cost of compressed air upgrades is $60,000
|
Step 1 |
Adjust any lighting measures if lighting savings exceeds 50% of total savings |
|
Step 2 |
Calculate incentive Lesser of (a) and (b) is $36,000 |
|
Step 3 |
Check simple payback for whole project, determine incentive Payback including incentive = (cost of upgrades - incentive)/annual electric cost savings = ($60,000 - 36,000)/$14,100 = 1.7 years Payback including incentive is greater than one year, so incentive is $36,000 |
