Alternative Energy VS. Conventional Energy Team 7 Mark Ponciano Aaron Poplar Maritza Robles

Business Details  Building Size: 4500 sq. ft.  Energy Consumption: 3600 kWh per month  Solar to provide 80% of energy needs  Business Life: 30 years

Energy Options 1. Use solely CONVENTIONAL ENERGY Southern California Edison Southern California Edison 2. Purchase SOLAR PANELS Loan Options Loan Options 10-year Loan10-year Loan 20-year Loan20-year Loan 30-year Loan30-year Loan

Conventional Energy Pros  No Installation Cost  Minimal Weather Dependence Cons  Larger Monthly Payments  Not as Environmentally Friendly  Blackout Potential

Solar Energy Pros  Lower Monthly Payments  Environmentally Friendly Cons  Large Initial Cost  Increased Maintenance  Weather Dependency

Initial Plan Details Annual Energy Consumption: kWh Conventional Cost Per KWh: $0.17 Consumption Increase Per Year: 2% Conventional Energy Cost Increase: 3% MARR: 10%

Solar System Size 80% Energy from Solar: kWh 20% Energy from Conventional: 8640 kWh Sun hours: 8 hrs/day Cushion: 10% Solar System Size: Watts/hr Installation Cost per Watt: $8.00

Rebates California Solar Incentive: $2.30 / Watt Government Rebate: 30% up to $2000 Initial Solar Installation Costs: $118,350 After Rebate: $86,105 Loan Interest Rate: 7%

Cash Flows

Initial Conditions Energy System EUAC Conventional$8,871 Solar: 10-year Loan $17,962 Solar: 20-year Loan $17,413 Solar: 30-year Loan $17,074

Loan Interest Rate Regardless of Loan Interest Rate, Conventional Wins.

System Size

Cost of Solar Panels Per Watt Intercept at Solar Panel Cost: $5.39

Usable Sunlight Average usable California Sun Hours: hours

Cost of Conventional Energy per kWh

Percent Increase of Conventional Energy per kWh Intercept at 10.25% Increase

Change in MARR Intercept at 1.3% MARR

Conclusion Select Conventional if… Solar Panel Cost is Great than $5.39 Solar Panel Cost is Great than $5.39 Annual Cost of Conventional does not Increase more than 10.25% Annual Cost of Conventional does not Increase more than 10.25% MARR is greater than 1.3% MARR is greater than 1.3%

Conclusion Select Solar if…. Solar Panel Cost Less than $5.39 Solar Panel Cost Less than $5.39 May sacrifice QualityMay sacrifice Quality Annual Percent Increase of Conventional Energy is greater than 10.25% Annual Percent Increase of Conventional Energy is greater than 10.25% Environmentally Conscious Regardless of Cost Environmentally Conscious Regardless of Cost