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Calculating the Minimum Amount of Grant

A university spent $1.8 million to install solar panels atop a parking garage. These panels will have a capacity of 500 kw, have a life expectancy of 20 years and suppose the discount rate is 10%.

a. If electricity can be purchased for costs of $0.10 per kwh, how many hours per year will the solar panels have to operate to make this project break even?

b. If efficient systems operate for 2,400 hours per year, would the project break even?

c. The university is seeking a grant to cover capital costs. How big of a grant would make this project worthwhile (to the university)?

Solution Preview

a. If electricity can be purchased for the cost of $0, 10 per kWh, how many hours per year will the solar panels have to operate to make this project break even?

Let solar panels operate x number of hours per year.
Energy produced per year=500*x=500x
Revenue saved per= ...

Solution Summary

Solution describes the steps to estimate the minimum amount of grant needed in the given case.

$2.19