Payback Period

For co-fired biomass a simple payback period was calculated instead of a levelized COE. As a retrofit opportunity , co-firing will be pursued by plant owners only if paybacks of a few years can be achieved. Simple Payback is define d as total capital investment divided by annual energy savings, to obtain years until payback. In simple payback, n o consideration is given to the time value of money and no discount rates are applied to dollar values in future years. I n the co-fire analyses, the simple payback is defined by comparing capital expenditures required for the retrofit with fuel cost and other savings. As an example, the technology described in the biomass co-fire technology characterizatio n yields a 4.1-year payback in 2000.

n Property tax exemption

□ 1.5 cents/kWh tax credit n Tax-free debt

® Tax-free equity

Tax Incentive Options

n Property tax exemption

□ 1.5 cents/kWh tax credit n Tax-free debt

® Tax-free equity

Tax Incentive Options

Reference: Nathan, N.H., and R.A. Chapman, Tax Equity - Solar Electric Power Plants, National Power Company, Oakland, CA, for the California Energy Commission: 1994.

Appendix A: ENERGY STORAGE TECHNOLOGIES

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