Energy FinAnswer Incentive Calculation
An example retrofit incentive calculation:
Compressed air energy efficiency project: Savings is 300,000 kwh/yr and 40 kW/month ($10,300/yr); cost of compressed air upgrades is $60,000
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Step 1 |
Adjust any lighting measures if lighting savings exceeds 50% of total savings |
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Step 2 |
Calculate incentive Lesser of (a) and (b) is $30,000 |
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Step 3 |
Check simple payback for whole project, determine incentive Payback including incentive = (cost of upgrades - incentive)/annual electric cost savings = ($60,000 - 30,000)/$10,300 = 2.9 years Payback including incentive is greater than one year, so incentive is $30,000 |
