What is a cost-benefit analysis for energy efficiency projects?

What is a cost-benefit analysis for energy efficiency projects?

A cost-benefit analysis (CBA) evaluates the financial feasibility of energy efficiency projects by comparing costs and benefits.

What factors should I consider in a CBA for energy efficiency?

Key factors include initial investment, energy savings, maintenance costs, and potential incentives or rebates.

Can you give me an example of a cost-benefit analysis?

Sure! For instance, if a company invests $10,000 in energy-efficient lighting, and saves $2,000 annually, the payback period is 5 years.

How do I calculate the net present value (NPV) in this analysis?

To calculate NPV, discount future cash flows from energy savings back to present value and subtract the initial investment.

What are some common mistakes in conducting a CBA?

Common mistakes include underestimating costs, ignoring non-monetary benefits, and failing to account for future energy price increases.