Payback - Revision history

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	<onlyinclude>When evaluating the viability of a new project, a firm will determine what the '''payback period''' of the project is, this is determined by comparing the cost of the initial investment with the annual returns from the project. By comparing these figures, a firm can determine how long it will take for an investment to yield the initial amount used to produce it.</onlyinclude><ref>Verbruggen, A., W. Moomaw, J. Nyboer, 2011: Annex I: Glossary, Acronyms, Chemical Symbols and Preﬁxes. In IPCC Special Report on Renewable Energy Sources and Climate Change Mitigation [O. Edenhofer, R. Pichs- Madruga, Y. Sokona, K. Seyboth, P. Matschoss, S. Kadner, T. Zwickel, P. Eickemeier, G. Hansen, S. Schlömer, C. von Stechow (eds)], Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA.</ref> The shorter the payback period, the more desirable the project is as the return of investment allows for further expansion.		<onlyinclude>When evaluating the viability of a new project, a firm will determine what the '''payback period''' of the project is, this is determined by comparing the cost of the initial investment with the annual returns from the project. By comparing these figures, a firm can determine how long it will take for an investment to yield the initial amount used to produce it.</onlyinclude><ref>Verbruggen, A., W. Moomaw, J. Nyboer, 2011: Annex I: Glossary, Acronyms, Chemical Symbols and Preﬁxes. In IPCC Special Report on Renewable Energy Sources and Climate Change Mitigation [O. Edenhofer, R. Pichs- Madruga, Y. Sokona, K. Seyboth, P. Matschoss, S. Kadner, T. Zwickel, P. Eickemeier, G. Hansen, S. Schlömer, C. von Stechow (eds)], Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA.</ref> The shorter the payback period, the more desirable the project is as the return of investment allows for further expansion.

	For example, if a firm builds a plant at a cost of $~~60m~~ and has a annual [[revenue]] flow of $~~11m~~ then:		For example, if a firm builds a plant at a cost of $60 million and has a annual [[revenue]] flow of $11 million then:
	::::::<math>\frac{Cost\ of\ Investment}{Annual\ Revenue\ Flow}</math> = <math>\frac{60\ m}{11\ m} = 5.45</math> years		::::::<math>\frac{Cost\ of\ Investment}{Annual\ Revenue\ Flow}</math> = <math>\frac{60\ m}{11\ m} = 5.45</math> years
	The payback period for an investment can apply to a firm with larger operations but it can also apply to individuals and the investments they make in their houses. For example, the while the cost for a [[ground source heat pump]] (GSHP) is initially more expensive, costing approximately 9-12% of construction cost of a house (compared to 5-6% with a conventional forced air system) it is estimated that the system has a payback period of 3-5 years.<ref>L. Kowalczyk and J. Piotrowski. ''Energy Costs, International Developments and New Directions''. New York: Nova Science Publishers Inc., 2009, pp. 151-152.</ref>		The payback period for an investment can apply to a firm with larger operations but it can also apply to individuals and the investments they make in their houses. For example, the while the cost for a [[ground source heat pump]] (GSHP) is initially more expensive, costing approximately 9-12% of construction cost of a house (compared to 5-6% with a conventional forced air system) it is estimated that the system has a payback period of 3-5 years.<ref>L. Kowalczyk and J. Piotrowski. ''Energy Costs, International Developments and New Directions''. New York: Nova Science Publishers Inc., 2009, pp. 151-152.</ref>
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	==References==		==References==
	{{reflist}}		{{reflist}}
			[[Category: Uploaded]]

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2017-08-29T01:47:24Z

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Jmdonev at 17:51, 17 August 2017

2017-08-17T17:51:29Z

← Older revision		Revision as of 17:51, 17 August 2017
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	<onlyinclude>When evaluating the viability of a new project, a firm will determine what the '''payback period''' of the project is, this is determined by comparing the cost of the initial investment with the annual returns from the project. By comparing these figures, a firm can determine how long it will take for an investment to yield the initial amount used to produce it.</onlyinclude><ref>Verbruggen, A., W. Moomaw, J. Nyboer, 2011: Annex I: Glossary, Acronyms, Chemical Symbols and Preﬁxes. In IPCC Special Report on Renewable Energy Sources and Climate Change Mitigation [O. Edenhofer, R. Pichs- Madruga, Y. Sokona, K. Seyboth, P. Matschoss, S. Kadner, T. Zwickel, P. Eickemeier, G. Hansen, S. Schlömer, C. von Stechow (eds)], Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA.</ref> The shorter the payback period, the more desirable the project is as the return of investment allows for further expansion.		<onlyinclude>When evaluating the viability of a new project, a firm will determine what the '''payback period''' of the project is, this is determined by comparing the cost of the initial investment with the annual returns from the project. By comparing these figures, a firm can determine how long it will take for an investment to yield the initial amount used to produce it.</onlyinclude><ref>Verbruggen, A., W. Moomaw, J. Nyboer, 2011: Annex I: Glossary, Acronyms, Chemical Symbols and Preﬁxes. In IPCC Special Report on Renewable Energy Sources and Climate Change Mitigation [O. Edenhofer, R. Pichs- Madruga, Y. Sokona, K. Seyboth, P. Matschoss, S. Kadner, T. Zwickel, P. Eickemeier, G. Hansen, S. Schlömer, C. von Stechow (eds)], Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA.</ref> The shorter the payback period, the more desirable the project is as the return of investment allows for further expansion.

	For example, if a firm builds a plant at a cost of $60m and has a annual [[revenue]] flow of $11m then:		For example, if a firm builds a plant at a cost of $60m and has a annual [[revenue]] flow of $11m then:
	::::::<m>\frac{Cost of Investment}{Annual Revenue Flow}</m> = <m>\frac{~~60m~~}{~~11m~~} = 5.45 ~~years~~</m>		::::::<math>\frac{Cost\ of\ Investment}{Annual\ Revenue\ Flow}</math> = <math>\frac{60\ m}{11\ m} = 5.45</math> years
	The payback period for an investment can apply to a firm with larger operations but it can also apply to individuals and the investments they make in their houses. For example, the while the cost for a [[ground source heat pump]] (GSHP) is initially more expensive, costing approximately 9-12% of construction cost of a house (compared to 5-6% with a conventional forced air system) it is estimated that the system has a payback period of 3-5 years.<ref>L. Kowalczyk and J. Piotrowski. ''Energy Costs, International Developments and New Directions''. New York: Nova Science Publishers Inc., 2009, pp. 151-152.</ref>		The payback period for an investment can apply to a firm with larger operations but it can also apply to individuals and the investments they make in their houses. For example, the while the cost for a [[ground source heat pump]] (GSHP) is initially more expensive, costing approximately 9-12% of construction cost of a house (compared to 5-6% with a conventional forced air system) it is estimated that the system has a payback period of 3-5 years.<ref>L. Kowalczyk and J. Piotrowski. ''Energy Costs, International Developments and New Directions''. New York: Nova Science Publishers Inc., 2009, pp. 151-152.</ref>

	In the case of a GSHP there is no revenue generated so instead, the cost would be divided by the annual savings from not having to pay for residential heating. If a household saves $1,300 per year with the GSHP then the payback period is:		In the case of a GSHP there is no revenue generated so instead, the cost would be divided by the annual savings from not having to pay for residential heating. If a household saves $1,300 per year with the GSHP then the payback period is:
	::::::<m>\frac{Cost of GSHP}{Annual Savings}</m> = <m>\frac{4,500}{1,300} = 3.46 ~~years~~</m>		::::::<math>\frac{Cost\ of\ GSHP}{Annual\ Savings}</math> = <math>\frac{4,500}{1,300} = 3.46 </math> years

	==Energy Payback Time==		==Energy Payback Time==
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	For Solar Photovoltaic Power Plant" ''International Journal of Chemical Sciences'', 12, pp. 302.</ref>		For Solar Photovoltaic Power Plant" ''International Journal of Chemical Sciences'', 12, pp. 302.</ref>

	::::::<m>\frac{Energy Used By The Solar Plant}{Energy Generation Per Year}</m> = <m>\frac{48.83}{22.80} = 2.14 ~~years~~</m>		::::::<math>\frac{Energy\ Used\ By\ The\ Solar\ Plant}{Energy\ Generation\ Per\ Year}</math> = <math>\frac{48.83}{22.80} = 2.14</math> years

	It will take 2.14 years for the solar power system to produce the same amount of energy that was used to assemble it.		It will take 2.14 years for the solar power system to produce the same amount of energy that was used to assemble it.

	==Energy Return on Investment==		==Energy Return on Investment==
	The '''[[energy return on investment]]''' ([[EROI]]) is the amount of energy that a system produces divided by the amount of energy it took to produce that output:<ref>~~Investopedia~~. "Energy ~~Return On Investment~~.~~" [~~Online~~], Available~~: http://www.~~investopedia~~.com/~~terms~~/e/~~energy-return-on-investment.asp [Sep 1~~, ~~2016]~~.</ref>		The '''[[energy return on investment]]''' ([[EROI]]) is the amount of energy that a system produces divided by the amount of energy it took to produce that output:<ref>"EROI of different fuels and the implications for society" by Hall, Lambert and Balogh. Energy Policy Volume 64, January 2014. Online: http://www.sciencedirect.com/science/article/pii/S0301421513003856 Accessed August 17th, 2017.</ref>

	::::::EROI= <m>\frac{Energy Output}{Energy Input}</m>		::::::EROI= <math>\frac{Energy \ Output}{Energy \ Input}</math>

	EROI is expressed as a ratio. For example, If a project has an EROI of 10:1 it produces 10 joules of energy for every 1 joule put into the production.		EROI is expressed as a ratio. For example, If a project has an EROI of 10:1 it produces 10 joules of energy for every 1 joule put into the production.

Jmdonev: 1 revision imported: From the summer

2016-09-17T22:29:56Z

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Jmdonev at 19:29, 4 September 2016

2016-09-04T19:29:01Z

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[[Category:Done 2016-04-30]]
<onlyinclude>When evaluating the viability of a new project, a firm will determine what the '''payback period''' of the project is, this is determined by comparing the cost of the initial investment with the annual returns from the project. By comparing these figures, a firm can determine how long it will take for an investment to yield the initial amount used to produce it.</onlyinclude><ref>Verbruggen, A., W. Moomaw, J. Nyboer, 2011: Annex I: Glossary, Acronyms, Chemical Symbols and Preﬁxes. In IPCC Special Report on Renewable Energy Sources and Climate Change Mitigation [O. Edenhofer, R. Pichs- Madruga, Y. Sokona, K. Seyboth, P. Matschoss, S. Kadner, T. Zwickel, P. Eickemeier, G. Hansen, S. Schlömer, C. von Stechow (eds)], Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA.</ref> The shorter the payback period, the more desirable the project is as the return of investment allows for further expansion.

For example, if a firm builds a plant at a cost of $60m and has a annual [[revenue]] flow of $11m then:
::::::<m>\frac{Cost of Investment}{Annual Revenue Flow}</m> = <m>\frac{60m}{11m} = 5.45 years</m>
The payback period for an investment can apply to a firm with larger operations but it can also apply to individuals and the investments they make in their houses. For example, the while the cost for a [[ground source heat pump]] (GSHP) is initially more expensive, costing approximately 9-12% of construction cost of a house (compared to 5-6% with a conventional forced air system) it is estimated that the system has a payback period of 3-5 years.<ref>L. Kowalczyk and J. Piotrowski. ''Energy Costs, International Developments and New Directions''. New York: Nova Science Publishers Inc., 2009, pp. 151-152.</ref>

In the case of a GSHP there is no revenue generated so instead, the cost would be divided by the annual savings from not having to pay for residential heating. If a household saves $1,300 per year with the GSHP then the payback period is:
::::::<m>\frac{Cost of GSHP}{Annual Savings}</m> = <m>\frac{4,500}{1,300} = 3.46 years</m>

==Energy Payback Time==
The '''Energy Payback Time''' or '''EPBT''' is the amount of time it takes for an energy system to generate the amount of energy equivalent to the amount that took to produce the system.<ref>A. Sayigh. ''Comprehensive Renewable Energy''. Amsterdam: Elsevier Ltd., 2012, pp. 38.</ref>

For example, an 11 kW solar plant that produces 22.8MWh per year with a lifetime total of 570MWh, uses is 48.83 MWh to do so. To find the EPBT:<ref>C. Marimuthu, V. KirUubakarana and R. Rajasekaran. "Energy Payback Period and Carbon Payback Period
For Solar Photovoltaic Power Plant" ''International Journal of Chemical Sciences'', 12, pp. 302.</ref>

::::::<m>\frac{Energy Used By The Solar Plant}{Energy Generation Per Year}</m> = <m>\frac{48.83}{22.80} = 2.14 years</m>

It will take 2.14 years for the solar power system to produce the same amount of energy that was used to assemble it.

==Energy Return on Investment==
The '''[[energy return on investment]]''' ([[EROI]]) is the amount of energy that a system produces divided by the amount of energy it took to produce that output:<ref>Investopedia. "Energy Return On Investment." [Online], Available: http://www.investopedia.com/terms/e/energy-return-on-investment.asp [Sep 1, 2016].</ref>

::::::EROI= <m>\frac{Energy Output}{Energy Input}</m>

EROI is expressed as a ratio. For example, If a project has an EROI of 10:1 it produces 10 joules of energy for every 1 joule put into the production.

Different types of renewable energy systems yield different EROIs. For example, [[hydroelectricity | hydroelectric]] projects have an EROI of more than 100:1 whereas [[photovoltaic cell]]s have an EROI of 6.8:1 and [[wind turbine]]s have an EROI of 18:1.<ref>D. Murphy and C. Hall. "Year in review—EROI or energy return on (energy) invested." [Online], Available: http://onlinelibrary.wiley.com/doi/10.1111/j.1749-6632.2009.05282.x/full, Jan 29, 2010 [Sep 1, 2016]/</ref>

==References==
{{reflist}}