1042 CHP Financing

CHP projects generally are financed with a mixture of internal funds and debt financing. Because of this, CHP decision makers use conservative metrics (such as very short payback) before they are willing to invest. This conservatism may be due to their limited ability to borrow to finance CHP projects, or because they have limited investment funds. It also allows for risk that the future savings will not be realized.

Sometimes, leasing arrangements are developed that eliminate the need for the site customer to come up with initial investment funds for the project, relying instead on third parties to own the system and take a portion of the benefits. For these types of projects, it is common for some kind of discounted cash flow analysis to be conducted. Here again, decision makers may protect themselves from risk by setting high hurdle rates for

FIGURE 10.6

Cost trajectories for DG technologies applicable to CHP systems.

FIGURE 10.6

Cost trajectories for DG technologies applicable to CHP systems.

FIGURE 10.7

NOx-related emissions reductions with CHP. (Source: (1) GRI Report Light Duty Vehicle Full Fuel Cycle Emissions Analysis, 1994; (2) Gas Turbine Environmental Analysis and Policy Considerations, Onsite Energy, 1997; (3) Sierra Energy and Risk Assessment, SoCalGas UEG Customer End-Use Specific Avoided Energy GT&D Costs and Emissions, 1997.)

FIGURE 10.7

NOx-related emissions reductions with CHP. (Source: (1) GRI Report Light Duty Vehicle Full Fuel Cycle Emissions Analysis, 1994; (2) Gas Turbine Environmental Analysis and Policy Considerations, Onsite Energy, 1997; (3) Sierra Energy and Risk Assessment, SoCalGas UEG Customer End-Use Specific Avoided Energy GT&D Costs and Emissions, 1997.)

the analysis. Thus, decision makers' perceptions of risk are an important element of what is considered an economic investment.

Solar Stirling Engine Basics Explained

Solar Stirling Engine Basics Explained

The solar Stirling engine is progressively becoming a viable alternative to solar panels for its higher efficiency. Stirling engines might be the best way to harvest the power provided by the sun. This is an easy-to-understand explanation of how Stirling engines work, the different types, and why they are more efficient than steam engines.

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