Alice is approached by Slick Sam with a proposal: I will provide you with a 5KW

Question

Alice is approached by Slick Sam with a proposal: I will provide you with a 5KW solar cell system FREE. (no upfront cost) You just have to pay me 12cents/kwhr for the next 20 years. The prevailing rate from the utility is an average of 14cents/kwhr. Cells cost 60cents/watt. and assume an installation cost of $500 for a 5kw system. Should Alice accept Slick's proposal? Justify your answer. 1. Estimate how much electricity a 1 watt cell will provide in one year? 2. How much value will a 5KW system produce in one year? 3. How much value will a 5KW system provide in 20 years? 4. Compare with Slick's proposition.

Explanation / Answer

1. Energy = power x time

= (1 watt) (365 x 24 hr)

= 8760 W h

= 8.76 kWhr

2. by 5KW => E = (5000 watt) (8.76 kWh / watt )

= 43800 kWh   
  
cost of 1 kWh = 0.14 x 43800

= 6132 dollars

3. IN 20 years = 6132 x 20 = 122640 Dollars

4. total cost using Slick's prposition,

cost = (0.60 x 5000) + (500) + (0.12 x 43800 x 20 )

= 3000 + 500 + 105120

= 108620 dollars

benefit = 122640 - 108620 = 14020 dollars

hence Alice should accept the Slick's offer/

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