Pro Forma Model based on Lighting Projection 1. Taxes are applied to avoided costs 2. Annual energy increase is assumed to be 3 percent (see cell M12) 3. Federal marginal tax rates of 35% are assumed (cell B21)
Assumptions Lighting Investment (Gross) Duke Rebate per Fixture x # of Fixtures
=Duke Rebate
Min of Allowable and Investment x Federal Tax Rate
= 2005 Energy Policy Act Deduction
= Lighting Investment (Net Incentives)
Pro Forma Analysis
Standard Energy Use
$50.00 938 $46,900
Hours per Day (6 am - 12 am) x Days Per Week (Mon-Sat) x Weeks per Year Hours of Operation per Year
330,000 $0.60 $198,000 $198,000 35% $69,300
Area of warehouse in sqft x Per sqft deduction = Allowable Deduction
Lighting Investment (Gross) + Duke Rebate + 2005 Energy Policy Act Deduction
$211,473
$ $ $
Watts per unit /Watts per kW x Units = Kilowatts per hour Hours of Operation kW per hour = kW consumed
$211,473 (46,900) (69,300) 95,273 (A)
Year 0
Energy Avoided, yr. 1 (kWh/year)
Year 1
Year 2
Year 3
Investment Upgrade Cost Net of Incentives (A) running costs Avoided Costs Avoided energy costs (B * C) Avoided cost of carbon credits Tax on avoided cost Total Avoided Costs
$95,273 150000
$0 $0 $0 $0
Cash Flow Cumulative cash flow
($245,273) ($245,273)
Annual Discount Rate NPV Net Price per Ton
10% $334,057 ($9.21)
IRR (no residual value) 5 year 7 year 10 year 20 year
Tons of carbon avoided $ per ton of carbon pre incentive Avoided cost of carbon credits
0 0 0 31361.894928 31361.89493 31361.89493
$120,896 $10,574 ($46,014) $85,455
$54,094 ($191,179)
$124,523 $10,574 ($47,284) $87,813
$56,451 ($134,729)
$128,259 $10,574 ($48,591) $90,241
$58,879 ($75,849)
6% 22% 25% 26%
1,813 Tons 5.8307 $/ ton 10573.65 $/ year
Instruction for students: 1. Overall, determine and fill-in the values for each of the shaded cells in light blue 2. First, determine the total net lighting investment (item A) or net capital expenditures for this project by completing cells B11, B13, B14, B17 an
3. Second, determine the energy avoided in electrical use between the old system and the new system by completing cells G12, G13, G14, and G1 4. Third, determine the savings from energy avoidance in kilowatts per hour by completing cell M11(item B) and inserting the annual cost avoidanc 5. Then use the Excel spreadsheet to a) calculate the NPV at 10% and b) the IRR at 5 year, 7 year, 10 year and 20 year intervals.
Old System New System
18 6 52
9 6 52
5,616
2,808
456 1,000
147 1,000
938 428
938 138
5,616 428 2,402,120
2,808 138 387,184
am - 12 am)
d, yr. 1 (kWh/year)
Year 4
Carbon per kWh from grid (pounds) / pounds per ton x Energy Avoided per Year (kWh/year) x Years of Operation = Tons of Carbon Avoided/ 20 years Lighting Investment (Gross) / Tons of Carbon Avoided =$ per ton of Carbon Pre Incentive Lighting Investment (Net Incentives) / Tons of Carbon Avoided =$ per ton of Carbon Post Incentive
2,014,937
Year 5
Year 6
$0.06 (B) 3.0%
Year 1 avoided energy cost/kWh Annual energy cost increase
Year 7
Year 8
Year 9
Year 10
1.8 2,000 2,014,937 (C)
20 36,269
1813.442904
$211,473 36,269
$5.83 $95,273 36,269
$2.63
Year 11
Year 12
0 0 0 0 0 0 0 0 0 31361.89493 31361.89493 31361.89493 31361.89493 31361.89493 31361.89493 31361.89493 31361.89493 31361.89493
$132,107 $10,574 ($49,938)
$136,070 $10,574 ($51,325)
$140,152 $10,574 ($52,754)
$144,356 $10,574 ($54,226)
$148,687 $10,574 ($55,741)
$153,148 $10,574 ($57,302)
$157,742 $10,574 ($58,911)
$162,474 $10,574 ($60,567)
$167,349 $10,574 ($62,273)
$92,742
$95,318
$97,972
$100,705
$103,519
$106,419
$109,405
$112,481
$115,649
$61,380 ($14,469)
$63,956 $49,487
$66,610 $116,097
$69,343 $185,439
$72,158 $257,597
$75,057 $332,654
$78,043 $410,697
$81,119 $491,817
$84,288 $576,104
lls B11, B13, B14, B17 and B18. Note that the rebates help reduce the total lighting investment.
lls G12, G13, G14, and G17 (old system) and cells H12, H13, H14 and H17 (old system). This will calculate the annual avoided cost in total kilowatts /year (it g the annual cost avoidance in kilowatts/ year (item C) into cell M17
51133
Year 13
Year 14
Year 15
Year 16
Year 17
Year 18
Year 19
Year 20
0 0 0 0 0 0 0 0 31361.89493 31361.89493 31361.89493 31361.89493 31361.89493 31361.89493 31361.89493 31361.89493
$172,369 $10,574 ($64,030)
$177,540 $10,574 ($65,840)
$182,866 $10,574 ($67,704)
$188,352 $10,574 ($69,624)
$194,003 $10,574 ($71,602)
$199,823 $10,574 ($73,639)
$205,818 $10,574 ($75,737)
$211,992 $10,574 ($77,898)
$118,913
$122,274
$125,736
$129,302
$132,975
$136,758
$140,654
$144,668
$87,551 $663,655
$90,912 $754,567
$94,374 $848,941
$97,940 $946,881
$101,613 $1,048,494
$105,396 $1,153,890
$109,292 $1,263,183
$113,306 $1,376,488
n total kilowatts /year (item C)
0.081
