Opened 3 years ago

Last modified 2 years ago

#1006 new bug

negative AERC for short analysis periods

Reported by: ewilson Owned by: shorowit
Priority: normal Component: Economics/Costs
Version: 3.0.0.0 Keywords:
Cc: shorowit, cchriste

Description

In the BEopt 2.4 release, I am getting very large negative values for AERC if I use a 1 year analysis period. I thought this might be because the residual loan amount is not accounted for, but this happens even if the payment is set to "cash".

It looks like this might be caused by a sign error on PV costs. Other initial costs look more normal.

Attachments (6)

"analysis period = 1 year (237.6 KB) - added by ewilson 3 years ago.
"analysis period = 1 year.2 (254.2 KB) - added by ewilson 3 years ago.
"analysis period = 2 years (234.1 KB) - added by ewilson 3 years ago.
analysis period = 1 year, financed with loan.png (237.6 KB) - added by ewilson 3 years ago.
analysis period = 1 year, cash payment.png (254.2 KB) - added by ewilson 3 years ago.
analysis period = 2 years, cash payment.png (234.1 KB) - added by ewilson 3 years ago.

Download all attachments as: .zip

Change History (12)

Changed 3 years ago by ewilson

Changed 3 years ago by ewilson

Changed 3 years ago by ewilson

Changed 3 years ago by ewilson

Changed 3 years ago by ewilson

comment:1 Changed 3 years ago by ewilson

You can ignore/delete those first three attachments.

comment:2 Changed 3 years ago by shorowit

If you click on an attachment (the link, not the download icon), there is a button to delete the attachment.

comment:3 Changed 3 years ago by shorowit

The "issue" for PV is that there is a federal tax credit. When you have a short analysis period, you get the full tax credit (30% of capital cost) immediately for the entire system. At the same time, while you pay for the entire PV system immediately as well, you get ~90% residual value on that payment in a year or two. So when your analysis period is small, the tax credit is much larger than the payment you've made toward your PV system.

comment:4 Changed 3 years ago by ewilson

That makes sense.

When the load period exceeds the analysis period, shouldn't we be including the residual value (outstanding payments) of the loan in the AERC?

comment:5 Changed 3 years ago by ewilson

It is a bit strange that the residual value is larger than the after-tax-credit installed cost. In reality, you wouldn't be able to turn around and sell the system for higher than the after-tax-credit installed cost.

Are we sure that there residual value is supposed to be pre-incentive? The NIST reference just says "the 'value in place' of a component with remaining life at the end of the analysis period is calculated by linearly prorating its initial cost according to the equation..."

comment:6 Changed 2 years ago by shorowit

  • Version changed from 2.5.0.0 to 2.6.0.0
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