Calculate the levelized cost of the saved energy

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Reference no: EM131148684

A factory uses 700 40W standard fluorescent lamps for its lighting. The lamps are to be replaced by 34/W high-efficiency lamps that can operate on the existing standard ballasts. The standard and high-efficiency fluorescent lamps cost $1.80 and $2.50 each, respectively. The factory operates 3,000 hours/year and all of the lamps operate during that period. Assuming the unit cost of electricity is 6 cents/kWh and the ballasts consume 10% of the rated power of the lamps, calculate how much energy and how much money will be saved as a result of switching to the high-efficiency fluorescent lamps. Then, estimate the payback period assuming an interest rate of 6% and an inflation rate of 3%. Finally, calculate the levelized cost of the saved energy assuming the lamps last for two years.

Reference no: EM131148684

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