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with an equal size unit of SEER value 12. The air‐conditioner is expected to operate for 5000 hr / yr. How
much less energy will new unit consume if the incremental cost of new unit is Rs 350,000. If you want to
recover this money in 10 years at a discount rate of 10% per year, what will be the cost of conserved
energy? What will be the feasibility of this project if the electricity tariff is Rs 12 / kWh?
Solution
Cooling capacity 10 10 12,000 120,000 /
Operating hours ∆ 5000 /
Discount rate = r = 10%
Number of years = n = 10
SEER 12 A/C: Cost of Conserved Energy (CCE)
∆ 120,000 5000
600 10 /
0.1627 350,000
⇒
25,000 /
600 10
5 10 1.19 /
12
5 10
Comment
SEER 8 A/C Since, CCE < electricity tariff, therefore this
project is feasible to install.
600 10
7.5 10
8
Annual energy saved
7.5 10 5 10
25,000 /
Savings in Bill
12 / 25,000 /
300,000 /
Capital Recovery Factor (CRF)
1
1 1
0.1 1 .01
1 0.1 1
0.1627
To save electricity on air‐conditioning in an office building located in Karachi, four energy efficiency
measures are under consideration. The details of the projects are given in the table below.
Energy Efficiency Measures Cost ($) Energy Conserved (kWh/year)
Roof insulation 1500 3200
Wall insulation 1800 3500
Efficient windows 1600 1100
Heat recovery from vent windows 1200 1800
If the office building is open for 12 hr/day, five days per week and cooling season is 8 months long, then
estimate the cost of conserved energy for each energy efficiency measure. Also draw energy
conservation supply curve and select the projects for implementation. Take project life as 25 years and
discount rate of 12% per year. Grid electricity rate is 10 cents/kWh.
Solution
Calculating CRF
1
0.1274 1600
1 1
1100
0.12 1.12
$ 0.1853
1.12 1
¢ 18.53 /
0.1274
CCE for 4th Project (Heat Recovery)
CCE for 1st Project (Roof Insulation)
0.1274 1200
0.1274 1500
1800
3200
$ 0.0849
$ 0.0597 /
¢ 8.49 /
¢ 5.97 /
CCE for 2nd Project (Wall Insulation)
0.1274 1800
3500
$ 0.0655
¢ 6.55 /