Economic aspects of energy management
Many of the decisions made by a business are regard to energy conservation involve economic analysis. Business must make decisions that are ecumenically beneficial. The purchase of equipment or modification that results in energy conservation must be profitable long term investments.
3413 Btu/Kilowatt hour
1000 Btu/cubic foot
26 million Btu/short ton
21500 Btu/ pound
SIMPLE PAY BACK PERIOD
Pay back period can be estimated to determine the feasibility of making a capital investment that Will provide energy saving, simple payback period s an indication of the amount of time it will take for an organization to recover the cost of an energy saving investment which is purchased. The formula for estimating simple pay back period is:
Payback Period = Cost of improvement (Rs)
Average Yearly Saving (Rs)
For example , if adding insulation to ceiling at a cost of Rs 2000/- is expected to provide a Rs. 1000/- saving each year, the simple payback pay for itself in a 2 year period.