Abstract
This chapter provides an overview of economic costing methods to evaluate investments in solar energy and conservation systems. Solar energy systems and energy conservation systems have the same goals, that is, to reduce the consumption of conventional fuels. They also both require an initial capital investment to conserve energy and reduce fuel costs in the future. Economic analysis of solar energy systems and energy conservation systems should be carried out simultaneously to arrive at the optimum energy savings strategy. The chapter discusses life cycle costing, which is a method of economic evaluation by which all relevant costs over the life of a project are accounted for to determine the economic efficiency of the project. It is thus a suitable method for evaluating the economic feasibility of projects such as energy conservation or solar energy that realize their benefits primarily through fuel cost savings.
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