Development of Customized Formulae for Feasibility and Break-Even Analysis of Domestic Solar Water Heater

Abstract

In this present paper, individual formulae have been developed to calculate the output variables such as: Discounted Payback Period, Net Present Value, and Benefit-Cost Ratio for a domestic solar water heater. A spread sheet based financial model has been developed and using secondary data from various published sources, these output variables have been calculated. Further for discounted cash flow based break-even analysis, separate formula has been designed for each of six input variables such as water inlet temperature, annual number of days of usage, capital cost, maintenance cost, volume of hot water required and fuel price. In depth sensitivity analysis has been carried out to understand effect of various input variables on above three mentioned output variables. The outcome from financial model, break-even analysis clearly showed that domestic solar water heater is a feasible option for east-coastal region of India. People need to be persuaded about this fact and motivated to invest on it in a large scale. This simple step has far reaching implication to address the energy crisis in present situation.