Reference no: EM132621352

Problem 1: An energy efficiency project is expected to save 10,000 kWh annually and 2 kW of demand. The cost of electricity is $0.10/kWh and $7/kW-month of demand. The energy efficiency project is expected to cost $5000 to implement and will last for 15 years. What is the simple payback of the project?

Problem 2:  A 20kW rated motor has an average loading of 75% of rated power and has an efficiency of 80%. The motor has a peak loading of 100% of rated power. The motor operates 1000 hours a year. The cost of electricity is $0.10/kWh and $7/kW-month of demand. Assume the motor operates at periods of peak demand at the facility (i.e. the motor power impacts the billing demand). An energy efficiency upgrade reduces the average power consumed to an average loading of 50% of rated power and reduces the peak power to 75% of rated power, but increases the operating hours to 1500 hours per year. There is no change in the efficiency of the motor after the upgrade. The cost of the energy efficiency project is $10,000. What is the annual electricity cost of running the motor before and after the energy efficiency upgrade? What is the simple payback of the project?