What would be the marginal rebate

Reference no: EM133389379

Assignment:

The government of Nova scotia has been providing rebates for household to install home solar pannels.

Mr. Bourgeois is considering installing solar panels on his roof but is unsure if it is worth it. Can you help him? You can? Great!

Some information about Mr. Bourgeois' home:

Current home consumption of electricity cost $1200 this year, and forceable consumption for the next 25 years.
Estimated total return on emera shares is approximatly 6% a year (share increase and dividend payment)

Your tasked to calculate the present value of two options:

Option 1: disburse $10,000 (original cost is 14,000, with 4,000 rebate) for a complete install of solar panels which would save the home owner $900 a year, for the next 25 years.

Option 2: keep paying for electricity, not install solar and purchase $10,000 worth of Emera shares.

Question:

1. Which option is better for Mr. Bourgeois and his family? Why (show all your work)

2. Given the options available to mr. Bourgeois, what would be the marginal rebate which the Government of Nova Scotia provide. Explain and show.

NOTE:

Disregard inflation
I will be using a present value. Use excel, there are numerous videos online as to how this is done if you are not sure. Excel has a formula for this.

Reference no: EM133389379

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