Q. Define and explain the procedure to calculate the payback period. Also, state its significance.
It is the time required for an energy efficient method to cover its purchase, installation and running cost.
OR
Payback period is the time required to recover the funds invested in a project.
Procedure of Payback period :
First initial cost of energy conservation device
Payback period = —--------------------------------------------------------
Annual Saving of energy in amount
First initial cost of energy conservation device = Additional cost of purchasing the new energy efficient
equipment.
Annual saving = existing annual energy cost with old equipment’s - new annual energy cost with energy
conservation equipment.
Significance of Payback period:
1. The most significant advantage of payback method is its simplicity.
2. It is easy way to compare several projects and then to choose the project which have shortage payback time.
Procedure to calculate the payback period:
A] Steps to calculate saving for Kw load;
a) Calculation for old system:
i) Calculate load per day =(Consumption per fixture X Total fixture X working Hours) / 1000
ii) Calculate load per month = Load per day X Working days per month
iii) Calculate consumption per month= Load per month(kW) X unit rate(Rs/kW)
b) Calculations for proposed system:
i) Load per day = (Consumption per fixture X Total fixture X working Hours) / 1000
ii) Load per month = Load per day X Working days per month iii) Consumption per month= Load per month(kW)
X unit rate(Rs/kW)
c) Calculate cost saving per month :
(old system consumption per month) – (Proposed system consumption per month)
d) Calculate cost saving per year = 12 x Saving per month
B] Saving for VA load :
, i) Calculation for old system:- Calculate VA = W / P.f. Total kVA load for all the fixtures = VA x No of
fixtures /1000
ii) Calculation for proposed system:- Total kVA load for all the fixtures = VA x No of fixtures /1000
iii) Saving:
● Total kVA load saving for all the fixtures = (Total kVA load of old system for all the fixtures) –
(Total kVA load of proposed system for all the fixtures)
● Monthly Demand charges saving = (Total kVA load saving for all the fixtures) x (Maximum demand
charges per kVA in Rs.)
● Yearly demand charges saving = 12 x (Monthly demand charges saving)
Calculations for Payback period in years:
i) Calculate total investment for new system
ii) Payback period in years = Investment / Total Saving
Significance of payback period:
➢ The payback period is an evaluation method used to determine the amount of time required for the
cash flows from a project to pay back the initial investment in the project.
➢ The most significant advantage of the payback method is its simplicity. It's an easy way to compare
several projects and then to take the project that has the shortest payback time.
Q..Explain with flow chart the energy audit procedure.
A) Start up meeting: Procedure starts with start up meeting. Then it continue until implementation of energy
saving measures.
It is the time required for an energy efficient method to cover its purchase, installation and running cost.
OR
Payback period is the time required to recover the funds invested in a project.
Procedure of Payback period :
First initial cost of energy conservation device
Payback period = —--------------------------------------------------------
Annual Saving of energy in amount
First initial cost of energy conservation device = Additional cost of purchasing the new energy efficient
equipment.
Annual saving = existing annual energy cost with old equipment’s - new annual energy cost with energy
conservation equipment.
Significance of Payback period:
1. The most significant advantage of payback method is its simplicity.
2. It is easy way to compare several projects and then to choose the project which have shortage payback time.
Procedure to calculate the payback period:
A] Steps to calculate saving for Kw load;
a) Calculation for old system:
i) Calculate load per day =(Consumption per fixture X Total fixture X working Hours) / 1000
ii) Calculate load per month = Load per day X Working days per month
iii) Calculate consumption per month= Load per month(kW) X unit rate(Rs/kW)
b) Calculations for proposed system:
i) Load per day = (Consumption per fixture X Total fixture X working Hours) / 1000
ii) Load per month = Load per day X Working days per month iii) Consumption per month= Load per month(kW)
X unit rate(Rs/kW)
c) Calculate cost saving per month :
(old system consumption per month) – (Proposed system consumption per month)
d) Calculate cost saving per year = 12 x Saving per month
B] Saving for VA load :
, i) Calculation for old system:- Calculate VA = W / P.f. Total kVA load for all the fixtures = VA x No of
fixtures /1000
ii) Calculation for proposed system:- Total kVA load for all the fixtures = VA x No of fixtures /1000
iii) Saving:
● Total kVA load saving for all the fixtures = (Total kVA load of old system for all the fixtures) –
(Total kVA load of proposed system for all the fixtures)
● Monthly Demand charges saving = (Total kVA load saving for all the fixtures) x (Maximum demand
charges per kVA in Rs.)
● Yearly demand charges saving = 12 x (Monthly demand charges saving)
Calculations for Payback period in years:
i) Calculate total investment for new system
ii) Payback period in years = Investment / Total Saving
Significance of payback period:
➢ The payback period is an evaluation method used to determine the amount of time required for the
cash flows from a project to pay back the initial investment in the project.
➢ The most significant advantage of the payback method is its simplicity. It's an easy way to compare
several projects and then to take the project that has the shortest payback time.
Q..Explain with flow chart the energy audit procedure.
A) Start up meeting: Procedure starts with start up meeting. Then it continue until implementation of energy
saving measures.
