Forecasting the Future of Alternative Energy Technologies Using Economic Payback Curves

Authors

  • Gary Nowakowski Energy Engineering from the University of Wisconsin and a MBA from DePaul University.
  • Michael Hahn Chemical Engi- neering and an MBA from the University of Colorado.

DOI:

https://doi.org/10.13052/dgaej2156-3306.2832

Keywords:

Alternative energy technologies, economic merit, forecasting, payback

Abstract

Calculating a payback period for new or improved energy tech-
nologies is a simple economic function. However, the very nature of its
simplicity tends to mask underlying dynamic characteristics that provide
valuable insight into the interpretation of its results. Use of graphics to
illustrate the payback function provides an expanded perspective on pay-
back and its sensitivity to energy rates, product cost/pricing and efficien-
cy/technology improvements. This article describes the use of payback
curves and provides examples of how these curves can be utilized to gain
an understanding of the natural evolution of both high-efficiency prod-
ucts and renewable energy products; provide an indication on the sensi-
tivity of product economics to energy prices, product cost, and efficiency
improvements; and ultimately forecasts the future market prospects for
new or improved technologies and products based on economic merit.

Downloads

Download data is not yet available.

Author Biographies

Gary Nowakowski, Energy Engineering from the University of Wisconsin and a MBA from DePaul University.

Gary Nowakowski works for the U.S. Department of Energy’s Wind
and Water Power Technologies Office. Mr. Nowakowski oversees the pro-
curement and project management of wind and water financial assistance
awards with public and private entities. Mr. Nowakowski is responsible
for the technical project management of more than 250 wind and water
projects exceeding $200 Million as well as oversight of twelve Federal and
contractor staff. Mr. Nowakowski draws on more than two decades of
experience in energy technology design, development and deployment
in both the public and private sectors. Prior to joining the U.S. Depart-
ment of Energy, Mr. Nowakowski was an Executive at the Gas Research
Institute responsible for commercializing new and improved natural gas
power generation products for the benefit of the natural gas industry. Mr.
Nowakowski has published more than 30 journal articles and reports on
energy technologies, market applications and economics. He earned a B.S. and M.S. in Energy Engineering from the University of Wisconsin and a
MBA from DePaul University.

Michael Hahn, Chemical Engi- neering and an MBA from the University of Colorado.

Michael Hahn works for the U.S. Department of Energy’s Wind and
Water Power Technologies Office. Mr. Hahn oversees the procurement
and technical project management of wind financial assistance awards
with public and private entities. He is the lead Technical Project Officer
for the Offshore Wind Advanced Technology Demonstration Initiative,
a multi-million dollar effort to jump start an offshore wind industry in
the United States. He also has responsibility for managing offshore wind
technology development and market acceleration projects. Mr. Hahn has
more than fifteen years of experience in technology development and de-
ployment in both the public and private sectors. Areas of past emphasis
include new product development and commercialization of climate and
weather monitoring technologies, as well as conventional hydroelectric
and wind power technologies. Michael earned a B.S. in Chemical Engi-
neering and an MBA from the University of Colorado.

References

Barbose, G. et al., “Tracking the Sun III: The Installed Cost of Photovoltaics in the U.S.

from 1998-2009,” LBNL-4121E, December 2010.

Berquist, Lee, “Power That Goes With the Wind,” Online Milwaukee Journal Sentinel,

Business, March 16, 1998.

“Can a Hybrid Save Me Money?” World Wide Web (http://www.fueleconomy.gov/feg/

hybridCompare.jsp), February 11, 2013.

Chu, Steven and Arun Majumdar, “Opportunities and Challenges for a Sustainable

Energy Future,” Nature, Vol. 488, August 2012.

“Cool Visions.” Commercial Gas Cooling Market Strategy and Tactics, Gas Research

Institute, GRI, GRI-98/-328, January 1999.

Brodrick, James et al., “Solid State Lighting Research and Development: Manufacturing

Roadmap,” U.S. Department of Energy, July 2011.

“Edmunds.com 2013 Volkswagen Passat,” World Wide Web (http://www.edmunds.

com/volkswagen/passat/2013/) Retrieved February 11, 2013.

EIA Electric Power Monthly October 2011, U.S. Energy Information Administration,

World Wide Web, (http://www.eia.gov/electricity/monthly/index.cfm), Retrieved

November 03, 2011.

EIA Electric Power Monthly, November, 2012, U.S. Energy Information Administration,

World Wide Web, (http://www.eia.gov/electricity/monthly/index.cfm), Retrieved

February 03, 2013.

Estimation of Wind Energy Production, Energypedia, World Wide Web (https://en-

ergypedia.info/index.php/Estimation_of_Wind_Energy_Production), Retrieved

November 2, 2011.

“Gas and Diesel Fuel Update,” World Wide Web (http://www.eia.gov/petroleum/gas-

diesel/) Retrieved February 11, 2013.

“German carmakers start clean diesel initiative in the USA,” (http://www.dieselnet.

com/news/2012/12vda.php), Retrieved February 11, 2013.

“Get Back Energy Savings - Set Back Your Thermostat,” Madison Gas and Electric

Brochure: Responsible Energy, World Wide Web, (http://www.mge.com/images/

pdf/brochures/residential/setbackthermostat.pdf) Retrieved November 30, 2011.

Gipe, P., “California Projects Show Steady Improvements,” World Wide Web (http://

www.wind-works.org/articles/Calproj.html), Retrieved November 2, 2011.

Gipe, P., “Generator Ratings and Capacity Factors: Why you should avoid them,” World

Wide Web (http://www.wind-works.org/articles/generatorratingandcapacityfac-

tors.html), Retrieved November 2, 2011.

Goodrich, Alan et al, “Residential, commercial, and utility scale photovoltaic system

prices in the United States – Current drivers and cost reduction opportunities,”

NREL, World Wide Web (http://www.nrel.gov/docs/fy12osti/53347.pdf), Re-

trieved March 12, 2012.

“How Wind Energy Works, Union of Concerned Scientists,” World Wide Web (http://

www.ucsusa.org/clean_energy/technology_and_impacts/energy_technologies/

how-wind-energy-works.html), Retrieved October 4, 2011.

”NEST, The Learning Thermostat,” World Wide Web (http://www.nest.com) Retrieved

March 12, 2012

“NREL PV Watts Calculator; World Wide Web (http://www.nrel.gov/rredc/pvwatts/),

Retrieved September 9, 2011.

Nowakowski, G. “Calculating Payback Period,” Energy Markets, Volume 5, No. 2.

February, 2000.

Randall, Tim, “Highest and Cheapest Gas Prices by Country,” Bloomberg, 2/13/13,

World Wide Web (http://www.bloomberg.com/slideshow/2013-02-13/highest-

cheapest-gas-prices-by-country.html), Retrieved February, 04, 2013.

“SunShot vision study, February 2012,” U. S. Department of Energy, World Wide Web

(http://www.nrel.gov/docs/fy12osti/47927.pdf), Retrieved March 12, 2012.

“Technical Assessment Guide”—Electricity Supply—1993, Electric Power Research Insti-

tute, EPRI TR-102276-V1R7, June 1993.

“Wind Cost per Installed KW,” World Wide Web (http://www.windustry.org/how-

much-do-wind-turbines-cost), Retrieved August 16, 2011.

Wiser R. and M. Bolinger, “2011 Wind Technologies Market Report,” LBNL-5559E.

August 2012.

Downloads

Published

2013-06-12

How to Cite

Nowakowski, G. ., & Hahn, M. (2013). Forecasting the Future of Alternative Energy Technologies Using Economic Payback Curves. Distributed Generation &Amp; Alternative Energy Journal, 28(3), 28–52. https://doi.org/10.13052/dgaej2156-3306.2832

Issue

Section

Articles