Forecasting the Future of Alternative Energy Technologies Using Economic Payback Curves
DOI:
https://doi.org/10.13052/dgaej2156-3306.2832Keywords:
Alternative energy technologies, economic merit, forecasting, paybackAbstract
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.
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