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Economic analysis
The economic analysis brings costs and revenues together over the observation period and makes variants comparable. Its validity stands and falls with the quantities from the simulation: operating hours, fuel consumption, self-consumption and feed-in are the figures that are subsequently evaluated.
Observation period and boundary conditions
The observation period is oriented towards the service life of the main components; 15 to 20 years are common. Replacement investments required within this period – for instance engine overhauls for CHP units or the replacement of an inverter – belong in the calculation, as does a residual value at the end. Further boundary conditions are the discount rate, which reflects the cost of capital and the expected return, and price escalation rates, which should be set separately for fuel, electricity, maintenance and other costs – energy prices and labour costs develop differently in practice.
Net present value and annuity method
With the net present value method all future payments are discounted to the time of the investment and added up. A positive net present value means the investment pays off under the chosen assumptions; when comparing several variants, the one with the highest net present value is preferable. The advantage of this method is that it can handle payments that vary over time – exactly the case for tariffs and bonuses granted only for certain periods.
The annuity method distributes the same payments evenly over the years and yields annual total costs. It is illustrative when the cash flows are constant over the years and then produces the same ranking as the net present value. From the annual costs, heat generation costs in cents per kilowatt hour can be derived – the figure that makes variants most directly comparable. The payback period is useful as additional information but unsuitable as a sole criterion, because it ignores everything that happens after the investment has been recovered.
Sensitivity
Every economic analysis rests on assumptions about prices, interest rates and service lives that nobody can know with certainty over twenty years. A statement only becomes reliable when it is checked how sensitively the result reacts to these assumptions: does a twenty per cent change in the fuel price shift the ranking of the variants? Does it flip with an interest rate two percentage points higher? If the order remains stable, the decision is robust; otherwise the critical assumptions should be secured better. The ranges between favourable and unfavourable case provided in the cost module are the simplest way to start.
Role of EPOS-Plan
EPOS-Plan provides the complete, time-resolved set of quantities and the structured recording of investment, operating and energy costs including service lives, price levels and emission factors. All input variables are therefore available to evaluate variants by the net present value or annuity method. What remains important: the calculation evaluates assumptions, not facts. Subsidies, tax effects and contractual conditions have to be checked project by project; the results do not replace tax or legal advice.