Calculation Guide

Information and explanation of calculations for evaluating your project:

 

Outputs

Energy offset (kWh/year)

The calculators provided (links) should provide either annual or lifetime savings.  If the calculator provides lifetime energy savings (EPA Purchase and Procurement calculators for Appliance Swap projects, etc.), determine lifetime in years and divide lifetime energy savings by the years.  In some cases, the years might be under the second tab of the spreadsheet, “Assumptions”. 

kWh energy saved per lifetime
Years lifetime

 

= kWh energy saved/year


Emissions offset (lbs CO2/year)

Same concept as with energy offset, but with CO2 emissions.  If emissions are given in carbon instead of carbon dioxide (C not CO2), see Conversions section below for appropriate conversion. 

lbs CO2 saved per lifetime
Years lifetime

 

= lbs CO2 energy saved/year

 
Payback period (years)

Some calculators will do this for you.  If it is not provided, please use a simple payback calculation.  You may have to calculate the next item on the worksheet to complete this calculation.

Capital Cost
Annual Cost Savings

 

= Simple Payback Period in year

 
Anticipated Savings/Costs per year

This should be financial savings apart from capital costs.  For example, yearly savings from lower energy bills minus operation and maintenance costs of alternative energy supply.  One way to calculate these savings is to take the amount of energy saved or offset and multiply by the cost of that energy.

Energy saved per year * Cost per energy unit

 

= Energy savings per year

 

1,000 kWh energy saved per year * $0.085/kWh = $85.00 energy savings per year

 

Assumed Project Lifetime (years)

If you know the lifetime of your project, such as expected life of the technology or how long the project will be implemented, state that here.  If the lifetime is unknown, refer to the Estimated Lifetimes section below.  Note: For planning purposes, you may want to run calculations for 2-3 different lifetime estimates.  The final output results are very sensitive to this input.


Project Lifetime energy offset

Take the annual energy offset, recorded above, and multiply by estimated project lifetime. 

Annual Energy Offset * Lifetime in Years

 

= Lifetime Energy Offset


Project Lifetime emissions offset

Take the annual emissions offset, recorded above, and multiply by estimated project lifetime. 

Annual CO2 Emissions Offset * Lifetime in Years

 

= Lifetime Emissions Offset

 

Project Lifetime (net) savings

While calculating the net present value, internal rate of return, and benefit-cost ratio for your project is a crucial part of the planning stage (see Finance Calculations section if interested), the un-discounted net value of the project can also be useful. It takes into consideration all anticipated savings and subtracts anticipated and current costs.

Savings (lifetime energy offset * energy rate avoided, other savings)

– Costs (capital, operation, etc.)

 

= Net Savings/Cost of project

 

Note: Since there are a variety of things that one could include or exclude, it's important to be as detailed as possible in explaining what is being considered or left out.  Use your own judgment as to what costs and savings are relevant for evaluating the economic outcomes of your project.

 
Cost per energy unit offset (project total cost/energy unit offset)

Project Total Cost is the upfront cost of the project.  Divide by lifetime energy offset. 

Note: This result should not be considered the "price" of energy produced by the project.  Rather it is an underestimate of the price of producing energy, without including maintenance costs, and fully accounting for inefficiencies. 

Project Total Cost or Capital Cost
Lifetime Energy Offset

 

= Cost per kWh offset

 

1,200 kWh energy saved per lifetime
$12,000 Project capital costs

= $0.10/kWh offset


Cost per emissions reduction (project total cost/emissions reduced)

Project Total Cost is the upfront cost of the project.  Divide by lifetime energy offset.

Note: This result should not be considered the "price" of the emission reduced by the project.  Rather it is an underestimate of the price of producing energy, without including maintenance costs, and fully accounting for inefficiencies. 

Project Total Cost or Capital Cost

Lifetime CO2 Offset

 

= Cost per lb CO2 offset

 

1,200 lbs CO2 saved per lifetime
$12,000 Project capital costs

= $0.10/lb CO2 offset

 


Solar Projects

The list below is to assist you in your calculations. 

 

Explanation of inputs:

·     Size: Choose the size of system that closely represents your system. 

·     Cost: Take the total cost of system (not including installation or infrastructure) and divide by the watts provided.  (Wattage of system should be included in the specifications.)

·     Tilt: Can leave at default unless you are aware that you are using a different tilt.  If you are changing your tilt with the seasons, choose which ever angle you prefer to use for calculations and make a note if it is either over- or under-estimating energy production.

·     Orientation: Leave facing South since we are in the Northern Hemisphere

·     Electric Bill: Useful for planning.

·     Escalation: General estimations are 3.0% escalation rate. 

·     Payment: If you are financing the system through a loan and want greater accuracy, complete the form accordingly. 

 

Explanation of outputs:

·     Net System Cost After Incentives: If you are in the planning stages and estimating your system, use this number.  If you are in the evaluative stages, please use information from purchasing receipts.

·     System Savings From Incentives:

·     PV System Electricity Production: Again, this is a useful estimation for planning, and can be used for evaluation  if no other information is available.

·     Electricity Supplied by System: Useful for planning.

·     First Year Electric Bill Savings: Useful for planning.

·     Carbon Dioxide Emission Reductions: This is annual reductions; can use to calculate lifetime emission reductions.

 

Adjusting Assumptions in MS Excel Calculators

In any of the calculations that use MS Excel, the creators have provided ways to adjust the
assumptions that underlie all the calculations.  If you are unfamiliar with the basics of MS Excel,
there are a variety of tutorials online (Google Search: MS Excel Tutorials). 

·     The basic concept is that there are input cells where you are asked to enter the quantity, size, energy demand of an appliance or other project. 

·     There are output cells which are determined by formulas or calculations behind them. 

·     In many equations, there are more variables than those you entered as inputs.  These other variables are assumed values, such as price of product, price of energy, amount of product usage and energy demanded.

·     If your product is similar enough to the energy star products and generic products, it is unnecessary to change any of the assumptions. 

·     If your product is dissimilar enough, for greater accuracy, you may want to alter some assumptions.

 

To alter assumptions:

·     You need to locate the assumptions that are affecting the output cell.

o        To do this, if you select/click the output cell, the formula will appear in the formula bar above.  These list cells.  Seek the Help file if you have difficulty understanding their coordinate system.

o        In many cases, the assumptions are listed in cells that are either hidden or on another worksheet within the Excel workbook.  Worksheets are listed as tabs at the bottom.  The EPA calculators call their assumptions worksheet, “Assumptions”.

o        In most cases, their assumptions are documented and labeled, so they should be easy to identify and alter as necessary.


Conversions

Conversions helpful in calculating your project’s energy, emissions, and economics.

Miles per hour > Meters per second

1 mph = 0.44704 meters per second


1 meter per second = 2.23693629 mph

Converting Carbon to CO2

To convert carbon dioxide (CO2) to carbon (C), multiply the lbs CO2 times (12/44) (or .27273).  (This is the ratio of the atomic weight of C over CO2.)  Or to convert carbon to carbon dioxide, multiply the lbs of C by (44/12) (or 3.66667).

lbs CO2 * .27273 = lbs C

 

lbs C * 3.66667 = lbs CO2

 

Converting Pounds (lbs) to Tonnes (ton)

To convert CO2 or C lbs to tonnes, you can use one of the following conversions (depending on your preferred conversion)

1 metric tonne = 1,000kg = 2,205lb

1 US short ton = 907kg = 2,000lb

 

Converting kWh to CO2

If you already know the kWh used by the lighting and appliances, then you can actually multiply the amount of kWh by the carbon intensity of our electricity in Minnesota, which is 1.810 lbs CO2/kWh. (EPA EGrid)

kWh * 1.810 lbs CO2/kWh = CO2 output

 

Fuel Emissions Factors

Can be used to estimate CO2 offset by another system. 
From MPCA, except Electricity is from EPA eGrid 2005.

Natural Gas

11.07 lbs CO2/therm

Fuel Oil

22.13 lbs CO2/gallon

Electricity

1.810 lbs CO2/kWh

Gasoline 

19.56 lbs CO2/gallon

Propane

12.67 lbs CO2/gallon


Converting kWh to CO2

If you already know the kWh used by the lighting and appliances, then you can actually multiply the amount of kWh by the carbon intensity of our electricity in Minnesota, which is 1.810 lbs CO2/kWh. (EPA EGrid)

kWh * 1.810 lbs CO2/kWh = CO2 output

 

*Putting all three Carbon conversions together (C à CO2, lbs à tons, kWh àCO2)

These calculations together can help you take either electrical output, carbon or carbon dioxide emissions and understand them in various forms.

 

___ kWh * 1.810 lbs CO2 per kWh * (12/44) C per CO2 / tonnes conversion = C output

750 kWh * 1.810 lbs CO2/kWh = 1,357.5 lbs CO2
452.2 lbs CO2 * (12/44) = 370.23 lbs C
370.23 lbs C / 2,205 lbs per metric ton = .1679 metric tons C

There is a calculator available for national averages (http://www.epa.gov/cleanenergy/energy-resources/calculator.html), but in the case of Minnesota, which sources its electricity on a significant amount of coal, our carbon intensity is much higher. 


Estimated Lifetime

If you already know the expected lifetime of your product or system, please indicate and use that
as your parameter.  If you do not have a way of estimating lifetime for your specific project,
you may use the estimated/average parameters listed below.


Solar Projects

Average solar panel lifespan is 25 years.  (Average from data collected from Google searches and studies.)  Note: With solar panels lifespan is largely determined by quality of materials and other components of the system.  Ask the manufacturer or retailer if they can provide an estimate.

 

Helpful Assumptions

Minnesota Energy Profile: EIA Energy State Profile - MN

 
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