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5-4 Solar Panel Installation

A university spent $1.8 million to install solar

panels atop a parking garage. These panels will

have a capacity of 500 kw, have a life expectancy

of 20 years and suppose the discount rate is 10%.

a. If electricity can be purchased for costs of

$0.10 per kwh, how many hours per year

will the solar panels have to operate to make

this project break even?

b. If efficient systems operate for 2,400 hours

per year, would the project break even?

c. The university is seeking a grant to cover

capital costs. How big of a grant would make

this project worthwhile (to the university)?

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