ABSTRACT
The most critical factors in determining whether it is ’nancially worthwhile to install renewable energy systems are (1) initial cost of the installation and (2) the net annual energy production. If the renewable energy system produces electrical energy and is connected to the grid, the next important factor is the value of that energy. For large systems, it is the value of the electricity sold to the utility company; for systems using energy on site, it is generally the value of the electricity displaced, the retail value. In determining economic feasibility, renewable energy must compete with the energy available from competing technologies. Natural gas and oil prices have had large ¦uctuations in the past few years, and the future prices for fossil fuels are uncertain, especially when carbon emissions are included. For the United States, if the military costs for ensuring the ¦ow of oil from the Middle East were included, that would probably add $0.15-0.30/L ($0.50-1.00/gal) to the cost of gasoline. To increase market penetration of renewable energy, the return from the energy generated should exceed all costs in a reasonable time. For remote locations where there is no electricity, high values for electricity from renewable energy are probably cost competitive with other sources of energy. Of course, all values for electricity produced by renewable energy systems depend on the resource, so there is a range of values.
