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Internal Rate of Return

USA: Californian Solar Process Heat Potential and Gas Price Competitiveness

Submitted by Baerbel Epp on November 19, 2016
Researchers at the US National Renewable Energy Laboratory (NREL) have observed a renewed interest in solar process heat applications in recent years, mainly thanks to “the improvement and proliferation of solar collectors for electricity generation and the development of sophisticated solar collector modelling tools.” Last year, two of those researchers – Parthiv Kurup and Craig Turchi – conducted a study on the potential of solar process heat provided by concentrating collector technologies in California (see the attached document). This study, entitled Initial Investigation into the Potential of CSP Industrial Process Heat for the Southwest United States, was supported by the US Department of Energy and was published in November 2015. The chart taken from it shows the annual energy use of steam in industry segments which utilise the largest amount of gas. The study’s authors found the temperature range from about 120 to 220 °C to be of great interest, as it enables the use of concentrating optics and of water as the heat transfer fluid. 
Chart: Page 22 of the attached study
 

Germany: Excel-Based IRR Commercial Project Calculations

Submitted by Baerbel Epp on September 25, 2014
IRR cash flow diagrammeGerman Fresnel collector manufacturer Industrial Solar is experiencing an increasing demand from clients all around the world: “Five years ago, we received two requests per month. Now, we receive around 50 each month and the requests are more serious,” Tobias Schwind, who is one of the Managing Directors of the company founded in 2009, confirms. Schwind has begun to notice a shift in the industry: “Whereas payback times of three to four years have, so far, been commonplace, the industry is steering towards five- to six-year periods,” he says and adds: “We, however, try to explain to our clients that they are investing in their infrastructure, and payback time is therefore not really the best criterion.” Industrial Solar offers potential clients a calculation of the Net Present Value (NPV) and the Internal Rate of Return (IRR). According to the managing director, an economic analysis based on these parameters often shows that solar process heat is worth further consideration.
 

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