Certified Energy Auditor Certification Certified Energy Auditor Economic Analysis and Financing Questions and Answers 3

Question 1

What is the internal rate of return (IRR) for an energy project?

Accepted Answer

The discount rate at which the net present value equals zero

Answer

The interest rate charged by the lender

Answer

The percentage of energy saved annually

Answer

The ratio of annual savings to initial investment

Question 2

A utility offers a $0.15/kWh rebate for verified electricity savings from an energy retrofit. If the project saves 200,000 kWh annually, what is the one-time rebate amount?

Accepted Answer

$30,000

Answer

$15,000

Answer

$20,000

Answer

$25,000

Question 3

Which factor most significantly affects the discount rate used in a federal energy project life-cycle cost analysis?

Accepted Answer

The current real rate of return on Treasury securities

Answer

The building's geographic location

Answer

The type of energy conservation measure installed

Answer

The number of occupants in the building

Question 4

What is the primary advantage of on-bill financing for energy efficiency upgrades?

Accepted Answer

It allows repayment through the existing utility bill with no upfront capital

Answer

It eliminates all project costs for the building owner

Answer

It guarantees energy savings will exceed payments

Answer

It provides tax-exempt status for all project costs

Question 5

When comparing two energy conservation measures with different useful lives, which analytical approach provides the most valid economic comparison?

Accepted Answer

Use annualized life-cycle costs to normalize for different lifespans

Answer

Compare simple payback periods directly

Answer

Select the measure with the lower initial cost

Answer

Compare only first-year energy savings

Question 6

An energy auditor is evaluating a cogeneration system with high capital costs but significant energy savings. Which escalation rate assumption would most increase the project's calculated net present value?

Accepted Answer

A higher energy price escalation rate

Answer

A lower general inflation rate

Answer

A higher discount rate

Answer

A lower maintenance cost escalation rate