Solar Policy, Economics, and Sustainability Flashcards
7 cards from real SE ENGR. practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Solar Policy, Economics, and Sustainability flashcards as text
A commercial PV system costs $1,000,000 and claims a 30% investment tax credit. Under federal rules, what is the depreciable basis for MACRS?
Answer: $850,000
The depreciable basis is reduced by half the ITC amount, so $1,000,000 minus $150,000 equals $850,000.
Under MACRS, commercial solar energy property is generally depreciated over what recovery period?
Answer: 5 years
Solar energy property is classified as 5-year MACRS property.
Which metric is the ratio of the present value of lifetime costs to the present value of lifetime energy produced?
Answer: Levelized cost of energy (LCOE)
LCOE divides discounted lifetime costs by discounted lifetime energy output, usually in $/kWh.
If a project's NPV is exactly zero at a 7% discount rate, what does that tell you about its IRR?
Answer: The IRR equals 7%
IRR is defined as the discount rate at which NPV equals zero.
Which federal law first required utilities to buy power from qualifying small power producers at the utility's avoided cost?
Answer: PURPA (1978)
The Public Utility Regulatory Policies Act of 1978 created qualifying facilities and avoided-cost purchase obligations.
A solar developer sells all of a project's output to a corporate buyer at a fixed $/kWh price for 20 years. What is this agreement called?
Answer: Power purchase agreement (PPA)
A PPA is a long-term contract to buy electricity from a generator at a set price.
What is energy payback time (EPBT) for a PV module?
Answer: The time the module takes to generate the energy used to make it
EPBT compares embodied manufacturing energy with annual energy generation, and for modern PV it is typically 1-3 years.