You Order a 2 KW System of Photovoltaic Cells to Be

question 55

Multiple Choice

You order a 2 kW system of photovoltaic cells to be install on the roof of your house. The cells are guaranteed to last at least 25 years. The cells plus installation plus electrical equipment will cost you $20,000 if you buy now, but $10,000 if you wait ten years. The average cost of electricity from your utility is 10 cents per kilowatt hour. What else do you need to know in order to calculate the amount of money you will have spent within 25 years going with either plan?

• A)You need to know the average number of kilowatt-hours you consume each year.
• B)You need to know whether your utility company is willing and able to purchase any excess electricity you produce.
• C)You may need to know the cost of additional storage batteries should you need to store your excess harvested electrical energy.
• D)You may need to know all of the above.

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Definitions:

Promissory Note

A financial instrument where one party (the issuer) promises in writing to pay a determinate sum of money to the other (the payee), either at a fixed or determinable future time or on demand of the payee, under specific terms.

Maturity

The date on which a financial obligation, such as a bond or loan, is due to be fully repaid.

Receivable

An amount owed to a business, typically by customers, that is expected to be paid within a short duration.

Party

An individual or entity involved in a legal transaction or agreement.