Economic analysis of energy retrofits for buildings
Research was conducted regarding improving the primary method the Alabama Industrial Assessment Center (AIAC) uses to make recommendations to companies regarding whether implementing an energy saving retrofit is economically sustainable. Their current decision-making criterion is based around the payback period method. An Excel-based tool was developed that is able to use the information obtained by the AIAC in their facility assessment reports to make a more informed decision regarding the economic systainability of the retrofit using the time value of money technique of annual cost and inflation. While the majority of the time the research confirmed the recommendation made using the payback period method, some of the time there was disagreement between the two methods. Further testing is warranted in order to validate any direct correlation between the payback period method and the cost-benefit ratio values obtained using this tool for economic analysis of energy retrofits for buildings. Because payback is a measure of liquidity and not profitability, the assumption can be made that the new tool is more accurate for companies to make a more informed decision regarding implementing the retrofit, but only more research could confirm this hypothesis.