Video Introduction to Life Cycle Cost Analysis as a requirement for donor proposals​

Life Cycle Cost Analysis as a requirement for donor proposals

  • When considering different technologies, analysis must be both technical and economical.
  • The least cost solution might not be the final choice since other factors might be taken into account. However, a cost comparison is a necessary step before making a choice of technology.
  • While the costs for solarizing water points are normally higher as opposed to other technologies such as diesel pumping systems, it has been established that adoption of solar energy systems translates to higher savings with time. 

Access this online video

Life Cycle Cost: the sum of all costs and benefits associated with the pumping system over its lifetime (or over a selected period of analysis), expressed in present day money. This is called the Present Worth or the Net Present Value of the system.

Payback Period: length of time required for the initial investment to be repaid by the benefits gained.

Total Cost Saving: difference in total costs incurred between 2 different investments at the end of the appraisal period.

Discount Factor (also called Real Interest Rate):   Index that express the change of value of money over time in a certain country for a certain product. It is NOT the change due to general inflation, but the difference in return between an investment one makes and another that one chooses not to make (eg. if a lender is receiving 9% from a loan and the inflation rate is 8%, then the Real Interest Rate= Nominal interest rate – Real inflation rate = 9 – 8 = 1%).

Access this online video introduction.!327&authkey=!AJhgKNCp9-MbqQc&ithint=file%2cpptx&e=ZfAeVf




Life Cycle Cost Analysis as a requirement for donor proposals


Anyone / No requirements

The Solar Hub Team
The Solar Hub Team
How can we help?