Question

An electrical water boiler is used for supplying steam to the process in the food industry. The rating of the boiler is 30kW. It is proposed to replace this boiler with a new energy efficient boiler. The new boiler costs $125,000. The new boiler can save 30% energy at 60% loading when compared with the old boiler. The erection and commissioning cost of the new boiler is $20,000. The resale value of the old boiler is $10,000. The maintenance contract for the new boiler is $8000. The boiler operates for 6000 hours in a year. The cost of electricity is $4 per kWh.
Calculate the payback period.

Answer 1