Payback period

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payback period

[′pā‚bak ‚pir·ē·əd]
(industrial engineering)
The amount of time required for achieving an amount in profits to offset the cost of a capital expenditure, such as the cost of investment in modifications in an industrial facility for the purpose of conserving energy.

Payback period

A popular nondiscounting project selection technique used when organizations require the capital investment of a project to be recovered within a specified period; the period it takes for the stream of net cash flows to equal the initial investment. Also, a term used in the evaluation of sustainable and renewable energy options, wherein greenhouse or greenhouse intensive energy savings that the technology may enable over its useful life are assessed in relation to the embodied energy required for its manufacture. For renewable energy systems, it can also refer to the period of time over which energy cost savings derived from accessing renewable energy offset the upfront capital costs of the system.
References in periodicals archive ?
The CCHP economic feasibility is evaluated based on the annual operation costs and simple payback periods compared to a conventional system.
Average gas rates are used to find payback periods and lifetime net savings of the solar installation, which allows for analysis of the location for solar energy suitability.
It is stressed in the statement that this does not mean that banks will stop approving consumer loans with longer payback periods. However, banks are expected to respond to the National Bank's signal and help curb the rapid increase in this type of loans.
*Make recommendations for insulation and weatherization upgrades including estimated upgrade costs, expected annual energy savings, and approximate payback periods. *Analyze the building for the feasibility of adding one or more supplementary air-to-air ductless heat pumps.
Metropolis secured a number of rebate incentives to save money on the improvements and shorten payback periods. A rebate of approximately $650,000 was used on a $5 million multichiller replacement, which reduced the payback period from nine to seven years.
The optimum face velocities for the cooling coils are surprisingly uniform for the different operating hours and payback periods, ranging from 250 to 350 fpm.
Carbon Trust Wales carried out a full survey of the site and provided a detailed business case including predicted payback periods and information on different funding options.
But the study showed that the most technically effective technologies can have high investment costs with payback periods as long as 20 years.
The CD-ROM contains thermal and radiation property data and Excel worksheets for calculating solar radiation on surfaces positioned at any orientation, cost savings from solar systems, payback periods, and photovoltaic system performance.
Murphy also realizes that the benefits of sustainable projects must be weighed against the costs and payback periods of these investments.
And the companies estimated that 60% of those projects had payback periods of three years or less.
While investors in mature markets are very active in this space, in India, interest levels haven't been as high because payback periods are much longer, and more uncertain.