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 ?
According to Build Group Principals, owners can cut payback periods 50% or more by capitalizing on advertising revenues afforded by the SMC.
Rather than a large-scale, expensive approach to energy management, by replacing antiquated boiler systems or installing triple-glazed windows or solar panels; these require significant investments and longer payback periods.
The software presents clear and compelling data for the user, including estimated statistics on operating expenses, savings, payback periods, ROI and energy usage.
Self-build results in payback periods that are typically in excess of ten years for 'b' geotypes
Energy conservation can also include upgrading chillers, motors and air conditioners, which typically have payback periods of less than three years.
The program includes incentives that make payback periods for project costs unusually attractive.
Driver information and warning systems, and chassis control systems, which offer faster payback periods and high returns on investment are likely to experience steady increase in demand, observes the analyst of this research service.
The deal provided that Shearson Lehman would rent the land with an option to purchase based on set figures and calculated to provide the city with paybacks for any abated taxes not yet received if purchased within the deferral or payback periods.
Our process includes engineering and design, solar load testing, proven carrier grade equipment, and payback periods in as few as nine months for an upgrade.