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Limitations - Load Factor Cap Example
A Project Sponsor has a project with demand and energy savings as shown in the following table:
 |
Demand savings
|
Energy savings
|
|
Chiller retrofit
|
38 kW
|
300,000 kWh
|
|
Motor measures
|
20 kW
|
220,000 kWh
|
|
Total savings
|
58 kW
|
520,000 kWh
|
To determine the total incentive payment, the Project Sponsor:
1. Calculates the demand incentive:
58 kW x $175/kW = $10,150
2. Calculates the energy incentive:
520,000 kWh x $0.060/kWh = $31,200
3. Adds the demand incentive to the energy incentive to get the total incentive:
$10,150 + $31,200 = $41,350
The Project Sponsor checks to see if the load factor cap must be applied by:
1. Dividing the total incentive (as calculated above) by the demand savings:
$41,350 ÷ 58 kW = $712.93/kW
2. Comparing this number to $700.60/kW, the maximum incentive payment per kW saved:
$712.93/kW > $700.60/kW
Since the project's incentive payment per kW saved is greater than the maximum allowed, the load factor cap must be applied. The Project Sponsor adjusts the incentive calculation by multiplying the demand savings by the maximum incentive payment per kW saved:
$58 kW x $700.60/kW = $40,634.80
Due to the load factor cap, the project is eligible to receive up to $40,634.80 in incentives:
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