The Newark Star Ledger reported (here and here) that Public Service Electric and Gas, PSE&G, a subsidiary of Public Service Enterprise Group, PSEG, is installing a 2,700-ton chiller the University of Medicine and Dentristy of New Jersey, UMDNJ. This an $11.4 million investment in negawatts. The Star Ledger reported that UMDNJ will save $1.3 million per year on energy costs.What’s the payback? An $11.4 million investment will save $1.3 million per year. That means the system will pay for itself within 9 years, assuming the price of energy remains constant. I think it’s a much more reasonable to assume that the price of energy will go up, so the payback will be higher and the system will pay for itself sooner.
The system will work long after it is paid for. It will save $13 Million over the next 10 years and $26 Million over the next 20 years – assuming electricity costs are constant. Assuming electricity costs increase an average of 5% per year, this will save $16.35 Million over the next 10 years, and $42.99 over the next 20 years.
- Projected Savings of $11.4 Million investment.
- After 1 Year: $1.3 Million, a return on investment of 11.4% in one year.
- After 5 Years: Save $7.18 Million, for a total ROI of 63%, assuming a 5% annual increases in cost of energy.
- After 10 Years: Save $16.35 M; total ROI of 143.4%).
- After 15 Years: Save $28.05 M; total ROI of (246%)
- After 20 Years: Save $42.99 M; total ROI of 377%).
We have Governor Corzine to thank. as well as Governors Whitman, McGreevey, Codey, and Christie.