Paul Gilman wrote: We assume that the residential and commercial financial models are from a homeowner or business owner's perspective, and that they would not be likely to use IRR to make a decision about whether to install the renewable energy system. They would be more likely to make the decision based on how much it would save on their electricity bill, or based on a payback calculation.
Thanks for the IRR workaround, Paul.
Here's another perspective on why I think it makes sense to include the IRR in the simulations: as a homeowner, consumer and stock market investor the IRR is something that I feel I can use to compare this investment to others. I can compare this to the cost of capital, savings account interest rates, or to the annualised returns of the stock market, for example. NPV, on the other hand, is somewhat of a foreign concept, and the payback period in and of itself doesn't tell me much about what happens beyond that point.