Rate structure

Hello,

I am interested in knowing about the rate structure details in the SAM. In the electricity rate structure tab, it asks for annual escalation of electricity bill? Does it mean how much a consumer perceive that the future electricity prices will grow in the future?

Thanks,
Anuj

Dear Anuj,

Yes. SAM uses the information on the Utility Rate page to calculate a monthly electricity bill, which in turn is used to calculate the value of electricity savings in Year 1 of the project cash flow. SAM applies the escalation rate to this value to calculate the value in Years 2 and later.

Please see the note on the Electricity Rates input page under "Annual Escalation" for an explanation of how SAM applies the inflation rate from the Financial Parameters input page to that savings value.

Best regards,
Paul.