It appears that SAM's default discount rate (real) for residential PV systems is set at 8% and the inflation rate at 2.5% which yields a nominal discount rate of 10.7%
A couple of questions pertaining to discount rates;
1) As the analysis is sensitive to discount rate I am curious to understand the rational behind the defaults. Any recent studies/papers that would suggest the appropriate discount rate to use for residential systems in the current economic environment of low interest rates and very low yields on alternative investments available to homeowners? What discount rates are people using currently?
2) Is it possible to input the nominal discount rate into the model rather than being calculated based on inflation rate and real discount rate? Curious to understand why the nominal discount rate is not the input to the model and the real discount rate then calculated rather than the other way around. Isn't it the nominal discount rate that most homeowners will be thinking about?
Thanks
