solar water heater; dynamic economic environment; payback period
We have developed a procedure for assessing the economic viability of a solar water heater in a dynamic economic environment. The optimum life time for replacement of the system and the payback period are calculated for different interest rates and different increases in maintenance. It is concluded that
1. (a) the optimum life time of a solar hot water system for replacement decreases with an increase in maintenance cost,
2. (b) the actual life of the system can be increased by increasing the initial maintenance cost without replacement after the optimum life time and
3. (c) the payback period increases with an increase in initial maintenance cost and also with the rate of increase in maintenance cost.