Forecasting the Future of Alternative Energy Technologies Using Economic Payback Curves

  • Gary Nowakowski
  • Michael Hahn
Keywords: Alternative energy technologies, economic merit, forecasting, payback

Abstract

Calculating a payback period for new or improved energy technologies is a simple economic function. However, the very nature of its simplicity tends to mask underlying dynamic characteristics that provide valuable insight into the interpretation of its results. Use of graphics to illustrate the payback function provides an expanded perspective on payback and its sensitivity to energy rates, product cost/pricing and efficiency/technology improvements. This article describes the use of payback curves and provides examples of how these curves can be utilized to gain an understanding of the natural evolution of both high-efficiency products and renewable energy products; provide an indication on the sensitivity of product economics to energy prices, product cost, and efficiency improvements; and ultimately forecasts the future market prospects for new or improved technologies and products based on economic merit.

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Author Biographies

Gary Nowakowski

Gary Nowakowski works for the U.S. Department of Energy’s Wind and Water Power Technologies Office. Mr. Nowakowski oversees the procurement and project management of wind and water financial assistance awards with public and private entities. Mr. Nowakowski is responsible for the technical project management of more than 250 wind and water projects exceeding $200 Million as well as oversight of twelve Federal and contractor staff. Mr. Nowakowski draws on more than two decades of experience in energy technology design, development and deployment in both the public and private sectors. Prior to joining the U.S. Department of Energy, Mr. Nowakowski was an Executive at the Gas Research Institute responsible for commercializing new and improved natural gas power generation products for the benefit of the natural gas industry. Mr. Nowakowski has published more than 30 journal articles and reports on energy technologies, market applications and economics. He earned a B.S. and M.S. in Energy Engineering from the University of Wisconsin and a MBA from DePaul University.

Michael Hahn

Michael Hahn works for the U.S. Department of Energy’s Wind and Water Power Technologies Office. Mr. Hahn oversees the procurement and technical project management of wind financial assistance awards with public and private entities. He is the lead Technical Project Officer for the Offshore Wind Advanced Technology Demonstration Initiative, a multi-million dollar effort to jump start an offshore wind industry in the United States. He also has responsibility for managing offshore wind technology development and market acceleration projects. Mr. Hahn has more than fifteen years of experience in technology development and deployment in both the public and private sectors. Areas of past emphasis include new product development and commercialization of climate and weather monitoring technologies, as well as conventional hydroelectric and wind power technologies. Michael earned a B.S. in Chemical Engineering and an MBA from the University of Colorado.

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