Method for including operation and maintenance costs in the economic analysis of active solar energy systems

For a developing technology such as solar energy, the costs for operation and maintenance (O and M) can be substantial. In the past, most economic analyses included these costs by simply assuming that an annual cost will be incurred that is proportional to the initial cost of the system. However, in assessing the economics of new systems proposed for further research and development, such a simplification can obscure the issues. For example, when the typical method for including O and M costs in an economic analysis is used, the O and M costs associated with a newly developed, more reliable, and slightly more expensive controller will be assumed to increase - an obvious inconsistency. The method presented in this report replaces this simplistic approach with a representation of the O and M costs that explicitly accounts for the uncertainties and risks inherent in the operation of any equipment. A detailed description of the data inputs required by the method is included as well as a summary of data sources and an example of the method as applied to an active solar heating system.