darag said:I'm not sure what exactly your trying to calculate - but using NPV I think would be overly complicated. What I'd do is caculate how many years it would take to break even while factoring in the interest rate (which effectively acts as a discounting rate - so maybe would be using NPV after all).
You have:
Sticking the lot into the NPER function of Excel or some other financial calculator, tells me that it will take you 10.3 years to break even.
- A Rate: say 4.1%
- A saving/recurring payment (or Pmt): of 1500
- A upfront cost (or Present Value or PV): of -12500 (the minus is important)
extopia said:There are lots on online NPV calculators. Here's one:
[broken link removed]
extopia said:Hi
However... couple of observations. Where did you get the 12.5k starting point? I installed a heat pump system but there's no way it was 12.5k MORE EXPENSIVE than an oil system - in fact the whole system was about that amount, including the underfloor pipes and radiators upstairs, which I would have needed anyway with an oil system. Are you sure this is the right number? I'd have to check my records but I believe my heat pump cost about 6k. Can't remember the cost of a comparable oil or gas boiler to be honest, but the "payback period" should be based on the difference in the cost of installing an entire oil sytem and an entire heat pump system.
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