❓ Dr. Honey questions Water Corporation's $30M solar panel investment, seeking details on financial impacts and potential dividend increases. The Water Corporation anticipates energy cost savings and a positive net present value, but hasn't decided how savings will be used.
AnsweredQoN 6014Legislative Assembly
QuestionView source ↗
I refer to the announcement of a $30 million investment over 3 years by Water Corporation to install solar panels at Water Corporation locations, and I ask: (a) What is the expected annual breakdown of the investment (by year); (b) Does Water Corporation expect to increase or decrease the cost of energy to run their facilities once these new solar panels are installed; (c) What are the expected financial impacts by year over the next 10 years resulting from this proposal (amount that energy costs will increase or decrease - please indicate if the amount is an increase or decrease in expected energy costs by year); (d) What is the expected net present value, rate of return and payback period for the $30 million investment over a 10 year period; and (e) Does Water Corporation expect to increase the dividend to the State Government as a result of this investment and, if so, by how much per year?
AnswerView source ↗
Answered
11 August 2020
Responded by
Minister for Water
Response time
27 days
a) The planned estimated investment for the three years is :
a. 2020 $2 million
b. 2021 $10 million
c. 2022 $18 million
b) The Water Corporation expects a decrease in the cost of energy to run these sites once the panels are installed.
c) The planning level estimates for the energy cost savings over the next 10 years are on average $2.3 million per year.
d) The Water Corporation requires each individual solar project be financially net present value positive or neutral using a discount rate of 10.1%. The estimated net present value aggregated for the full program is approximately $1.1 million, which is net present value positive. The expected payback period is 10 years and the Internal Rate of Return is 10% over this period.
e) The Water Corporation has not yet made a decision on how savings will be used.
a. 2020 $2 million
b. 2021 $10 million
c. 2022 $18 million
b) The Water Corporation expects a decrease in the cost of energy to run these sites once the panels are installed.
c) The planning level estimates for the energy cost savings over the next 10 years are on average $2.3 million per year.
d) The Water Corporation requires each individual solar project be financially net present value positive or neutral using a discount rate of 10.1%. The estimated net present value aggregated for the full program is approximately $1.1 million, which is net present value positive. The expected payback period is 10 years and the Internal Rate of Return is 10% over this period.
e) The Water Corporation has not yet made a decision on how savings will be used.
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