Economic Modeling

After all the technical assessments—voltage, protocols, inertia, safety—one question remains. 

"Does this retrofit make financial sense?" 

Engineers often treat economics as someone else's problem. That is a mistake. The engineer who can build a credible economic model is the engineer who gets projects approved. The reason is obvious: Economics is not the only driver for retrofits, but it is almost always the first question asked.

For that, we need the tools to answer the following questions with rigor: 

▪ How do we calculate simple payback and return on investment (ROI)? 

▪ How can we model energy savings (the most common retrofit driver)? 

▪ How to account for productivity gains, maintenance reductions, and avoided downtime? 

▪ How do we handle uncertainty and risk in economic models? 

▪ How can we navigate incentives, grants, and carbon accounting?

In the upcoming book: Solutions to Obsolescence, I will try to address these questions and more.