Financial Metrics – There are several helpful metrics calculated here.
The “Simple Payback Period” is the amount of time it takes this project to pay back its Project Cost, assuming you returned 100 percent of the realized financial savings to the GRF each year. If the annual financial savings are not enough to repay the project cost within the usable Lifespan of the project, the Simple Payback Period will appear in red. You should confirm that the Lifespan, Annual Savings, and Project Cost have been entered correctly in that situation, and if they are, this project will not be lucrative and will have a negative ROI.
The “Loan Repayment Period” is how long it will take for the project to repay its Adjusted Project Cost. If you’re going to pay back more than 100 percent of the Project Cost, or charging an annual interest, it will take longer to repay the loan, and the Loan Repayment Period will exceed the Simple Payback Period. Also, if your annual payback to the GRF is only a portion of your annual financial savings, then it will take longer. If the project will not be able to repay the loan in the given project Lifespan, you will see an infinity sign. In this situation, you should confirm that the Financial Criteria on the Settings page is correct as well as the Lifespan, Annual Savings, and Cost for the project. If they are all correct, then this project will not be able to repay its full cost to the GRF.
Lifetime Return on Investment (ROI) is calculated based on savings during the project’s whole lifetime, as defined in the tool tip. Since GRITS is calculating it based on lifetime savings, not on annual savings, this ROI may be much higher than expected. This usually occurs if the project has a long lifetime and a small cost, thus having a large lifetime return.
Annual ROI is taking the Lifetime ROI and annualizing it. By taking the Lifetime ROI and dividing it by the number of years in the project lifespan, you can see the annual financial returns from the project.
Net Present Value and Internal Rate of Return are two financial calculations and are defined in the tool tip. They both help you determine if a project is worthwhile to finance and serve as project performance metrics after the project has been completed.
“Unit Cost per MTCO2E Abated” shows how much this project costs to abate each metric ton of carbon dioxide equivalent emissions. This calculation demonstrates how expensive it was to reach carbon reduction goals.
The Financial Metrics section of the Project Detail page
