Discount factor and Solar CSP: Difference between pages

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'''1.'''
''Energy - sustainable finance - green finance''.


(DF).
Solar CSP is an abbreviation for Concentrating Solar Power energy generation.


The number less than one which we multiply a single future cash flow by, to work out its present value as:


PV = DF x future cashflow.
Solar CSP systems use reflectors to focus and concentrate the sun's light energy, typically to raise the temperature of a heat-absorbing heat transfer fluid.


The heat energy in the heat transfer fluid is then used in turn to generate electricity, for example through steam turbines.


The periodic discount factor is calculated from the periodic [[yield]] as:
Contrasted with Solar PV systems, which generate electricity directly.


DF = (1 + periodic yield)<SUP>-n</SUP>
Commonly abbreviated as DF(n,r) ''or'' DF<SUB>n,r</SUB>
Where:
n = number of periods.
r = periodic yield (or periodic cost of capital).
<span style="color:#4B0082">'''Example 1: Discount factor calculation'''</span>
Periodic yield or cost of capital (r) = 6%.
Number of periods in the total time under review (n) = 1.
Discount factor = (1 + r)<sup>-n</sup>
= 1.06<sup>-1</sup>
= 0.9434.


== See also ==
* [[Green finance]]
* [[Renewables]]
* [[Solar PV]]
* [[Sustainable finance]]


The greater the time delay, the smaller the Discount Factor.
[[Category:The_business_context]]
 
[[Category:Corporate_finance]]
 
[[Category:Investment]]
<span style="color:#4B0082">'''Example 2: Increasing number of periods delay'''</span>
[[Category:Long_term_funding]]
 
[[Category:Identify_and_assess_risks]]
Periodic yield or cost of capital = 6%.
[[Category:Manage_risks]]
 
[[Category:Risk_frameworks]]
The number of periods delay increases to 2.
[[Category:Risk_reporting]]
 
[[Category:Financial_products_and_markets]]
Discount factor = (1 + r)<sup>-n</sup>
[[Category:Technology]]
 
= 1.06<sup>-2</sup>
 
= 0.8890.
 
''(A smaller figure than the 0.9434 we calculated previously for just one period's delay.)''
 
 
 
'''2.'''
 
The yield or cost of capital used for the purpose of calculating Discount Factors, as defined above. 
 
For example the 6% rate applied in definition 1. above.
 
 
== See also ==
* [[Annuity factor]]
* [[Certificate in Treasury Fundamentals]]
* [[Certificate in Treasury]]
* [[Compounding effect]]
* [[Compounding factor]]
* [[Cumulative Discount Factor]]
* [[Day count conventions]]
* [[Factors]]
* [[Present value]]

Latest revision as of 15:57, 1 January 2020

Energy - sustainable finance - green finance.

Solar CSP is an abbreviation for Concentrating Solar Power energy generation.


Solar CSP systems use reflectors to focus and concentrate the sun's light energy, typically to raise the temperature of a heat-absorbing heat transfer fluid.

The heat energy in the heat transfer fluid is then used in turn to generate electricity, for example through steam turbines.

Contrasted with Solar PV systems, which generate electricity directly.


See also

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