investor- or owner-operated, versus commercial sector) we then define a discounted ROI rate which would generate a minimum market, and define a second market capture ROI, and thus define the normal curve in the same manner as mentioned for the SFR market. School building decision-makers have the highest awareness of lifecycle costing requirements and definitely consider pay-back implications in making purchase decisions. Thus we define economic performance and criteria in terms of total system cost pay-back, and define the normal curve in a manner similar to the SFR, MF, and commercial markets. Optimum System Definition Actual system performance and relative competitiveness vary depending on regional factors of total building load, percent solar utilization, fuel price, and other quantitative factors (Tables 3-1 and 3-2). Thus different regions reflect different optimum system performance, and it is important to determine the optimum system for each SMSA and region. This optimum system performance point is determined by inputting varying collector sizes for each SMSA study case, calculating resultant market capture rates and total dollar markets, and selecting that system generating the highest dollar market. Through this procedure, optimum collector size and optimum solar utilization for each SMSA and thus for each region is determined. Fuel Availability Since fuel prices determine the relative competitiveness of SES to conventional systems, we measure SES market performance under each energy source fuel price. Solar competes most favorably against electricity, and is hardly competitive against gas until about 1995. Thus, relative market size for each region and SMSA will depend on the relative usage of electricity compared to gas, and to a lesser extent oil. Our program calculates the market capture rate, and then adjusts the unit market depending on percent usage of each fuel type. Thus, market capture of 10% with electricity would, for example, result in an overall market capture of 5% if 50% of the market were supplied with electricity, and 1% if only 10% of the market were supplied with electricity. Thus the importance of relative fuel type usage is apparent. Our final penetration rates reflect overall market capture. Solar Energy System Market The output of the entire capture potential analysis is a regional and U.S. market for SES by units, dollars, total square feet, and percentage market capture, as well as a definition of major qualitative and quantitative forcing functions which can affect this market. These results form the basis for the social, environmental, and economic impact assessment, and for determining the Proof of Concept Experiments and market strategy or implementation planning. 3.2 CASE ASSUMPTIONS We selected four alternate cases to illustrate relative SES market performance, given varying economic and government role assumptions. These assumptions reflect our determination of economic factors which will have a strong influence on SES market performance: capital cost, fuel price and availability, and potential government financial participation. Case I, the base case, is the most conservative estimate of possible SES market performance. It is based on our detailed cost estimates and on relatively conservative estimates of fuel price escalation (see Table 3-4). These fuel price estimates are based on a model embodying the important cost parameters of the electric and gas utility industry. The base case also assumes the current electric utility practice of preferential rates for single-family homes and a slight moderation of the recent increasing Crend toward electric heating. No direct government incentives to encourage SES purchase are assumed. The SES industry is presumed to be in essencially a market introduction stage. Furthermore, no cost credit is given for the fact that the collector will be integrated into the roof in new construction, resulting in a portion of the cost actually being new construction cost and not incremental SES cost. Case II assumes the same cost and fuel price escalation as the base case, but also assumes direct government incentives of a 25% tax credit on the SES incremental mortgage payment to SFR consumers, and an investment tax credit of 7% for MF and commercial markets. Case III assumes the same system cost, fuel availability, rate structure, and government role as the base case, but assumes a 1980 system cost eduction of 25%. This case would reflect a large government- or industryinitiated R&D effort, and a more advanced SES industry "state of the art". It also could relect part of the SES cost being absorbed into the construction cost of the building. This case illustrates SES relative market sensitivity to capital cost. Case IV assumes the same system cost, fuel escalation, and government role as the base case, but also assumes that the preferential rate structure for single-family residences is abolished and re-established at multifamily rates. This case illustrates the sensitivity of SES market penetration to fuel cost or rate changes, and will given an indication of probable effects of fuel price escalations above our estimates. 3.3 ENERGY SUPPLY/DEMAND Figure 3-2 compares four energy demand scenarios with the available domestic supply. If a stabilized energy economy can be developed as shown in Case D, there will be no shortage or need for imported fuels after 1990. Case C is perhaps the most realistic of the scenarios. Under this scenario the difference between the supply and demand remains relatively constant after 1985. The potential for solar energy to contribute to the supply/demand gap is illustrated in Tables 3-5 and 3-6. The figures reflect 80% solar utilization for hot water heating, space heating, and space cooling requirements. Continuation of present population, energy consumption, and GNP Same as Case B except impact cannot start until 1985. Due to Figure 3-2 Projected U.S. Demand Scenarios Compared with |