## 5 Sensitivity Analysis
### Real Interest Rate  
This analysis sets the real interest rate changes from \(-5\%\) to \(5\%\) with intervals of \(1\%\). From Equation (1) to Equation (5) and the analysis results shown in Figures 16 and 17, it can be seen that a higher real interest rate leads to the lower present value of cash flows each year in the future. NPC will be seen as decreased, but the project benefit of PV/BESS will be decreased when the real interest rate increases. Therefore, LOCE and discounted payback will increase with the increase of the real interest rate. The analysis results of ROI and IRR can also be obtained from Equations (8) and (9), which are calculated by using the annual cash flow value without considering real interest rate, so it is not relative to real interest rate changes. In Figure 16 no more data point of discounted payback at an interest rate of \(4\%\) shows the 20-year payment with the PV/BESS scenario is much more than that without PV/BESS, so the project benefit is negatively related to the recovery period already more than 20 years.  
\begin{table}
\begin{tabular}{c c c c c c c} \hline
**PV/BESS Cost** & **1** & **0.9** & **0.8** & **0.7** & **0.6** & **0.5** \\
**Reduction Ratio** & **1** & **0.9** & **0.8** & **0.7** & **0.6** & **0.5** \\ \hline
**ROI (\%)** & 1.77\% & 2.45\% & 3.28\% & 4.31\% & 5.64\% & 7.42\% \\ \hline
**IRR (\%)** & 3.08\% & 4.14\% & 5.38\% & 6.84\% & 8.63\% & 10.90\% \\ \hline
**Discounted payback (year)** & 15.41 & 14.04 & 12.68 & 11.33 & 9.92 & 7.87 \\ \hline
**LOCE-Without PV/BESS** & 0.09401 & 0.09401 & 0.09401 & 0.09401 & 0.09401 & 0.09401 \\ \hline
**LOCE-With PV/BESS** & 0.08785 & 0.08599 & 0.08414 & 0.08229 & 0.08043 & 0.07858 \\ \hline
**Storage system cost** & **1** & **0.9** & **0.8** & **0.7** & **0.6** & **0.5** \\
**reduction ratio** & **1** & **0.9** & **0.8** & **0.7** & **0.6** & **0.5** \\ \hline
**NPC-Without PV/BESS (\$)** & \(-\$54\),813,205 & \(-\$54\),813,205 & \(-\$54\),813,205 & \(-\$54\),813,205 & \(-\$54\),813,205 & \(-\$54\),813,205 & \(-\$54\),813,205 \\ \hline
**NPC-With PV/BESS(\$)** & \(-\$51\),222,008 & \(-\$51\),075,814 & \(-\$50\),929,620 & \(-\$50\),783,427 & \(-\$50\),637,233 & \(-\$50\),491,039 \\ \hline
**Project benefit (\$)** & \(\$3\),591,197 & \(\$3\),737,391 & \(\$3\),883,585 & \(\$4\),029,778 & \(\$4\),175,972 & \(\$4\),322,166 \\ \hline
**ROI (\%)** & 1.77\% & 1.85\% & 1.93\% & 2.01\% & 2.09\% & 2.17\% \\ \hline
**IRR (\%)** & 3.08\% & 3.20\% & 3.33\% & 3.45\% & 3.58\% & 3.71\% \\ \hline
**Discounted payback (year)** & 15.41 & 15.22 & 15.04 & 14.85 & 14.67 & 14.48 \\ \hline
**LOCE-Without PV/BESS** & 0.09401 & 0.09401 & 0.09401 & 0.09401 & 0.09401 & 0.09401 \\ \hline
**LOCE-With PV/BESS** & 0.08785 & 0.08760 & 0.08735 & 0.08709 & 0.08684 & 0.08659 \\ \hline
**PCS cost reduction ratio** & **1** & **0.9** & **0.8** & **0.7** & **0.6** & **0.5** \\ \hline
**NPC-Without PV/BESS (\$)** & \(-\$54\),813,205 & \(-\$54\),813,205 & \(-\$54\),813,205 & \(-\$54\),813,205 & \(-\$54\),813,205 & \(-\$54\),813,205 \\ \hline
**NPC-With PV/BESS (\$)** & \(-\$51\),222,008 & \(-\$51\),197,709 & \(-\$51\),173,410 & \(-\$51\),149,112 & \(-\$51\),124,813 & \(-\$51\),100,515 \\ \hline
**Project benefit (\$)** & \(\$3\),591,197 & \(\$3\),615,496 & \(\$3\),639,795 & \(\$3\),664,093 & \(\$3\),688,392 & \(\$3\),712,690 \\ \hline
**ROI (\%)** & 1.77\% & 1.78\% & 1.80\% & 1.81\% & 1.82\% & 1.84\% \\ \hline
**IRR (\%)** & 3.08\% & 3.10\% & 3.12\% & 3.14\% & 3.16\% & 3.18\% \\ \hline
**Discounted payback (year)** & 15.41 & 15.38 & 15.35 & 15.32 & 15.28 & 15.25 \\ \hline
**LOCE-Without PV/BESS** & 0.09401 & 0.09401 & 0.09401 & 0.09401 & 0.09401 & 0.09401 \\ \hline
**LOCE-With PV/BESS** & 0.08785 & 0.08780 & 0.08776 & 0.08772 & 0.08768 & 0.08764 \\ \hline \end{tabular}
\end{table}
Table 7: _Cont._