Economic assessment of distributed generation using life cycle costs and environmental externalities

The decisions that are made with regard to which energy-conversion technologies to employ are of great consequence and impact not only to the economy, but also to many other areas of perhaps greater importance to society. It is imperative to provide decision makers with recommendations that account in some way the effects of energy externalities. This paper provides a summary of literature regarding the topic of distributed power generation, its related economics and environmental external costs. An externality-inclusive life cycle cost methodology is presented; and a case study assessment for a hypothetical commercial/industrial facility is used as an example.