Compare solar vs biomass paybacks and recommend
Company: Capital One
Role: Business Analyst
Category: Statistics & Math
Difficulty: medium
Interview Round: Technical Screen
Compare two investments. Assume all energy prices/costs are per MWh and the selling price is $40 per MWh. Project A (Solar): initial investment = $12.5M; variable cost = $0; production profile = 75% of the year at 150,000 kWh/day and 25% of the year at 50,000 kWh/day. Project B (Corn biomass): initial investment = $2.5M; variable cost = $30 per MWh; steady output = 100,000 MWh per year. Tasks: (1) compute each project’s annual profit and payback period (profit used to offset the initial investment); (2) if a carbon credit of $5 per MWh applies to both projects, recompute paybacks; (3) what annual output would the biomass plant need to match the solar project’s payback from (1)? (4) make a recommendation between A and B, citing at least three non-financial considerations (e.g., fuel supply risk, permitting/interconnection, scalability, offtake certainty).
Overview: Compare solar and corn biomass investments using their costs, energy prices, and production profiles to calculate annual profits and payback periods. Recalculate paybacks with a carbon credit, find the biomass output needed to match solar’s original payback, and recommend a project using at least three non-financial considerations.
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