Bradley Layton
Course Number:
Credits:
Meeting times:
Instructor:
Office Hours:
Pre-/Co-requisites:
bradley.layton@umontana.edu
Energy Finance and Economics
NRG250
3
MWF 9:00am – noon:30 HB07
Bradley Layton
406-243-7865
bradley.layton@umontana.edu
TR 9:30-11:00 or by appt.
Sophomore status or instructor permission. Familiarity with MS Excel.
Course Description NRG250 Energy Economics is theory and project-based course designed to give
students decision making skills when evaluating the advantages of installing, purchasing, or investing in
various energy systems. Business planning and clean tech start-up financing will also be addressed.
Students will work in teams to test several energy installation scenarios, accounting for installation,
maintenance, utility fees, licensing fees, and environmental impacts. Consideration is given to the
physical and engineering aspects of a particular technology under investigation. Domestic and municipal
water and food systems and their relationship to transportation will also be investigated with an eye
towards individual food and energy independence.
Course Overview Energy Economics is suitable for second-year students in the Energy Technology
Program seeking a better understanding of the time-value of money function when bidding a job, or
accounting students seeking a better understanding of the technical aspects of making various energy
technologies cost-effective. Students will become familiar with tax credits, cash flow forecasting and
financing options, conduct cost-benefit analysis on various energy investment and explore variables that
impact payback. Triple bottom line metrics will be examined.
Course Outcomes: Upon completion of this course, the student will be able to:
 Understand the importance of energy in our current technological society;
 Work with a business planning template
 Produce and analyze a projected cash flow statement
 Identify capital appropriate to different stages of a company and outline what is required to
approach these capital markets
 Distinguish between tax credits vs. tax deductions – state and federal (use DSIRE data)
 Understand capital budgeting (return on investment, internal rate of return and simple payback)
o Variables such as electricity prices, projected inflationary factors, discount rates, etc.
 Comprehend case studies (analyze project feasibility as to triple bottom line)
o Replacing forced-air system with PV (commercial)
o Upgrade fleet (commercial)
o Lighting retrofit (residential)
o Replace inefficient appliances with energy-star grade appliances (residential)
o Building energy retrofit (commercial)
 Develop a working knowledge of the historical cost of energy
 Manipulate relevant energy analysis software programs
 Review past projects from Energy Technology students
Required Texts:
Rauf Energy Finance for Engineers. Publisher, 2011 ISBN: 978-1-4398-5193-7, Adobe (.pdf) files posted
on Moodle - found under unit heading “Business Planning & Financing”
1
Bradley Layton
bradley.layton@umontana.edu
Lovins, A. 2011. Reinventing Fire. Rocky Mountain Institute, ISBN: 9781603583718
Assessment/Grading Policies
Grades are based upon successful completion of the following:
Quizzes (5)
50%
Course Project(s) Draft
15%
Course Project(s) Final
25%
Participation/Attendance/Summary responses
10%
Grade scale
A = 90-100
B = 80-89
C = 70-79
D = 60-69
F < 60
Exams, of which there are five, will be given each week, are noncumulative, and will require working
over an extended period on spreadsheets. The window for taking the exam will begin on Friday at noon
and close on Sunday at noon. There are no ‘make-up exams’ without prior notice of absence. If you will
miss an exam, you must notify me in advance.
Attendance and participation are mandatory, and as you will note, it can positively or negatively affect
your grade. Participation is also highly recommended—and is required: students must post substantively
at least three times on a minimum of three days (three posts per week).
Course Projects will be done in teams of two. The guidelines will be given during the first week of
lecture, and will involve a cost analysis of several energy technologies which may include photovoltaics,
wind, microhydro, geothermal, solar hot water, wood, natural gas, biomass, etc. There will also be short
assignments due for the following topics: Business planning/cash flow projections, capital budgeting
Lectures are recorded three times per week on Monday, Wednesday, and Friday mornings in Missoula.
Students living in town are encouraged to attend. For out-of-town students, and students with
commuting challenges, the lectures are also available for viewing via iTunesU. A link to iTunesU is
available under OneStop.
Course Supplement This course has a Moodle supplement where all readings, copies of the syllabus,
course schedule, some exams and quizzes, as well as other course materials can be found.
Drop/Add Policy http://www.umt.edu/catalog/policy_procedure.htm
Academic Honesty Policy All students must practice academic honesty. Academic misconduct is subject
to an academic penalty by the course instructor and/or a disciplinary sanction by the University. All
students need to be familiar with the Student Conduct Code. The Code is available for review online at
http://www.umt.edu/SA/VPSA/index.cfm?page?1321.
Students with disabilities will receive reasonable accommodations. To request course modifications,
please contact me as soon as possible. I will work with you and Disability Services in the accommodation
process. For more information, visit the Disability Services website at http://www.umt.edu/dss/ or call
406.243.2243 (Voice/Text).
Online support may be obtained via courseware-support@umontana.edu or x4999
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Bradley Layton
bradley.layton@umontana.edu
Communication is vital. If you have a medical or similar issue that is causing you to be tardy with test
taking or assignments submission, contact me via e-mail or phone. Do not rely on a Forum post for a
prompt response.
Email policy at UM According to University policy effective 1 July 2007, an “employee must use only
UMM assigned student email accounts for all email exchanges with students, since such communication
typically involves private student information.” This means that you must send any correspondence
through your GrizMail account. For more information on setting up and using your GrizMail account,
please go to http://www.umt.edu/it/email/studentemail.htm.
Schedule of Classes
Summer 2012: For a schedule of classes, please see the Provost’s website.
Week 1:
Week 1:
Week 1:
Week 2:
Week 2:
Week 2:
Week 3:
Week 3:
Week 3:
Week 4:
Week 4:
Week 4:
Week 5:
Week 5:
Week 5:
5-21-12
5-23-12
5-25-12
5-28-12
5-30-12
6-1-12
6-4-12
6-6-12
6-8-12
6-11-12
6-13-12
6-15-12
6-18-12
6-20-12
6-22-12
Lecture 1
Lecture 2
Lecture 3
Lecture 1
Lecture 2
Lecture 3
Lecture 1
Lecture 2
Lecture 3
Lecture 1
Lecture 2
Lecture 3
Lecture 1
Lecture 2
Lecture 3
Layton
Layton
Layton
Holiday
UMT Bus
UMT Bus
Layton
Layton
Layton
Layton
Layton
Layton
MU Bus
MU Bus
Layton
Syllabus, Intro, Project
Lovins
Nash
reading assignment
Tax Concepts and Time Value of Money Concepts
Decision Making Using Capital Budgeting
EFFE
EFFE
review of past energy tech projects
EFFE
EFFE
EFFE
CleanTech Business Planning
Cash Flow Forecasting & Capital Markets
Presentations
Class Outline
Week 1 – Reinventing Fire Amory Lovins – Layton


Game theory, Amory Lovins, energy analysis software programs
Energy metrics, conversion protocols and analysis
Week 2 – Economics of analyzing energy investments
o
One class: (UMT Bus) introduction to US income taxes, property taxes, and sales taxes;
considering taxes in decision making; time value of money concepts and capital
budgeting
o
One class: (UMT Bus) using capital budgeting to make energy conservation purchase
decision; using capital budgeting to make renewable energy purchase decisions; sources
of data for using capital budgeting in energy conservation and renewable energy
purchase decisions
3
Bradley Layton
bradley.layton@umontana.edu
Week 3 –
o
One class: (MC Bus) – business planning in the clean tech environment (including guest
speaker, Jason Kiely, of Rivertop Renewables) One class: (Lisa) – forecasting cash flow
and packaging investments for capital markets
Week 4 –Energy Auditing for Engineers – Layton
o
o
Review past projects from Energy Tech Students.
Cash flow projection/business planning assignment due 6-15-12
Week 5 – Final preparation of projects
o
Students work in teams and closely with faculty to prepare final projects.
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