cost estimates are predicated on the full absorption of all transportation costs by the SSPS program, the question is raised as to whether this is altogether appropriate for establishing unit costs. The cost of development of the HLLV is estimated to be about $20 billion so it is a nontrivial question. The same potential question of 100 percent allocation of costs to the SSPS program also exists with respect to solar cell manufacturing costs. The substantial capital costs associated with manufacturing these cells on a low cost mass production basis may well benefit solar terrestrial uses and other space applications of photovoltaic energy conversion. In this instance, however, the key question is not so much the fixed charges of manufacture but the very substantial projected costs of development. e. The Computation of Unit Costs The computation of per unit costs (mills/kWh), from total dollar costs, requires three separate steps: (1) The per unit calculation of recurring costs with some explicit assumption with respect to the changes in these costs over the life of the system. (2) The calculation of the annual payment required to amortize the capital costs of the system and the expression of this cost on a per unit basis. (3) The calculation of the annual payment required to recover the development (DDT&E) costs and the expression of this factor on a per unit basis. With respect to recurring costs per kWh, the basic mechanics require simply dividing the annual cost by a factor equal to 8,760 times the rated earth output in kW. This approach is valid, however, only if the annual costs are assumed to be constant or already represent some average over the system life. The introduction of an inflation factor must be made explicit (with respect to both time and rate) and its impact on the finally estimated cost per kWh explicitly identified if the resulting estimates are to be meaningfully compared to other estimates for SSPS or competitive terrestrial systems.
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