The replacement cost is the cost of replacing a component at the end of its lifetime, as specified by lifetime parameter in the component model. This may be different from the initial capital cost for several reasons:
•Not all of the component may require replacement at the end of its life. For example, the wind turbine nacelle may need replacement but the tower may not.
•The initial capital cost may be reduced or eliminated by a donor organization, but the replacement cost may not.
•You may want to account for the fixed costs (e.g. travel cost) of a visit to the site. At initial construction, these costs are shared by all components, but at replacement time they may not.
•You may want to account for a reduction over time in the purchase cost of a particular technology.
Important: the replacement cost is not meant to account for inflation. All costs in HOMER are real costs, defined in terms of constant dollars. For more information, see that article on the real interest rate.
Replacement cost is abbreviated as Repl. in HOMER's cost input tables.