Annualized Cost

The annualized cost of an EES is the cost that, if it were to occur equally in every year in the system lifetime, would give the same net present cost as the actual cash flow sequence associated with the system:

$$\mathcal{C}\_{annualized} = \frac{\mathcal{C}\_{nct}(t\_{MAX})}{\sum\_{t=0}^{t\_{MAX}} P\_{PS}(t)} \tag{8}$$

where *tMAX* is the maximum system lifetime, and *PPS*(*t*) is the power produced by the EES power sources over the same interval. The equation considers all costs from the beginning of simulation to the end of system lifetime, and divides them by the total produced power, with no distinction between whether such power has been used to satisfy load demand or to sell power to the grid.

This cost basically returns the average cost per kWh of consumed energy produced by the system: it is thus a useful metric to compare alternative configurations of the EES and to have a picture of which configuration is more convenient than the others.
