HOMER Energy Support

Does HOMER Pro account for inflation?

Last Updated: Sep 25, 2019 03:32PM MDT
Yes, but it assumes that all prices escalate at the same rate. With that assumption, inflation can be factored out of the analysis simply by using the annual real interest rate rather than the nominal interest rate. All costs are therefore in constant dollars.

The expected inflation rate under Project Economics models all prices to escalate at the same rate. It is possible, however, to explore the effects of an escalating fuel price by doing a sensitivity analysis on the fuel price.

Another workaround for this is to use the multi-year option where you can mention escalation of individual prices like fuel price or grid price.
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