The annual average insolation (energy of sunlight per unit area) striking a fixed solar panel in Buffalo, New York, is 200 W·m−2, while in Phoenix, Arizona, it is 270 W·m−2. In each location, the solar panel converts 21% of the incident energy into electricity. Average annual electricity use in Buffalo is 6000 kW·h at an average cost of $0.15 kW·h, while in Phoenix it is 11,000 kW·h at a cost of $0.09 kW·h.
If the solar panel has a lifetime of 20 years, what price per square meter of solar panel can be justified in each location? Assume that future increases in electricity prices offset the cost of borrowing funds for the initial purchase, so that you need not consider the time value of money in this analysis.
In Buffalo, the total cost should be less than $ per square meter.
In Phoenix, the total cost should be less than $ per square meter.