Accounting for the inflation rate
Inflation refers to the general rate of price increase at which future payments become more expensive. It is relevant in the calculation of follow-up costs as well as for the price increase of future investments. The higher the inflation rate, the more benefitting it is to invest earlier than really necessary.
In order to avoid the influence of possible fluctuations of the general inflation rate, a calculation based on real prices and interest rates (corrected by inflation rate) may be advantageous. For a comparative assessment of energy saving investments, it is irrelevant whether nominal or real costs are used. It is however necessary that the approach is the same across all measure variants and costs estimates.
Inflation is taken into account when calculating the annuity factors and the replacement investment factors.