Formula used
Installed Cost = (System kW × 1000 × Cost/W) + BOS + Permits
Gross Upfront = Installed Cost + (Installed Cost × Sales Tax%)
Eligible Basis = Gross Upfront − Fixed Rebate − (Gross Upfront × Incentive%)
Tax Credit = Eligible Basis × Tax Credit%
Net Cash Cost = Gross Upfront − Rebate − Incentive − Tax Credit
Year y Production = Year1 Production × (1 − Degradation%)^(y−1)
Year y Savings = (Self kWh × Rate) + (Export kWh × Export Rate)
Cashflow = Savings − O&M − Replacement
NPV = Σ(Cashflow_y / (1 + Discount)^y) − Net Cash Cost
How to use this calculator
Enter system size and installed cost per watt. Add BOS and permit costs to match your scope.
Set production using a realistic factor for location, tilt, and shading. Choose self-use and export rates for your load profile.
Run the calculation, then review net cost, payback, NPV, IRR, and levelized energy cost for procurement decisions.
Capital planning for cash procurement
Cash purchasing a solar system shifts the project to a front‑loaded capital expense, which can stabilize site energy costs and reduce exposure to utility volatility. This calculator helps compare gross installed cost with rebates, incentives, and credits to estimate net cash required. Use it during budgeting to confirm that funding, contingency, and procurement timing align with the construction schedule.
Production and load alignment on job sites
Construction loads are often daytime‑heavy, which can increase self‑use and improve savings. Enter a realistic production factor in kWh per kW‑year, then set self‑use based on shift patterns, temporary facilities, and equipment duty cycles. When site load is known, the tool caps self‑consumed energy to prevent overstating avoided purchases and overstating payback.
Energy value, escalation, and degradation
Annual savings depend on the avoided utility rate for self‑consumed energy and the export credit for surplus energy. The model escalates rates annually to reflect expected price growth and reduces production with module degradation each year. Together, these assumptions create a more realistic long‑term savings curve for evaluating whether cash procurement supports project value targets.
Lifecycle costs and replacement allowances
Even with a cash purchase, long‑term performance requires O&M such as cleaning, inspections, monitoring, and minor repairs. The calculator escalates O&M to reflect inflation and allows a one‑time inverter replacement to avoid overstating lifecycle benefit. These allowances help construction managers compare options consistently and avoid underbudgeting for lifecycle upkeep.
Decision metrics used by stakeholders
Payback indicates when cumulative net savings recover the net cash cost. NPV discounts future cashflows to today’s value using your discount rate, supporting apples‑to‑apples comparisons with other capital uses. IRR estimates the annualized return of the cash investment. LCOE estimates the discounted cost per kWh delivered over the analysis period.
FAQs
1) What does “net cash purchase cost” represent?
It is the estimated upfront cash after subtracting fixed rebates, percent incentives, and an estimated credit. It helps you plan capital required for procurement and installation.
2) How should I pick the production factor (kWh per kW‑year)?
Use site‑specific estimates based on location, tilt, shading, and spacing. If uncertain, run a low and high case to see how sensitive payback and NPV are.
3) What is self‑use and why does it matter?
Self‑use is the portion of solar energy consumed on‑site. It usually carries a higher value than export credits, so higher self‑use typically improves savings and payback.
4) Why include utility escalation and degradation?
Rates often rise over time, while modules slowly produce less energy each year. Modeling both produces a more realistic savings curve for long‑term planning.
5) How is payback calculated in this tool?
Payback is the first year when cumulative net cashflows become positive. Net cashflow equals annual savings minus O&M and any scheduled replacement cost.
6) What does NPV tell a construction decision maker?
NPV converts future savings into today’s value using your discount rate. Positive NPV suggests the cash purchase outperforms the discount‑rate benchmark over the selected period.
7) When should I add an inverter replacement?
Add it when the equipment warranty or expected service life indicates replacement during your analysis period. This prevents overstating returns, especially on longer horizons.