Calculator Inputs
Example Data Table
These sample rows illustrate how the annual comparison table is structured. Your results will be generated from the inputs you enter above.
| Year | Baseline bill | Solar bill | Lease payment | Extras | Savings |
|---|---|---|---|---|---|
| 1 | $2,160.00 | $360.00 | $1,560.00 | $0.00 | $240.00 |
| 2 | $2,224.80 | $370.80 | $1,591.20 | $0.00 | $262.80 |
| 3 | $2,291.54 | $381.92 | $1,623.02 | $90.00 | $196.60 |
Formula Used
Baseline utility bill (year y): Baseline(y) = Use(y) × Rate(y)
Utility rate escalation: Rate(y) = Rate₁ × (1 + UtilityEsc)^(y−1)
Energy production with degradation: Prod(y) = Prod₁ × (1 − Degradation)^(y−1)
Bill with solar (simplified net metering): Purchased = max(0, Use − Prod), Exported = max(0, Prod − Use). SolarBill(y) = Purchased×Rate − Exported×Rate×ExportFactor (floored at 0).
Annual lease payment: Lease(y) = 12×Monthly₁×(1 + LeaseEsc)^(y−1)
Annual savings: Savings(y) = Baseline(y) − (SolarBill(y) + Lease(y) + Extras(y))
NPV of savings: NPV = −Upfront + Σ[ Savings(y) / (1 + DiscountRate)^y ]
How to Use This Calculator
- Enter your annual electricity use and your current utility rate.
- Add utility escalation and export credit factor to match your tariff.
- For each lease option, enter first-year production and payment details.
- Include extras like monitoring, maintenance, and inverter replacement if needed.
- Choose a discount rate to value future savings in today’s dollars.
- Click Compare Leases to view results above the form, then download CSV or PDF.
Project Notes
Why lease comparison matters on construction budgets
Solar leases are often evaluated alongside roofing, electrical upgrades, and long‑term O&M. This calculator converts those contract terms into a year‑by‑year cash view, so you can test whether savings survive real escalation and operating costs. Comparing offers early reduces change orders and helps align procurement with the project pro forma. For tenant builds, it also clarifies how lease costs interact with CAM recovery and energy‑related allowances in the schedule of values.
Inputs that typically move results the most
Utility rate and escalation usually dominate the baseline curve, while lease escalation sets the payment slope. In many markets, escalation assumptions of 0–3% for lease payments and 2–5% for utility pricing can swing lifetime savings by thousands. Production and degradation (often 0.3–0.7% per year) drive how much energy is offset over time. When production is close to consumption, the export factor becomes critical because small billing rule changes can dominate outcomes.
Understanding NPV, effective cost, and break‑even
Total savings is the simple difference between baseline utility spend and total out‑of‑pocket costs. NPV discounts those annual savings back to today using your discount rate, which is useful for comparing options with different escalators or upfront fees. Effective cost per kWh divides total out‑of‑pocket by total modeled consumption, producing a single comparable rate.
Risk adjustments to match contract and site realities
If your tariff has minimum bills, set export credit conservatively and review the “solar bill” floor. If maintenance is excluded, model a realistic annual service budget and escalation. For critical facilities, include inverter replacement at a planned year. On multi‑phase jobs, reflect load growth if additional equipment or tenants will increase demand.
Using reports for approvals and stakeholder alignment
The downloadable CSV supports bid tab reviews and can be attached to financial approval packages. The PDF summary is intended for quick circulation to owners, lenders, and subcontractors. Document your key assumptions (rate, escalation, export credit, and discount rate) so later scope revisions remain traceable and defensible.
FAQs
1) What does the export credit factor mean?
It scales the value of exported energy. Use 1.00 for full retail net metering, or a lower value when exports are credited at avoided cost or a reduced tariff rate.
2) How do I choose a discount rate?
Use your cost of capital or required return for similar projects. A higher discount rate reduces the present value of future savings and favors options with lower upfront costs.
3) Do both options need the same term?
They can differ, but comparisons are clearest when terms match. If terms differ, interpret the shorter option as ending earlier and consider what happens after the lease expires.
4) Why can the solar bill show as zero?
Some tariffs do not pay cash for net exports. The model floors the solar utility bill at zero to avoid negative bills, which keeps results conservative for many billing structures.
5) Can I include inverter replacement or major repairs?
Yes. Enter the year you expect the cost and the replacement amount. The calculator adds it as an “extra” cost in that specific year, affecting savings and NPV.
6) What if my first-year production estimate is uncertain?
Run sensitivity cases. Try a low, expected, and high production value, then compare how NPV and break‑even move. This helps quantify the impact of shading, soiling, and commissioning variance.