Lifetime value for construction budgeting
Construction teams use lifetime value to compare solar against other capital upgrades. This calculator converts production and tariff assumptions into a year‑by‑year cash flow, making approval discussions easier. It highlights how incentives reduce the net upfront investment, while energy savings and export credits build value over time. Use it early in design to test roof area options, electrical tie‑in limits, and phasing impacts on budgets.
Energy yield assumptions that move results
Energy yield drives nearly every metric. Set system size from drawings, then enter expected annual production per kW based on orientation, shading, and equipment selection. Degradation accounts for performance decline and prevents overstating long‑term output. Adjust self‑use to match operating schedules, because onsite consumption typically displaces the most expensive energy. When self‑use is low, export compensation becomes more important.
Rates, escalation, and tariff uncertainty
Rates determine the monetary value of each kilowatt‑hour. Retail rate reflects avoided purchases, while export rate reflects what the utility or off‑taker pays for surplus energy. Escalation assumptions matter because small percentage differences compound across decades. Model conservative escalations when tariffs are uncertain, and run multiple scenarios. If export rates are time‑limited, represent the change by lowering escalation or shortening the analysis period.
O&M, insurance, and replacement planning
Real projects include recurring and one‑time costs. Annual O&M captures cleaning, monitoring, and minor repairs; insurance can be added when required by lenders or owners. Replacement cost lets you budget for inverter refresh or major service events, which can materially change payback. Residual value supports end‑of‑life planning, especially when equipment is redeployed, sold, or still producing beyond the study period.
Reading NPV, IRR, payback, and LCOE
Outputs support decision making. NPV shows the present value benefit after discounting future cash flows; a positive NPV generally supports proceeding. IRR summarizes return, but may be unavailable if cash flows never cross zero. Simple and discounted payback indicate liquidity and risk. LCOE benchmarks cost per kWh and helps compare solar to generators or grid supply. The schedule table also exposes the specific years where costs spike, allowing planners to coordinate maintenance with shutdown windows and to verify financing coverage for site owners.