Plan your solar investment with detailed payback insights. Adjust incentives, tariffs, and maintenance assumptions easily. Review yearly savings and know your break-even date fast.
| Scenario | System Cost | Incentives | Annual kWh | Rate | Escalation | Degradation | O&M | Years | Discount |
|---|---|---|---|---|---|---|---|---|---|
| Typical home | 12,000 | 2,000 | 7,500 | 0.18 | 3% | 0.5% | 150 | 25 | 5% |
| High tariff | 15,500 | 3,500 | 9,200 | 0.28 | 4% | 0.6% | 180 | 25 | 6% |
| Low maintenance | 10,800 | 1,200 | 6,900 | 0.16 | 2% | 0.4% | 75 | 20 | 5% |
Solar payback is primarily shaped by net upfront cost, usable generation, and the avoided utility price per kilowatt-hour. Incentives reduce the initial investment, while higher tariffs and escalation accelerate yearly savings. Maintenance and inverter replacements reduce net cashflow, so modeling realistic O&M protects your estimate from optimism bias. If you finance the system, treat interest and fees separately so payback reflects true cash movement, not just bill reduction.
The projection table decomposes savings into gross avoided energy cost and annual O&M, then tracks cumulative totals. When cumulative cashflow crosses zero, the system has recovered its net cost. A smooth estimate is produced by interpolating within the crossing year, which is useful when net savings vary year to year. Review early years for data entry errors, because small rate mistakes compound across decades.
Production generally declines each year as panels age, while electricity prices often rise over time. These opposing forces determine whether savings accelerate or flatten. A modest degradation rate can be offset by rate escalation, but low escalation combined with higher degradation delays breakeven. Capturing both trends improves comparability between system sizes and sites. In hot climates, performance losses can be seasonal, so average kWh should be grounded in local irradiance estimates.
Simple payback treats a dollar today the same as a dollar ten years from now. Discounting corrects that by valuing future cashflows less, producing NPV. Positive NPV suggests the project beats your chosen discount rate. The calculator also estimates IRR, the rate where NPV equals zero, offering a single benchmark for comparison. Use the same discount rate across projects to keep comparisons fair and consistent.
Combine payback timing with risk checks. Stress-test assumptions by raising O&M, lowering production, or reducing escalation to see sensitivity. Compare scenarios using consistent analysis years and discount rates. If payback is close to equipment warranty periods, consider reserves for component replacement. Document assumptions so you can revisit the model after new bills. A clear record also helps when evaluating upgrades, batteries, or tariff changes later periodically.
It is the installed system cost minus any upfront incentives or rebates you enter. It represents the year‑zero cash outflow used to start cumulative payback tracking.
You can skip discounted payback, but a discount rate is still useful for NPV. It reflects your opportunity cost, inflation expectations, and risk tolerance.
Use conservative, documented assumptions. Degradation is typically a small annual percentage, while escalation can be informed by your historical bills or regulator forecasts.
This version values production at your entered electricity rate. If export credits differ, adjust the effective rate or reduce annual kWh to represent only self‑consumed energy.
High discount rates and late‑year savings can reduce present value. Payback focuses on breakeven timing, while NPV measures value after accounting for time and risk.
IRR requires cashflows that change sign in a way that creates a solvable zero‑NPV rate. Very small savings, short horizons, or unusual patterns can prevent a stable IRR.
Important Note: All the Calculators listed in this site are for educational purpose only and we do not guarentee the accuracy of results. Please do consult with other sources as well.