Solar Scenario Comparison Calculator

Example data table

This sample reflects a typical commercial roof comparison.

Formula used

• Installed Cost = System Size × Installed Cost per kW
• Rebate = Installed Cost × Incentive%
• Tax Credit = (Installed Cost − Rebate) × Tax Credit%
• Net System Cost = Installed Cost − Rebate − Tax Credit
• Year t Energy = Size × Production × (1 − Degradation)^(t−1)
• Year t Rate = Initial Rate × (1 + Escalation)^(t−1)
• Year t Savings = Year t Energy × Year t Rate
• Year t Net Cashflow = Savings − O&M − Replacement Events
• NPV = Σ(Net Cashflow_t / (1 + Discount)^t), including year 0 cost
• Payback = first year cumulative cashflow becomes positive
• LCOE = PV(all costs) / PV(all energy)
• CO₂ Avoided = Σ(Annual Energy × Grid Emissions Factor)

How to use this calculator

1. Set analysis years, utility rate, escalation, and discount rate.
2. Enter three solar options using your budgetary quotes.
3. Use realistic production values from a site model.
4. Add incentives and a replacement event if applicable.
5. Click Compare Scenarios to view results above the form.
6. Download CSV for spreadsheets and PDF for approvals.

Project baseline and boundary

Start by defining what the solar system replaces on your construction site. Use the delivered utility rate, include demand riders if they affect energy cost, and choose an analysis period aligned with equipment life. This calculator assumes all production offsets grid purchases at the stated rate, so keep net metering limits and curtailment rules consistent across scenarios.

Comparable scenario inputs

For each scenario, enter the same type of system size basis and cost scope. Installed cost per kilowatt should include modules, structure, electrical balance, permitting, and commissioning. Production in kilowatt-hours per kilowatt-year should come from a site-specific model using tilt, azimuth, shading, and weather. Keep degradation realistic and apply a single replacement event where major inverter work is expected.

Cashflow mechanics and metrics

The model builds annual net cashflow from energy savings minus O&M and replacement costs. Net system cost is reduced by incentives and tax credits entered as percentages, producing a conservative starting investment. NPV discounts each year using your selected discount rate, IRR estimates the break-even return, and payback is the first time cumulative cashflow becomes positive.

Decision signals for estimators

Use NPV to select the strongest value option when capital is constrained. Use LCOE to compare long-run energy cost when tariffs or escalation assumptions vary. If two scenarios have similar NPV, prefer the one with lower replacement exposure and steadier annual cashflows, because construction schedules can amplify downtime risk and maintenance access costs. Run a quick sensitivity by changing escalation and discount within realistic ranges. If rankings flip, treat the project as rate-sensitive and consider securing a fixed-price energy contract or adding contingency to the installed cost line before finalizing your recommendation.

Documentation for approvals

After running comparisons, export CSV for bid books and internal reviews. Export PDF for client sign-off and funding discussions. Record key assumptions beside the output table: utility rate, escalation, discount, and replacement year. This creates a defensible narrative that aligns engineering expectations with procurement and site operations.

FAQs

1) What does “best by NPV” mean here?

It is the scenario with the highest net present value under your discount rate. Higher NPV means greater value today after discounting future savings and costs.

2) Why can IRR show “n/a”?

IRR needs a cashflow pattern that crosses zero in present value terms. If cashflows do not change sign appropriately, or have multiple sign changes, a single meaningful IRR may not exist.

3) How should I choose the discount rate?

Use your organization’s hurdle rate or weighted cost of capital, adjusted for project risk. A higher discount rate reduces the value of future savings and typically favors faster-payback options.

4) Does the calculator include demand charges?

No. It values energy using a single $/kWh rate. If demand charges are material, translate them into an effective blended rate or run a separate demand impact study.

5) What production value should I enter?

Use modeled annual production per installed kW from a site-specific tool, accounting for shading and weather. Avoid optimistic assumptions; accurate production is usually more important than minor cost differences.

6) How are incentives and tax credits applied?

They reduce the starting investment by percentage inputs: incentive first, then tax credit on the reduced base. This is a simplified treatment suitable for comparisons, not a tax filing.