Battery Break Even Calculator

Model payback with tariffs, incentives, and battery performance. Track yearly cash flows and financial outcomes. Download a clean report for quick sharing today, anytime.

Costs and incentives
Equipment price before incentives.
Labor, permits, and wiring.
Enter total credits or rebates.
Performance assumptions
Energy you can reliably use.
How often you charge/discharge yearly.
Typical range: 0.85 to 0.95.
Reduces shifted energy each year.
Expected useful life for payback view.
Cash flow table length (max 30).
Tariffs and value streams
Rate you avoid during expensive hours.
Rate used to charge the battery.
Optional: outage protection value.
If you pay demand charges.
Set both fields to use demand savings.
Monitoring or service allowances.
Discounting
Reflects risk and time value of money.
Notes
This tool estimates arbitrage savings from shifting energy between off-peak and peak prices. Real-world results depend on your tariff rules, export credits, and usage patterns.
Example data table
Sample inputs and a simplified 5-year view.
Item Sample value Why it matters
Net upfront cost$8,800Higher upfront delays payback.
Usable capacity10 kWhSets how much energy you shift.
Cycles per year250More cycles usually raise savings.
Efficiency90%Losses reduce shifted energy.
Peak / off-peak$0.32 / $0.16The spread drives arbitrage value.
Maintenance$80/yearRecurring costs reduce net benefit.
Year Net benefit Cumulative Interpretation
1$3,600-$5,200Still recovering upfront cost.
2$3,490-$1,710Degradation slightly lowers savings.
3$3,385$1,675Crosses simple break-even.
4$3,280$4,955Positive net savings build.
5$3,180$8,135Longer life increases total return.
Formula used
  • Net upfront cost = (System cost + Installation) − Incentives
  • Shifted energy (Year 1) = Usable kWh × Cycles/year × Efficiency
  • Shifted energy (Year y) = Shifted energy (Year 1) × (1 − Degradation)^(y−1)
  • Arbitrage savings (Year y) = Shifted energy (Year y) × (Peak rate − Off-peak rate)
  • Demand savings = Demand reduction (kW) × Demand charge × 12
  • Net benefit (Year y) = Arbitrage + Demand savings + Backup value − Maintenance
  • Discounted benefit (Year y) = Net benefit ÷ (1 + Discount rate)^y
  • Break-even occurs when cumulative totals reach zero or more.
IRR is estimated from the cash-flow series using a bisection search when a solution exists.
How to use this calculator
  1. Enter purchase, installation, and total incentives to get net upfront cost.
  2. Set usable capacity, cycles per year, efficiency, and degradation rate.
  3. Provide your peak and off-peak prices to estimate arbitrage value.
  4. Add optional backup and demand-charge savings, if applicable.
  5. Choose a discount rate to see discounted payback and NPV.
  6. Click Calculate, then download CSV or PDF for records.

Cost drivers that shape payback

Upfront cost is the starting hurdle. Net upfront cost equals system cost plus installation minus incentives. A larger rebate reduces the recovery period immediately, while higher installation costs often delay simple payback by one or more years. Maintenance is applied annually, so even modest service costs can materially reduce cumulative totals over long horizons.

Energy shifted per year

Year‑one shifted energy is usable capacity multiplied by cycles per year and efficiency. The calculator then reduces shifted energy by the degradation rate each year. Because arbitrage savings are shifted energy times the peak–off‑peak spread, payback is most sensitive to the rate spread and cycling frequency. A small increase in peak price can raise annual savings more than an equivalent reduction in equipment cost.

Cash flow and break-even timing

The cash‑flow table reports yearly net benefit, cumulative benefit, and discounted cumulative benefit. Simple break‑even occurs when cumulative benefit reaches zero or higher. If cumulative stays negative through the analysis horizon, the system does not break even under the assumptions. Positive net savings over battery life indicates the battery repays its cost and continues delivering value.

Discounting and value today

Discounting converts future benefits into today’s dollars using the discount rate. The discounted break‑even year can be later than the simple break‑even year because later savings are worth less. NPV summarizes all discounted benefits minus net upfront cost; an NPV above zero suggests the project clears the chosen discount rate. The chart helps you see when discounted cumulative crosses the zero line.

Interpreting results for decisions

Use the visualization to compare the cumulative and discounted cumulative lines. When both cross above zero early, the economics are strong. If only the simple line crosses, the project may be acceptable for risk‑tolerant buyers but weaker under conservative discounting. Add backup value or demand savings only when you can justify them with your tariff or outage history. Check assumptions yearly and update rates whenever your utility plan changes significantly.

FAQs

What does break-even mean here?

Break-even is the first year when cumulative net benefits reach zero or above. Discounted break-even uses discounted cumulative values, reflecting the time value of money at your chosen discount rate.

Why can discounted break-even be later?

Discounting reduces the present value of future savings. Even if the battery pays back in simple dollars, discounted totals may take longer to cross zero because later benefits count less today.

How should I choose cycles per year?

Use your expected dispatch frequency. Daily cycling is about 365, but many households cycle less due to weather, export rules, or comfort preferences. Overstating cycles can overstate savings.

What if peak and off-peak rates are close?

A small rate spread reduces arbitrage savings. In that case, payback often depends more on demand-charge reductions or quantified backup value than on time-of-use shifting alone.

Does the calculator include degradation?

Yes. Shifted energy declines each year by the annual degradation rate. That lowers yearly arbitrage savings over time, which is why long horizons can show slower gains than year one.

Can I download results without recalculating?

After you run a calculation, the file stores the latest results in a session. Use the Download CSV or Download PDF buttons to export the most recent output instantly.

Disclaimer: Estimates are informational only and not financial advice.

Related Calculators

Battery Storage Payback CalculatorBattery Backup Time CalculatorBattery Autonomy CalculatorBattery Usable Capacity CalculatorBattery Degradation Cost CalculatorBattery Replacement Cost CalculatorBattery ROI CalculatorBattery Savings CalculatorDemand Charge Reduction CalculatorSolar Excess Capture Calculator

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.