Calculator
Enter costs, incentives, and savings assumptions. Use loan mode if payments matter for your payback timeline.
Formula Used
- Eligible Cost = equipment cost + installation cost
- Tax Credit = (Eligible Cost − rebate) × tax credit %
- Net Cost = Eligible Cost − rebate − Tax Credit
- Year t Savings = base savings × (1+escalation)^(t−1) × (1−degradation)^(t−1)
- Year t Net Cashflow = savings − maintenance − loan payment + residual (final year)
- Discounted Cashflow = net cashflow ÷ (1+discount rate)^t
- Simple Payback = Net Cost ÷ Year‑1 net savings
How to Use This Calculator
- Enter equipment, installation, and your best incentive estimate.
- Add annual savings from bill reduction and any demand-charge benefits.
- Set escalation, degradation, and a discount rate that fits your risk.
- Choose cash or loan mode to reflect how you will pay.
- Click Calculate to view payback and cashflows above the form.
- Use CSV or PDF to share results with partners.
Example Data Table
| Scenario | Eligible cost | Rebate | Credit % | Net cost | Year‑1 net savings | Simple payback |
|---|---|---|---|---|---|---|
| Residential TOU shifting | $9,000 | $1,000 | 20% | $6,400 | $920 | 6.96 yrs |
| Commercial demand reduction | $18,500 | $2,500 | 10% | $14,400 | $2,600 | 5.54 yrs |
| Small system with high rebate | $6,800 | $2,000 | 15% | $4,080 | $650 | 6.28 yrs |
Incentives reshape the upfront investment
Eligible cost equals equipment plus installation, then incentives reduce that total. The model subtracts an upfront rebate first and then applies a credit percentage to the remaining eligible amount. Example: $9,000 eligible cost, $1,000 rebate, and 20% credit yields a $1,600 credit and a $6,400 net cost, which becomes the starting cash outlay.
Savings streams that drive payback
Payback is powered by yearly net savings: bill savings + demand savings + other program revenue − maintenance. Residential time‑of‑use shifting often lands in the $700–$1,200 annual range, while commercial demand-charge plans can exceed $2,000 if peaks are reliably clipped. Adding multiple streams usually shortens payback more than optimizing one stream alone.
Escalation, degradation, and maintenance realism
Savings rarely stay flat. Escalation reflects rising rates or higher avoided costs, while degradation captures aging that limits usable energy or dispatch value. A 3% escalation paired with 2% degradation creates roughly 1% net growth each year. Maintenance can be small but persistent, such as $50–$200 annually for monitoring, service visits, or warranty add‑ons, and can be escalated for inflation.
Discounted payback and NPV for decision quality
Simple payback is intuitive but ignores time value, so discounted cashflows provide a stricter view. At a 6% discount rate, $1,000 received in year five is worth about $747 today. Net present value sums all discounted cashflows, including any final‑year residual value. A positive NPV supports the investment at the chosen discount rate; a negative NPV suggests waiting, resizing, or targeting larger savings.
Financing view for cashflow planning
Loan mode adds scheduled payments to yearly cashflows, which can push breakeven later even when lifetime value is strong. The calculator uses an annuity payment, so a $6,000 loan at 7.5% over seven years is about $1,085 per year. Compare cash and loan results to balance liquidity, interest cost, and risk tolerance. Use the cashflow table to see cumulative totals by year, and confirm whether the project crosses zero before the battery’s modeled life ends.
FAQs
1) How do rebates and credits differ in the calculation?
Rebates reduce eligible cost immediately. The credit is then applied as a percentage to the remaining eligible amount after the rebate, lowering the final net cost.
2) What if my annual savings are uncertain?
Run conservative, expected, and optimistic cases by changing savings and escalation. Payback is most sensitive to yearly net savings, so small changes can shift breakeven by several years.
3) Why use a discount rate, and what value is reasonable?
Discounting reflects that future dollars are worth less than today’s. Many users test 5%–9% depending on financing costs and risk. Higher discount rates reduce NPV and lengthen discounted payback.
4) Does loan mode change NPV and IRR?
Loan mode changes timing by adding payments, which affects breakeven and IRR. NPV can also shift if loan payments extend beyond savings early on, even when total lifetime savings stay similar.
5) How should I set degradation and battery life?
Use warranty terms and expected cycling. A common starting point is 1%–3% annual degradation over 10–15 years. Shorter life or higher degradation reduces later-year savings and can delay payback.
6) What if cumulative cashflow never reaches zero?
If cumulative totals stay negative, the investment does not breakeven under those inputs. Increase incentives, reduce cost, or improve savings assumptions, then re-run the model to see what changes matter most.