Battery ROI Calculator

Formula used

How to use this calculator

1. Enter your installed costs and any rebates or incentives.
2. Set battery capacity, DoD, efficiency, and expected annual cycles.
3. Estimate daily extra self‑use enabled by the battery.
4. Add your grid and export rates, plus any demand charge savings.
5. Review Year‑1 savings, payback, NPV, and IRR in the results.
6. Use CSV/PDF downloads to save scenarios and compare options.

Insights

Value drivers that shape returns

Battery ROI depends on how much grid energy you can avoid and what that energy is worth. In this calculator, Year‑1 energy savings come from effective shifted kilowatt‑hours multiplied by the difference between your grid rate and export rate. Demand charge savings, when applicable, can add stable monthly value. Upfront incentives reduce net investment immediately, improving every return metric.

Throughput limits and lifecycle reality

Real savings are capped by usable energy per cycle and annual cycles. Usable energy equals capacity times depth of discharge times round‑trip efficiency. The tool then limits annual shifted energy to the smaller of your daily self‑use estimate and the battery’s throughput. If you set very high daily self‑use, the cap prevents unrealistic results. Cycle life and annual cycles also cap effective analysis years.

Tariffs, export credits, and avoided cost

Rate structure matters. A $0.20 grid rate and $0.06 export credit yields $0.14 per shifted kWh, while $0.15 and $0.10 yields only $0.05. That difference can swing payback by years. If your tariff includes demand charges, even modest reductions can materially improve ROI, because those savings are not tied to energy volume.

Discounting, escalation, and scenario discipline

Financial planning needs time value of money. NPV discounts future net cashflows using your discount rate, while savings escalation can model rising rates. Higher discount rates shrink NPV, and higher escalation increases it, but both should be conservative. Optional replacement cost is applied in the selected year, which can materially change IRR and cumulative cashflow.

Reading payback, NPV, and IRR together

Use simple payback as a quick screen, not a final decision. NPV indicates value after considering timing and risk, and IRR shows the implied annual return when it exists. Compare multiple scenarios by changing self‑use, rates, incentives, and cycles. The cashflow chart helps you see when cumulative savings turn positive and how replacements affect the path. For homes, validate evening usage, solar, and backup needs; for businesses, estimate demand reduction with metered data.

FAQs

What inputs most affect ROI?

Daily extra self‑use, grid versus export rates, and incentives drive results. Capacity and efficiency matter mainly by capping shifted energy through annual throughput.

How should I estimate extra self‑use?

Start with your typical evening load and how much solar would otherwise export. Use smart‑meter intervals if available, then choose a conservative daily kWh value.

Why does the calculator cap shifted energy?

Batteries cannot shift unlimited energy. The cap uses usable kWh per cycle times annual cycles, preventing daily assumptions from exceeding realistic throughput.

What does NPV tell me beyond payback?

NPV discounts future cashflows, reflecting timing and risk. Two systems can share payback but have different NPV if savings occur earlier or replacement costs occur later.

When is IRR shown as not available?

If cashflows never change sign after the initial investment, or change sign multiple times, a single meaningful IRR may not exist. In that case, rely on NPV and cashflow charts.

How do replacements change the outcome?

A replacement cost is subtracted in the selected year, lowering cumulative cashflow and often IRR. It can still be worthwhile if ongoing savings remain strong afterward.

Example data table