Inputs
Example scenario data
| System size (kW) | Installed cost | Annual production | Utility rate | Self-consumption | Net metering | Horizon |
|---|---|---|---|---|---|---|
| 5.0 | $8,000 | 7,500 kWh | $0.18 / kWh | 60% | 80% of retail | 25 years |
How to use this calculator
- Start with your installed cost, incentives, and expected annual production.
- Enter your current utility rate and the export credit percentage.
- Set self-consumption to estimate onsite use versus exported energy.
- Add ongoing costs and any expected inverter replacement year.
- Choose cash or loan, then provide down payment, APR, and term.
- Submit to view the results above the form, then export if needed.
Formulas used
- Net installed cost: EffectiveCost = InstalledCost − UpfrontIncentive.
- Tax credit (modeled in year 1): TaxCredit = EffectiveCost × (TaxCredit% ÷ 100).
- Utility rate growth: Ratey = Rate1 × (1 + Escalation%)y−1.
- Production degradation: Prody = Prod1 × (1 − Degradation%)y−1.
- Onsite and export split: Onsite = min(Prod × Self%, Usage). Export = max(0, Prod − Onsite).
- Energy value: Value = Onsite × Rate + Export × (Rate × NetMetering%).
- Loan payment (monthly): PMT = P × r(1+r)n ÷ ((1+r)n − 1).
- Net cashflow: CFy = Value + TaxCredit − O&M − Replacement − DebtService.
- Breakeven year: first year where cumulative ΣCF ≥ 0.
- NPV: Σ CFt ÷ (1 + DiscountRate)t.
Breakeven timeline and yearly cashflow drivers
This calculator estimates when cumulative savings exceed your upfront outlay. Year 0 records the net installed cost, then each later year adds energy value, incentives, and cost deductions. Breakeven occurs in the first year where the running total becomes positive. For many households, breakeven commonly falls between 6 and 14 years, but it can shift quickly if system cost, export credit, or consumption patterns change.
Utility rate escalation and savings compounding
Electricity prices rarely stay flat over multi‑decade horizons. The model grows the utility rate by your escalation assumption and applies that higher rate to onsite and exported energy. A 1% increase in escalation can materially raise lifetime savings because later‑year kWh are priced higher. If your current rate is $0.18/kWh, moving escalation from 2% to 4% lifts year‑20 rates by roughly 49% versus 22%, amplifying the cashflow curve over time.
Self‑consumption and export credit effects
Onsite use is valued at the full retail rate, while exports receive a percentage of retail based on your net metering credit. If you self‑consume 70% of production instead of 50%, more kWh earn the top rate, improving breakeven and NPV. When export credit is 80% of retail, each exported kWh is worth 20% less than onsite. Batteries, load shifting, or daytime appliance use can raise self‑consumption.
Financing, discounting, and investment metrics
Cash purchases use the full net cost at year 0. Loan purchases use the down payment at year 0 and add annual debt service during the term. NPV discounts future cashflows by your discount rate to reflect time value of money. IRR estimates the rate that makes NPV equal to zero, which helps compare solar to other investments with different risk and liquidity.
O&M and replacement planning for realistic projections
Annual O&M captures cleaning, monitoring, or insurance riders and can be escalated for inflation. Replacement costs model major events such as inverter change‑out, often in years 10–15 for certain designs. Including a $1,200 replacement in year 12 reduces the cumulative curve temporarily, but it may still preserve a strong lifetime benefit. Use your system’s warranty terms to pick a replacement year that matches your equipment profile.
FAQs
1) What is the breakeven year shown in the results?
It is the first year where cumulative net cashflow becomes positive. It includes incentives, O&M, replacements, and loan payments based on your inputs.
2) How is exported energy valued?
Exported kWh are valued at your utility rate multiplied by the net metering credit percentage. Onsite kWh are valued at the full utility rate.
3) Why can IRR show as N/A?
IRR requires cashflows to change sign over time. If the model never produces a sign change within the horizon, the IRR calculation cannot be bracketed reliably.
4) How should I estimate annual production?
Use an installer proposal, a system design report, or historical monitoring. If unsure, start with 1,200–1,700 kWh per kW per year and refine later.
5) Do fixed monthly charges reduce after solar?
Many utilities keep fixed charges unchanged. This tool includes fixed charges in the baseline bill for context, but savings are calculated from energy charges and export credits.
6) What discount rate should I use?
A common range is 4%–8% for household decisions. Higher rates reduce NPV and emphasize earlier savings, while lower rates give more weight to long‑term benefits.