Solar Cost Benefit Calculator

Calculator Inputs

System Size (kW)

Installed DC system capacity.

Installed Cost ($)

Total turnkey project cost before incentives.

Incentives and Rebates ($)

Tax credits, grants, or rebates.

Annual Generation (kWh)

Expected year one solar production.

Self Consumption (%)

Share of solar used on site.

Grid Tariff ($/kWh)

Retail electricity price avoided.

Export Tariff ($/kWh)

Credit received for exported power.

Tariff Escalation (%)

Expected annual rate growth.

Panel Degradation (%)

Annual production decline factor.

Year One O&M Cost ($)

Cleaning, servicing, monitoring, and insurance.

O&M Escalation (%)

Annual increase in operating cost.

Analysis Period (Years)

Project evaluation horizon.

Discount Rate (%)

Required return for present value analysis.

Inverter Replacement Year

Set zero when not applicable.

Inverter Replacement Cost ($)

One time replacement allowance.

Carbon Offset (kg/kWh)

Avoided emissions for each solar kilowatt-hour.

Carbon Value ($/ton)

Optional monetized carbon benefit.

Reset

Example Data Table

Scenario	System Size (kW)	Installed Cost	Annual Generation (kWh)	Self Consumption	Grid Tariff	Export Tariff	Analysis Years
Urban Home	6.0	$8,900	9,400	70%	$0.17	$0.07	25
Retail Shop	18.0	$24,800	28,900	82%	$0.19	$0.08	20
Small Warehouse	50.0	$62,500	79,200	88%	$0.16	$0.06	25

Formula Used

1. Net Initial Investment
Net Initial Investment = Installed Cost − Incentives

2. Annual Production
Annual Production_y = Year One Generation × (1 − Degradation Rate)^(y−1)

3. Self Used and Exported Energy
Self Used = Annual Production × Self Consumption Ratio
Exported = Annual Production − Self Used

4. Annual Gross Benefit
Gross Benefit = (Self Used × Grid Tariff_y) + (Exported × Export Tariff_y) + Carbon Benefit

5. Tariff Escalation
Tariff_y = Base Tariff × (1 + Tariff Escalation)^(y−1)

6. Annual Net Cash Flow
Net Cash Flow = Gross Benefit − O&M Cost − Replacement Cost

7. Net Present Value
NPV = −Net Initial Investment + Σ [Net Cash Flow_y ÷ (1 + Discount Rate)^y]

8. ROI
ROI (%) = [(Lifetime Net Cash In − Net Initial Investment) ÷ Net Initial Investment] × 100

9. Benefit Cost Ratio
Benefit Cost Ratio = Present Value of Benefits ÷ Present Value of Costs

10. Levelized Cost of Energy
LCOE = Present Value of Costs ÷ Present Value of Lifetime Generation

How to Use This Calculator

Enter the solar system size and total installed cost.
Add rebates, credits, or grants in the incentives field.
Provide expected first year generation in kilowatt-hours.
Set how much solar energy will be used on site.
Enter retail and export electricity prices.
Include rate escalation, panel degradation, and annual O&M cost.
Add discount rate and any inverter replacement assumptions.
Optionally monetize carbon benefits using offset and carbon value.
Click the calculate button to see the summary above the form.
Use the CSV and PDF buttons to export the report.

FAQs

1. What does this calculator estimate?

It estimates project payback, NPV, IRR, ROI, benefit cost ratio, levelized energy cost, yearly cash flow, and lifetime savings from a solar installation.

2. Why is self consumption important?

Self consumed solar usually offsets higher retail electricity prices, while exported energy often earns a lower credit. Higher self consumption often improves solar economics.

3. What is tariff escalation?

Tariff escalation models future electricity price increases. Rising utility prices generally improve long term savings because each self used solar unit offsets a more expensive grid unit.

4. Why include panel degradation?

Solar modules slowly produce less electricity over time. Degradation reduces future output, which slightly lowers future savings and affects lifetime benefit estimates.

5. What does NPV tell me?

NPV compares discounted future cash flows with today’s investment. A positive NPV suggests the project creates value above the chosen discount rate.

6. What is the difference between payback and discounted payback?

Simple payback ignores the time value of money. Discounted payback considers required return, making it a stricter and often longer recovery measure.

7. Should I add inverter replacement cost?

Yes, when replacement is expected during the study period. Including it makes the projection more realistic and prevents overstating lifetime profit.

8. Can this calculator be used for homes and businesses?

Yes. It works for residential, commercial, agricultural, and institutional systems as long as the energy, tariff, incentive, and cost assumptions are appropriate.