Calculator Inputs
Use the responsive grid below. It shows three columns on large screens, two on smaller screens, and one on mobile.
Plotly Graph
The chart compares cumulative cost per kWh with cumulative utility savings across the project life.
Example Data Table
| Input | Example Value | Unit | Purpose |
|---|---|---|---|
| Installed system cost | 18,000 | $ | Total quoted cost before incentives. |
| Incentives and rebates | 4,000 | $ | Credits, rebates, or grants reducing upfront cost. |
| Year 1 output | 9,500 | kWh | Estimated first-year production from the system. |
| Degradation rate | 0.6 | % | Expected yearly decline in panel production. |
| Annual maintenance | 250 | $ | Routine service, cleaning, and minor upkeep. |
| Project life | 25 | Years | Total analysis period for cost and output. |
| Discount rate | 5.0 | % | Used for present-value adjustments. |
| Utility rate | 0.18 | $/kWh | Used to estimate annual avoided energy cost. |
| Financing rate | 4.5 | % | Loan rate when the system is financed. |
| Financing term | 10 | Years | Length of repayment schedule. |
Formula Used
1. Net System Cost
Net System Cost = Installed Cost − Incentives
2. Yearly Output
Output in Year t = Year 1 Output × (1 − Degradation Rate)t−1
3. Annual Loan Payment
Loan Payment = P × [r(1+r)n] ÷ [(1+r)n − 1]
4. Discounted Project Cost
Discounted Cost = Upfront Cost or Loan Payments + Discounted Maintenance
5. Discounted Energy
Discounted Energy = Σ [Yearly Output ÷ (1 + Discount Rate)t]
6. Simple Cost per kWh
Simple Cost per kWh = Nominal Project Cost ÷ Lifetime Energy Output
7. Discounted Cost per kWh
Discounted Cost per kWh = Discounted Project Cost ÷ Discounted Lifetime Energy
8. Annual Savings
Annual Savings = Yearly Output × Utility Rate
9. Payback Period
Payback occurs when cumulative savings exceed cumulative project costs.
How to Use This Calculator
- Enter the full installed system cost before tax credits or rebates.
- Subtract expected incentives by entering them in the rebates field.
- Use your installer estimate for first-year energy output.
- Add a realistic degradation rate and yearly maintenance budget.
- Set project life and discount rate for long-term analysis.
- Enter your current utility rate to estimate avoided energy cost.
- Include financing rate and term if the system is loan-funded.
- Press calculate to see cost per kWh, savings, and payback.
- Download the result summary as CSV or PDF if needed.
Frequently Asked Questions
1. What does solar cost per kWh mean?
It shows how much each unit of solar electricity effectively costs after considering installation, incentives, maintenance, financing, system life, and energy production.
2. Why does degradation matter?
Panels usually produce slightly less electricity each year. Including degradation makes lifetime output estimates more realistic and improves cost-per-kWh accuracy.
3. Should I include tax credits and rebates?
Yes. Incentives reduce your effective system cost. That lower net cost can meaningfully improve both payback period and final cost per kWh.
4. Why is discount rate included?
Discount rate adjusts future costs and energy to present value. It helps compare long-term solar investments using time-value-of-money logic.
5. What if my system is fully paid upfront?
Enter zero financing years. The calculator will treat the net system cost as an upfront expense and skip annual loan payments.
6. Is lower solar cost per kWh always better?
Usually yes, but compare it with your utility rate, roof conditions, maintenance plan, panel quality, and financing terms before deciding.
7. Can I compare multiple solar quotes here?
Yes. Run the calculator several times with different assumptions. Compare simple cost, discounted cost, financing burden, and payback period.
8. Does maintenance really affect results much?
It can. Even modest yearly maintenance costs add up over decades and may noticeably change lifetime project cost and final energy cost.