| Item | Example Value | Notes |
|---|---|---|
| System size | 6.00 kW | Typical home rooftop size. |
| Installed cost | $12,000 | Before rebates and credits. |
| Upfront rebate | $500 | Applied immediately to cost. |
| Year‑1 production | 9,000 kWh | Installer or PV model estimate. |
| Retail / Export rate | $0.18 / $0.08 | Value per kWh used/exported. |
| Self‑consumption | 70% | Higher with daytime loads or battery. |
| O&M / Insurance | $150 / $50 | Recurring annual costs (Year 1). |
| Inverter replacement | Year 12 / $1,200 | Common long-term maintenance item. |
- Production(y) = Production(1) × (1 − degradation)^(y−1)
- Retail(y) = Retail(1) × (1 + escalation)^(y−1)
- Export(y) = Export(1) × (1 + exportEscalation)^(y−1)
- GrossSavings(y) = SelfKWh(y)×Retail(y) + ExportKWh(y)×Export(y)
- NetCashFlow(y) = GrossSavings − O&M − Insurance − Replacements − Loan + Credits
- Cumulative(y) = Cumulative(y−1) + NetCashFlow(y)
- NPV = Σ CashFlow(t) / (1 + discountRate)^t
- IRR = rate where NPV = 0 (estimated)
- Enter the installed cost, rebate, and any Year‑1 incentives.
- Use a realistic Year‑1 production estimate from your site.
- Set your retail and export rates, then choose escalations.
- Adjust self‑consumption to match your daytime usage.
- Add O&M, insurance, and replacement assumptions if known.
- Select cash or loan to include financing effects.
- Press Submit to view payback, profit, and the timeline.
- Use CSV/PDF buttons to share results with stakeholders.
Cash Flow Timeline That Matches Your Bill
This calculator creates a year‑by‑year view so solar is evaluated like an investment. It begins with upfront outlay (cash price or down payment plus fees) and then adds annual net cash flow: energy value minus recurring costs. Incentives are commonly realized early, so the model places the tax credit and any Year‑1 grant as first‑year inflows, shaping a realistic payback curve.
Production, Degradation, and Self‑Consumption
Profit depends on energy output. Enter a credible Year‑1 production estimate in kWh, then apply degradation such as 0.5% per year to reflect aging. Self‑consumption splits production into onsite usage and exports. Onsite kWh are valued at the retail rate, while exported kWh use the export rate, so shifting usage to daytime loads can materially lift lifetime profit.
Retail Escalation and Export Scenarios
Rates rarely stay flat. Separate escalations for retail and export pricing help you test conservative and optimistic cases. A 3% retail escalation with 2% export escalation increases future savings even as production slowly declines. If you have time‑of‑use or seasonal tariffs, use blended annual averages and rerun scenarios to capture a practical range of outcomes.
O&M, Insurance, and Replacements
Operating costs are escalated over time, including maintenance and optional insurance. One‑time replacements are modeled in specific years, such as an inverter change in year 12, to avoid overstating returns. When financing is selected, annual loan payments are subtracted during the term, which highlights early cash‑flow pressure before the loan ends and savings fully accrue.
Payback, NPV, and IRR Metrics
The tool reports payback, NPV, and an estimated IRR. Payback is the moment cumulative cash flow crosses zero, shown in years and months. NPV discounts each year’s cash flow at your chosen discount rate, converting future savings into today’s value. IRR is the break‑even discount rate where NPV equals zero, useful for comparing solar to other long‑term investments. For commercial owners, optional depreciation benefits are estimated using a simplified five‑year schedule and your tax rate, adding another direct cash‑flow lever to stress‑test purchase versus lease alternatives.
What does payback mean in this timeline?
Payback is the point where cumulative net cash flow becomes zero or positive. It reflects when savings and incentives have fully recovered your upfront outlay, including major replacements and loan payments if selected.
Why do retail and export rates have separate escalations?
Onsite energy offsets the retail price you would have paid, while exported energy is compensated under a buyback or feed‑in rate. These two values often change differently over time, so separate escalations improve realism.
How should I choose the self‑consumption percentage?
Estimate how much solar energy you use during daylight hours. Homes with daytime usage, electric water heating, or batteries can reach higher self‑consumption. If unsure, test 50%, 70%, and 90% as scenarios.
Does the loan section calculate a full amortization schedule?
It uses a simplified annual payment approach to capture the cash‑flow impact of financing. For precise month‑by‑month interest allocation, compare with your lender’s amortization table, then rerun the calculator with matched annual totals.
What discount rate should I use for NPV?
Use the return you expect from a comparable low‑risk investment, or your personal hurdle rate. Many users test 4% to 8%. A higher discount rate reduces NPV because future savings are valued less today.
Why include inverter or other replacement costs?
Some components may need replacement during a 20–30 year life. Adding expected replacements prevents overstating profit and helps you compare warranties and equipment quality across quotes.