Net solar benefit and simple payback
Payback is rounded to two decimal years when annual net benefit is positive. “Not reached” means this constant-benefit model cannot recover a positive upfront cost. Zero net upfront cost displays zero years rather than a division by zero.
To estimate generation before entering annual solar output, the Solar Energy Calculator provides an energy-yield calculation.
The formula
Self-used generation is valued at the avoided import price and exported generation at its separate compensation rate. The simple payback divides net initial outlay by a constant annual benefit. Nonpositive benefit has no finite payback for a positive initial cost.
Worked example
A $20,000 system producing 10,000 kWh/year with 60% self-use, a $0.20 import rate, and $0.08 export rate has $1,520 annual energy value. Subtracting $100 maintenance leaves $1,420, giving a simple payback of 14.08 years without upfront incentives.
How to use this calculator
- Enter installed system cost, upfront incentives entered by you using the units shown.
- Set annual solar generation, generation used on site, avoided import price, export compensation, annual maintenance cost.
- Calculate and review simple payback alongside the supporting quantities.
Enter actual applicable incentives
No incentive rate is assumed. Enter only an upfront amount applicable to your project and eligible expenses. Eligibility, payment timing, and financing can change effective cash flows. This arithmetic does not establish tax eligibility or current program availability. Export compensation should follow your utility arrangement, which may differ from the retail import price.
Simple payback omits the value of time
This model holds generation, energy prices, self-use, and maintenance constant. It excludes financing interest, output degradation, inverter replacement, discounting, and future tariff changes. Compare several assumptions and use a cash-flow analysis when making a purchase decision. A short calculated payback does not describe total lifetime return or warranty performance.
Assumptions & limitations
What this calculation assumes
- Annual generation, rates, self-use share, and upkeep remain constant.
What to keep in mind
- Excludes tax advice, financing, discounting, degradation, replacement costs, and tariff changes.
Common questions
Should exported electricity use the import rate?
Use the actual export compensation. Enter the same rate only if the billing arrangement truly values both equally.
What does Not reached mean?
Annual maintenance equals or exceeds the estimated energy value, so this model has no finite recovery time for a positive initial cost.
Are future electricity price increases included?
No. The model uses constant import and export rates and does not discount future cash flows.
Sources & further reading
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