Using the Solar Generation & Payback Calculator
Use equivalent full-sun hours rather than daylight hours, then apply a performance factor for the modeled system. Set self-use and export prices separately because avoided retail imports and exported electricity often have different financial values.
Worked example
Use the example inputs below to reproduce this result. These are the form's starting values, not recommended targets. Changing your inputs updates your result above; this worked example stays fixed for comparison. Results are rounded for display.
Example inputs
- System size (kW)
- 5
- Equivalent full-sun hours per day
- 4
- Performance factor (%)
- 80
- Net installed cost after confirmed incentives
- 300000
- Share of generated energy used on-site (%)
- 70
- Avoided import price per kWh
- 8
- Export payment per kWh
- 3
- Annual maintenance cost
- 3000
- Annual generation degradation (%)
- 0.5
- Annual tariff escalation (%)
- 0
- Annual discount rate (%)
- 6
- Projection years
- 25
Example result
- Year-one generation (kWh)
- 5,840
- Year-one net saving
- 34,960
- Simple payback (years)
- 8.7643617
- Net present value
- 125,605.16
- Undiscounted net after initial cost
- 519,183.92
- Lifetime generation (kWh)
- 137,566.76
- Annual cash-flow schedule
- Year 1: 5840.0 kWh; net cash 34960.00; cumulative -265040.00 Year 2: 5810.8 kWh; net cash 34770.20; cumulative -230269.80 Year 3: 5781.7 kWh; net cash 34581.35; cumulative -195688.45 Year 4: 5752.8 kWh; net cash 34393.44; cumulative -161295.01 Year 5: 5724.1 kWh; net cash 34206.48; cumulative -127088.53 Year 6: 5695.5 kWh; net cash 34020.44; cumulative -93068.09 Year 7: 5667.0 kWh; net cash 33835.34; cumulative -59232.75 Year 8: 5638.6 kWh; net cash 33651.16; cumulative -25581.59 Year 9: 5610.4 kWh; net cash 33467.91; cumulative 7886.32 Year 10: 5582.4 kWh; net cash 33285.57; cumulative 41171.89 Year 11: 5554.5 kWh; net cash 33104.14; cumulative 74276.03 Year 12: 5526.7 kWh; net cash 32923.62; cumulative 107199.65 Year 13: 5499.1 kWh; net cash 32744.00; cumulative 139943.65 Year 14: 5471.6 kWh; net cash 32565.28; cumulative 172508.93 Year 15: 5444.2 kWh; net cash 32387.46; cumulative 204896.39 Year 16: 5417.0 kWh; net cash 32210.52; cumulative 237106.91 Year 17: 5389.9 kWh; net cash 32034.47; cumulative 269141.37 Year 18: 5363.0 kWh; net cash 31859.29; cumulative 301000.67 Year 19: 5336.2 kWh; net cash 31685.00; cumulative 332685.66 Year 20: 5309.5 kWh; net cash 31511.57; cumulative 364197.23 Year 21: 5282.9 kWh; net cash 31339.01; cumulative 395536.25 Year 22: 5256.5 kWh; net cash 31167.32; cumulative 426703.57 Year 23: 5230.2 kWh; net cash 30996.48; cumulative 457700.05 Year 24: 5204.1 kWh; net cash 30826.50; cumulative 488526.55 Year 25: 5178.1 kWh; net cash 30657.37; cumulative 519183.92
Method and assumptions
Year-one generation = kW × equivalent sun hours × 365 × performance factor. Degradation applies annually; self-use offsets import price and exported energy earns supplied export price. Both prices escalate at the same supplied rate; maintenance is constant nominal currency. Cash flows occur at year end for NPV. Simple payback interpolates within a year assuming even cash flow. No battery, financing, shading time-series, replacement costs or automatically inferred subsidies/net-metering rules.
Reference: pvwatts.nrel.gov — method and further reading
Distinguish a model from a circuit specification
Electrical calculations describe the assumptions entered in the form. Real components, cables and supplies also have ratings, tolerances and operating conditions. Confirm whether the model is for DC resistance, energy over time or another specific quantity. A mathematically consistent result is not by itself a complete design or installation check.
Common question
Why can simple payback look positive while NPV is negative?
Simple payback ignores the time value of money and records when undiscounted cash flow covers the initial cost. Net present value discounts future cash flow using your supplied rate. A slowly paying project can recover nominal cost while still failing that discounted-value test.