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Location & System

Financials

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About

Solar is an asset class. Like any investment, it requires detailed Cash Flow Analysis. This professional tool goes beyond simple multiplication. It calculates the Levelized Cost of Energy (LCOE), factors in loan interest (amortization), Federal/State Tax Credits (ITC), and utility rate inflation.

We use historical solar irradiance data for major global cities to predict yield. The model generates a year-by-year balance sheet, highlighting the "Break-Even Year" where cumulative savings surpass the net capital cost. It also visualizes the environmental dividend in tangible carbon metrics.

solar roi investment calculator renewable energy payback period tax credit

Formulas

We calculate the Net Present Value (NPV) and cumulative cash flow CFn for year n:

CFn = (Eyield × Relec × (1+i)n) Payloan Maint

Loan payments are calculated using the standard amortization formula:

P = L × r(1+r)n(1+r)n 1

Reference Data

CityPeak Sun HoursAvg Elec Cost ($/kWh)CO2 Intensity (lb/kWh)
Phoenix, AZ6.50.130.95
Los Angeles, CA5.60.260.55
New York, NY4.00.220.80
Miami, FL5.30.140.92
London, UK2.90.340.58
Berlin, DE3.10.400.85
Sydney, AU4.60.281.30
Tokyo, JP3.80.261.10
Dubai, UAE6.50.081.05
Johannesburg, ZA5.80.152.00
Toronto, CA3.40.120.10
Madrid, ES5.10.300.60

Frequently Asked Questions

In the US, the Investment Tax Credit (ITC) allows you to deduct 30% of the cost of installing a solar energy system from your federal taxes. This significantly reduces the net cost and shortens the payback period.
Yes. We apply a standard degradation rate of 0.5% per year. This means in Year 20, your system is calculated to produce roughly 90% of what it produced in Year 1.
Simply set the "Loan Term" to 0 or the "Down Payment" to 100%. The calculator will remove interest payments from the equation, showing an instant ROI improvement.