How the annual solar-value model works
The calculator starts with annual electricity use in kWh, then sets a target for annual solar generation as a percentage of that use. It divides the target generation by the visitor-entered annual production per DC kW to estimate system size. System sizing can be shown without a self-use share or tariff. To estimate annual dollar value, enter a modeled annual direct-use share and the marginal import rate; if the system is expected to export electricity, also enter the applicable export credit. Unknown export compensation is not silently assumed to be zero. These are annual scenario calculations, not an hourly dispatch or utility billing simulation.
Why a solar kWh may not equal a retail kWh
Electric bills can include fixed customer charges, demand charges, time-of-use rates, minimum bills, taxes and other items that a solar array may not eliminate. Electricity exported to the grid may be credited differently from electricity consumed inside the home. The exact result depends on the utility tariff, service territory, system size, interconnection rules and when electricity is produced and consumed.
Inputs that matter most
- 12 months of actual electricity usage in kWh, rather than bill dollars alone.
- The current utility tariff, including time-of-use periods and export compensation.
- Location-specific modeled production using roof orientation, tilt, shading and system losses.
- Installed price, financing fees, equipment warranties, maintenance and any battery costs.
- Current incentive eligibility and the homeowner's specific tax circumstances, verified independently.
Interpreting payback
The simple payback shown here is calculated only when the visitor supplies a complete energy-value model and an installed price. It divides the visitor-entered modeled installed price by the first-year modeled annual energy value. It is not a discounted cash-flow analysis and does not account for degradation, maintenance, inverter replacement, financing, taxes, future utility-rate changes, insurance or opportunity cost. A lender payment can also be higher than modeled savings, especially when financing fees or escalators are present.
What to do before making a decision
Compare the calculator with a proposal that includes an annual production estimate, equipment specifications, shade analysis, utility bill model, export-rate assumptions, total cash price and all financing terms. Confirm the utility's current rules and ask how the system performs under your actual rate plan.