Key Metrics
Important metrics include Simple Payback Period, Internal Rate of Return (IRR), Net Present Value (NPV), and Levelized Cost of Energy (LCOE). Most commercial projects target 15-25% IRR.
Calculating Costs
Include equipment, installation, permitting, interconnection, and financing costs. Subtract federal ITC (30%), depreciation benefits, and state/local incentives for net investment.
Projecting Savings
Calculate annual production considering degradation (0.5% yearly). Apply utility rate escalation (3-5% annually). Include demand charge savings and additional revenue streams.
Financial Analysis
Create 25-year cash flow model. Calculate payback when cumulative savings equal investment. IRR is discount rate where NPV equals zero. Include tax implications and opportunity cost.
Calculate Your Savings
See how much you could save with our free solar calculator
Written by
Promise Energy Team