Calculate the internal rate of return (IRR) for a solar PV investment including incentives and electricity savings.
Input Parameters
Results
--
Internal Rate of Return
%
--
Net Investment
$
--
Total Net Profit
$
--
Simple ROI
%
Note: A good solar IRR is typically 8-15%. The 3% electricity escalation rate reflects historical utility rate increases. IRR above discount rate indicates a positive NPV investment.
Reference
IRR: rate r where NPV = SUM[CF_t / (1+r)^t] = 0
CF_t = (Savings - Costs) x (1+escalation)^t
Net Investment = System Cost - Incentives
Escalation rate assumed at 3%/yr for electricity