Calculate the net present value of a solar PV system investment over its lifetime using discounted cash flow analysis.
Input Parameters
Results
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Net Present Value
$
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PV of Benefits
$
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Benefit-Cost Ratio
--
Discounted Payback
years
Note: Positive NPV means the investment adds value. A benefit-cost ratio above 1.0 is favorable. The 2.5% annual benefit escalation accounts for rising electricity prices.
Reference
NPV = SUM[Benefit_t / (1+r)^t] - Net Cost
Benefit_t = Annual Benefit x (1+2.5%)^t
Net Cost = System Cost - Tax Credit
Benefit-Cost Ratio = PV(Benefits) / Net Cost
Discounted Payback = year when cumulative PV >= Net Cost