Solar Lifetime Savings
This is the widest-lens view of solar's economics: a single lifetime NPV built from a degradation-adjusted average annual cost, rather than a flat year-one savings figure.
At your inputs, the system over its full expected lifetime has an NPV of -$3,259 over 10 years, with a discounted payback of no discounted payback within this horizon.
| Net cost after confirmed incentives | $16,000 |
|---|---|
| Annual savings | $1,650 |
| Net present value | -$3,259 |
Breakeven: No discounted payback occurs within the selected horizon.
- This uses planning estimates you entered, not a contractor quote or guaranteed savings.
- Actual system lifespan and performance vary by manufacturer and conditions; treat the horizon as a planning estimate.
What this also tells you: A positive NPV means the option is worth more than its cost even after discounting future savings back to today; a negative NPV means the upfront cost outweighs what the savings are worth today.
This is a planning estimate based on your entries. It does not size equipment, determine electrical or building-code compliance, verify incentive eligibility, or replace a contractor quote or professional energy audit.
Why this decision comes up
A homeowner wants a single bottom-line number for solar's full lifetime value, not a year-by-year breakdown, and this tool is built to answer exactly that.
How this is calculated
Net cost is compared against your entered degradation-adjusted average annual savings, discounted over your ownership horizon, to produce a single lifetime NPV and, if it occurs, a discounted payback year.
A worked example
With the defaults ($16,000 net cost, $0 confirmed incentive, $2,400/year baseline cost, $750/year degradation-adjusted average cost with solar, 10-year horizon, 5% discount rate), the system's lifetime NPV comes out negative at about $3,259 within this shorter 10-year horizon, though a longer ownership horizon would give the degradation-adjusted savings more years to accumulate.
Common mistakes
A common mistake is running this tool with a short horizon and concluding solar doesn't pay off, when a longer, more realistic ownership horizon can tell a different story.
Limitations
This uses a single pre-blended average annual savings figure rather than modeling degradation, incentives, or export credit individually. See those dedicated tools for a more granular view.
Common questions
What is a degradation-adjusted average annual cost?
It is a single blended annual cost figure meant to represent the system's average performance across its life, already accounting for panels producing somewhat less in later years than in year one.
How is this different from the degradation impact tool?
That tool models degradation year by year explicitly. This one uses a single pre-blended average annual figure for a faster, simpler lifetime view. Use the degradation tool for a more granular breakdown.
Should I trust the system's full stated lifespan?
Treat it as a planning estimate. Actual system lifespan and performance vary by manufacturer, installation quality, and local conditions.
How do I get a degradation-adjusted average figure if I don't already have one?
Average your expected year-one and expected final-year savings, or use the degradation impact tool's year-by-year output to compute a more precise average yourself.
Does this include financing cost?
No, this compares against a net cost figure. If financing, reflect that in your net cost or annual cost inputs, or use the cash vs. loan tool for that specific comparison first.