By / 2022-09-21


NPV Calculator Formula

The Solar NPV calculator is based on the formula:

Formula for the net present value (NPV) of a solar energy system. NPV = -C_Ins -C_Rep over ( 1 + i ) ^ 15 + sum from{t = 0} to{p -1} G_1 times(( P_S X S) + (P_E times (1 - S)))X (1 + i_e)^t X( 1 - d )^t / ( 1 - i )^t

Where:

NPV = Net Present Value
CIns = Installation Cost
CRep = Cost to replace the inverter at year 15
i = Future value discount rate
p = lifespan of the solar panel system
G1 = Electricity price in year 1
PS = Price of electricity for self consumption
S = Self-consumption factor
PE = Price of electricity for export
ie = Electricity price inflation
d = Solar panel degradation (annual, compounded)

See solar NPV spreadsheets to learn more about solar panel NPV calculations.