Solar Cost and Savings Analysis

Understanding the Variables of Solar Economics

Calculating the true cost of solar and potential electric bill savings involves more than looking at the purchase price of the hardware. The long-term return on your investment depends on multiple dynamic variables that can change over time.

We help you evaluate these economic variables for education. We focus on teaching you how to model different utility rate pathways, equipment lifespans, and financing structures.

Factors That Influence Costs and Savings

• Current Utility Rates: Base baseline rates and seasonal peak hours (Time-of-Use tiers).
• Utility rate increases: Historic PG&E rate updates and prospective changes.
• Equipment Degradation: Panels lose efficiency over time (usually 0.5% to 0.8% annually), reducing production.
• System Shading: Tree growth or dirt build-up that blocks light and reduces output.
• Inverter Replacements: String inverters typically require replacement after 10-15 years, a cost often excluded from bids.
• Financing Charges: Interest rates, dealer origination fees (which can add 15-30% to upfront loan costs), and loan terms.
• Incentives and Rebates: Eligibility rules for federal tax credits or battery incentives.
• Ownership Duration: How long you plan to own the property before selling.
• Future Load Changes: Anticipated power needs like heating changes or new vehicle charging.