Solar payback calculator
Work out a rough check before talking to a solar vendor using your own figures. Check the assumptions before you act on the result.
Your figures
Result
- Solar payback years
- 5.53 years
How it is worked out
payback years = system cost ÷ (units generated per year x tariff saved per unit); units per kW per year is a user input [VERIFY for your location]
solar_payback_years = system_cost/(units_generated_year*tariff_saved_per_unit)
Check before you rely on it. Verify local generation, tariff and system loss assumptions with a vendor. Have an accountant or the right specialist check any figure that affects tax, a legal duty, safety or a large purchase.
What it works out
The solar payback calculator turns records from the business into a figure for this decision: a rough check before talking to a solar vendor. Use it when the responsible maintenance in-charge needs a consistent answer for this specific task. The answer uses only the values entered. Record the measurement period beside it.
What you need
| Input | Unit | Where to find it |
|---|---|---|
| System cost (example: ₹31,50,000) | ₹ | Take system cost from the latest cost sheet, supplier quote, agreement or invoice. |
| Units generated year (example: 76,000 kWh/year) | kWh/year | Take units generated year from the latest cost sheet, supplier quote, agreement or invoice. |
| Tariff saved per unit (example: 7.50 ₹/kWh) | ₹/kWh | Take tariff saved per unit from the latest cost sheet, supplier quote, agreement or invoice. |
Use the same item, period and measurement unit for related inputs. If a figure comes from an estimate rather than an actual record, mark it as estimated. Keep your original figures beside the result.
The formula
In plain words, calculate solar payback years using the measured inputs below. The expressions are shown without hidden rounding so they can be checked by hand.
- solar payback years:
solar_payback_years = system_cost/(units_generated_year*tariff_saved_per_unit).
Formula basis from the supplied taxonomy: payback years = system cost ÷ (units generated per year x tariff saved per unit); units per kW per year is a user input [VERIFY for your location]. Simple payback ignores financing, maintenance, replacement, tax treatment and electricity price changes.
A worked example
Illustrative example: a pharmaceutical packaging supplier uses the figures in the table above. These are example inputs, not industry averages. For this example, the main figures are system cost: ₹31,50,000, units generated year: 76,000 kWh/year, tariff saved per unit: 7.50 ₹/kWh.
- Solar payback years:
system_cost/(units_generated_year*tariff_saved_per_unit). With the example figures,3150000.0 / (76000.0 * 7.5)gives 5.53 years.
How to act: Use the result to check the machine or service log. Write down the input date and the assumption that could move most.
How to read the result
Example bands, change them for your business:
- Comfortable: Your result meets the target for this item or reporting period. Keep the calculation with its source records and check the machine or service log.
- Watch: The result is close to your action limit, or it changed since the previous calculation. Recheck system cost and units generated year using the original records.
- Act: The result breaks a limit already agreed by the manager or owner. Record the difference, name a responsible person, and agree a correction date. For an operational starting point, read [Machines break down](/problems/machines-break-down) and [Breakdown to recovery](/processes/breakdown-to-recovery). Do not use these example bands as published industry benchmarks.
Copy it into a spreadsheet
Create a sheet with column A for the label and column B for the number or formula. The expressions work in Excel or Google Sheets. Keep input cells editable and result cells protected from typing.
| Cell | Label | Value or formula |
|---|---|---|
| B2 | system cost | 3150000.000000 |
| B3 | units generated year | 76000.000000 |
| B4 | tariff saved per unit | 7.500000 |
| B6 | solar payback years | =(B2/(B3*B4)) |
For any formula containing a divisor, enter a value above zero. For any monetary output, format the cell in Indian rupees. Do not replace the cells with rounded figures until the final display.
What this calculator leaves out
- Estimated electricity loads, failure causes and downtime losses need a site check.
- A single average can hide unusual lots, customers or weeks. Review the underlying entries before making a large decision.
- The formula does not check whether the records are complete. Read the machine hour meter, repair log and utility bills from the same period. Split planned stops from faults.
Common mistakes
- Mixing periods. Using system cost from one month with units generated year from another produces a number that looks precise but is hard to act on.
- Trusting old figures. Recheck the relevant source record before reusing last month's saved inputs. Check the largest cost or longest breakdown first; an average can hide one critical failure.
- Treating an estimate as approval. Record which assumptions were entered by hand. Get the relevant owner, accountant or technician to check unusual values.
A number like this helps only if someone works it out again when things change.
Questions people ask
Where do I find the numbers for solar payback calculator?
Take system cost from the latest cost sheet, supplier quote, agreement or invoice. Take units generated year from the latest cost sheet, supplier quote, agreement or invoice. Keep all inputs from the same period.
Can I use this number to approve a purchase or payment?
Use it as a first check. Use the result to check the machine or service log. Write down the input date and the assumption that could move most. If the result affects tax, legal duties, workplace safety or a major investment, obtain the appropriate review.
When should I calculate it again?
Recalculate when a meaningful input changes, and at the next regular review of the relevant register. Save the date and the input values so changes can be explained.