Calculator Terms

Solar project size, cost, and electricity production

Annual kWh – the estimated amount of kilowatt-hours of electricity produced by the solar array each year.

Nearest city – (used to estimate the solar production)

Annual output degrade – the annual decrease in the solar production of the solar array, typically 0.5%

System size – the size of the solar array in kilowatts

Cost per Watt – the cost, including hardware and labor, to install the solar array per Watt of capacity

Total installed cost – self-evident, I hope

30% federal tax credit – the cash value of the 30% federal tax credit (available through 2016)

State tax credit – state tax credit, if applicable

Utility/State rebate – utility or state rebate, if applicable

Economic Assumptions

General price inflation – estimated inflation in prices, for estimating the long-term investment value

Discount rate – an economists calculation of the time value of money. Default of 8% suggests that you’d value 92¢ today as much as $1.00 next year

Real discount rate – discount rate minus inflation rate

Net metering rate per kWh – the price for solar energy produced, in dollars per kilowatt-hour. Typically the same rate as is paid for electricity from the utility.

Financing Terms

Interest rate – the interest rate on the loan

Down payment (financing terms) – the down payment on the loan

year term – the term, in years, of the loan

Note: some solar loans now include a maintenance-free contract, like a solar lease

Leasing Terms

Down payment (leasing terms) – the down payment on the lease

Lease price inflation – the annual increase in the lease payment

1st monthly payment – the initial monthly payment for the lease

Electricity. price inflation – the expected annual increase in electricity prices (historically 3%, but higher in many areas in the past 5-10 years)

15-year buyout price – the price, in dollars, for a leasing customer to buy the solar array after the lease expires (if available)