What the result includes
First-year energy value = production × self-use share × avoided import price + production × exported share × usable export credit. The annual net benefit subtracts your maintenance reserve. Fixed utility charges that remain after installation are excluded from savings.
Simple payback = cash installed price minus verified incentives, divided by first-year net benefit. If that benefit is zero or negative, there is no positive simple-payback result.
Try the default example
All defaults are illustrative assumptions. At 8,000 kWh, 40% direct use, a 25-cent import price and a 5-cent export credit, first-year energy value is $1,040. After a $100 maintenance reserve, the benefit is $940. An $18,000 purchase has a 19.1-year simple payback. Valuing all production at 25 cents would show $2,000 before maintenance, overstating annual energy value by $960.
The 25-year model
Production falls by an assumed 0.5% each year. Only the import price increases with your rate-growth input; export credits and maintenance remain flat. Your optional inverter reserve is deducted once in year 12. That amount and timing are scenario assumptions, not a prediction that every inverter fails then. First cost recovery is the first year cumulative benefits cover the upfront outlay; later repairs can push the balance below zero again.
The model excludes financing, discounting, taxes, insurance increases, roof work, resale value and batteries. A positive 25-year nominal total does not establish that solar beats another investment. Run zero rate growth and lower production as well as the installer's scenario.
Get the right inputs
Ask your installer for annual production and interval-based self-consumption. Use the tariff's variable import charges and usable export value; do not divide your entire bill, including fixed charges, by kWh. An annual average cannot reproduce time-of-use billing or credit caps.
See the worked solar quote audit, net metering vs net billing, and system size calculator.
Sources and model status
CPUC's tariff explanation documents why direct use and exports can have different values in its covered utility territories. The IRS credit page gives the placed-in-service cutoff. These sources establish the rules; the default prices, reserve and production are our hypothetical inputs. Sources checked October 21, 2026.
Correction, October 21, 2026: the earlier calculator valued all production at the retail rate. This version separates export credits and labels the annual assumptions explicitly.