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Solar ROI

Sample Return on Investment:

CAsh vs. 50% loan financed

A SunPeak photovoltaic system is a wise investment. Each project will provide a unique return on investment (ROI) profile, but this exhibit illustrates a basic structure.

The three biggest drivers of a project’s ROI are:

  • Utility Electric Rate- The higher the existing cost of electricity, the higher the solar ROI.
  • Investment Tax Credit (ITC)- Federal tax credit of 30% of project cost.
  • MACRS depreciation- Accelerated cost recovery
  • Debt Financing / Leverage. Bank financing increases return on equity (cash-on-cash).

 

Primary Assumptions:

  • Federal Tax Credit (ITC) of 30% can be used in first year
  • $0.12 per kWh blended utility rate
  • Midwestern climate
  • 6% interest rate on debt financing
  • 10 year loan term
  • $2500 / kWdc system price

Solar ROI Cash vs finance

Any additional state or local incentives would enhance the ROI figures above.

Request a solar financial analysis for your facility

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