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4.56
Annual Electricity Production and Financial Value
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InputsYear
Tax/Insurance
Electricity Value
Cash Flow NPV
Cumulative Cashflow
Cumulative NPV
kWh Tons AbatedGrid % CleanComment
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Starting Cost $ 40,000 0($40,000)($40,000)
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Tax Credit $ - 1 $ 40.00 $ 1,445 $1,405 $1,310 ($38,595)($38,690) 16,425 Tax credit comes back in year 1.
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Initial Cost Outflow $ 40,000 2 $ 40.00 $ 1,480 $1,440 $1,253 ($37,155)($37,436) 16,343
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3 $ 40.00 $ 1,517 $1,477 $1,199 ($35,678)($36,237) 16,261
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System size12.5kW. This is the DC size of the system, tied to a 10kW inverter. Models suggest no clipping at this ratio in Indiana.4 $ 40.00 $ 1,555 $1,515 $1,147 ($34,163)($35,090) 16,179 9.820%
Skipping Carbon abatement first three years to pay back energy debt
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Assumed Capacity Factor15.0%This was 15% for IN (per PVWatts.nrel.gov, rounded down)5 $ 40.00 $ 1,593 $1,553 $1,097 ($32,609)($33,993) 16,097 9.225%
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Annual Hours87606 $ 40.00 $ 1,633 $1,593 $1,050 ($31,017)($32,943) 16,014 8.530%
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Initial Annual Output 16,425 kWh7 $ 40.00 $ 1,673 $1,633 $1,004 ($29,384)($31,939) 15,932 7.935%
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Electricity Variable Rate $ 0.088 12.6 for self consumption, 50% self consumption, 5.5 for exports8 $ 40.00 $ 1,714 $1,674 $960 ($27,709)($30,979) 15,850 7.240%
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Panel Degradation0.5%9 $ 40.00 $ 1,757 $1,717 $918 ($25,992)($30,061) 15,768 6.645%
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10 $ 40.00 $ 1,800 $1,760 $878 ($24,232)($29,183) 15,686 6.050%
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Property Tax Impact0Assessed value of solar panels is exempt from property taxes in Indiana11 $ 40.00 $ 1,844 $1,804 $840 ($22,428)($28,343) 15,604 5.355%
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Insurance Impact0.10%% of system value (rough guess)12 $ 40.00 $ 1,890 $1,850 $803 ($20,578)($27,540) 15,522 4.760%
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Inflation of electricity prices3.0%13 $ 40.00 $ 1,936 $1,896 $768 ($18,682)($26,772) 15,440 4.165%
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Cost of Capital7.2%
This is my assumed opportunity cost of investing elsewhere (9% less taxes). If you get financing, the interest rate on the loan could go here.
14 $ 40.00 $ 1,984 $1,944 $734 ($16,739)($26,038) 15,357 3.570%
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15 $ 40.00 $ 2,032 $1,992 $702 ($14,747)($25,336) 15,275 2.975%
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Financial Results16 $ 40.00 $ 2,082 $2,042 $671 ($12,705)($24,665) 15,193 2.380%
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Total NPV $ (17,852)17 $ 40.00 $ 2,133 $2,093 $642 ($10,612)($24,023) 15,111 1.785%
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Nominal cash flows $ 21,793 18 $ 40.00 $ 2,185 $2,145 $614 ($8,467)($23,409) 15,029 1.190%
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IRR2.7%19 $ 40.00 $ 2,238 $2,198 $587 ($6,269)($22,823) 14,947 0.695%
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Payback 21.28 Years20 $ 40.00 $ 2,292 $2,252 $561 ($4,017)($22,262) 14,865 0.0100%
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21 $ 40.00 $ 2,348 $2,308 $536 ($1,709)($21,726) 14,783 0.0100%
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Carbon Calculations22 $ 40.00 $ 2,405 $2,365 $512 $656 ($21,214) 14,700 0.0100%
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Grid Carbon intensity (kgs/kwh) 0.759 https://www.eia.gov/electricity/state/indiana/23 $ 40.00 $ 2,463 $2,423 $490 $3,080 ($20,724) 14,618 0.0100%
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Solar Energy Debt3years24 $ 40.00 $ 2,523 $2,483 $468 $5,563 ($20,256) 14,536 0.0100%
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Intensity Decline Rate5%assuming glide to clean grid in 20 years25 $ 40.00 $ 2,584 $2,544 $447 $8,107 ($19,808) 14,454 0.0100%
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26 $ 40.00 $ 2,647 $2,607 $428 $10,714 ($19,381) 14,372 0.0100%
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Tons abated81.427 $ 40.00 $ 2,710 $2,670 $409 $13,384 ($18,972) 14,290 0.0100%
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Social cost of carbon$51 Federal cost is $51, but recent study suggests $185 is more appropriate. https://www.rff.org/news/press-releases/social-cost-of-carbon-more-than-triple-the-current-federal-estimate-new-study-finds/28 $ 40.00 $ 2,776 $2,736 $390 $16,120 ($18,582) 14,208 0.0100%
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Social Value$4,153 Not including NOX, SOX, etc.29 $ 40.00 $ 2,842 $2,802 $373 $18,922 ($18,209) 14,126 0.0100%
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Abatement Cost $ 17,852 This is just the negative NPV of the system. Varies depending on cost of capital.30 $ 40.00 $ 2,911 $2,871 $357 $21,793 ($17,852) 14,043 0.0100%
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Abatement cost /ton $ 219.24 If this is negative, we're saving money AND carbon
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Abatement Cost inc. tax credit $ 17,852
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Abatement cost /ton inc tax credit
$ 219.24
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