Solar Payback and Net Metering Calculator
What solar actually saves you, worked separately for retail net metering, net billing and no export credit — because the tariff decides more than the sun.
The system
How you are paid for it
This decides more than the sun does. Check your utility's tariff rather than assuming.
Assumptions
Year by year
The cumulative column crossing the net cost is the payback point.
| Year | Production | Saving | Cumulative | Discounted |
|---|
The metering arrangement matters more than the sun
This is what most payback calculators get wrong, usually by assuming full retail net metering because it makes the arithmetic easiest. Under full retail net metering an exported kilowatt-hour is worth exactly one you did not buy, and self-consumption is irrelevant. Under net billing you buy at retail and sell at three to eight cents — so what fraction you use on site decides most of the value. The same 7 kW array pays back in about eight years under the first and fourteen under the second. California's move to NEM 3.0 cut export value roughly 75% overnight, and is why batteries went from optional to near-essential there.
- Simple payback is incomplete, not wrong. Two forces pull against each other: rising electricity prices shorten it, while the time value of money and panel degradation lengthen it. The discounted figure is shown alongside for that reason.
- Shifting loads into daylight is free. A timer on the water heater, the dishwasher at noon, charging a car during the day — all raise self-consumption at no cost. Under net billing that is worth real money. A battery raises it further and is not free.
- Levelised cost sidesteps the whole argument. It asks only whether you can make electricity more cheaply than you can buy it, which is the cleanest single test of whether a system is worth building.
- Inverter replacement is not in these figures. Expect one around year 12 to 15, typically a few thousand. Nor is roof work — if the roof needs replacing within ten years, do it before the array goes on rather than paying to remove and refit the panels.
- Rates and rules change, sometimes abruptly. A quote assuming today's export rate for twenty-five years is making an assumption worth asking about, because in several places it has already turned out to be wrong.
How to use
- Enter the system size, installed cost per watt and annual production.
- Pick your metering arrangement — this changes the answer more than anything else.
- Under net billing, set what fraction you consume on site.
- Compare simple payback against the discounted figure and the levelised cost.
Frequently asked questions
Why do payback figures vary so much between calculators?
Mostly because of the metering assumption. Under full retail net metering an exported kilowatt-hour is worth exactly one you did not buy, and most calculators assume that because it makes the arithmetic simple. Under net billing you buy at retail and sell at three to eight cents, so a large part of your production is worth a quarter of what you assumed. The same seven kilowatt array pays back in roughly eight years under the first arrangement and fourteen under the second.
What is the difference between net metering and net billing?
Net metering credits exports at the full retail rate, so the meter effectively runs backwards and it makes no difference whether you use your own production or send it out. Net billing credits exports at a much lower avoided-cost rate while you still buy at retail, so the fraction you consume on site suddenly decides most of the value. That single change is what made batteries near-essential in California after NEM 3.0 cut export credits by roughly 75 percent.
How do I raise my self-consumption?
Shift loads into daylight, which costs nothing. A timer on the electric water heater, running the dishwasher and washing machine at midday, and charging an electric car during the day rather than overnight all move consumption under the production curve. Typical self-consumption without any effort is 30 to 40 percent; with deliberate load shifting it reaches 50 to 60, and with a battery 70 to 80. Under net billing that difference is worth real money every year.
Is simple payback the right number to look at?
It is incomplete rather than wrong. Two forces pull against each other: electricity prices rising at two to four percent a year shorten the payback, while the time value of money and panel degradation lengthen it. The discounted figure accounts for both and is usually a year or two longer. Quote both, and treat a system whose discounted payback exceeds its warranty period with suspicion.
What is levelised cost and why does it help?
It is the net cost of the system divided by the discounted energy it will produce, which gives a price per kilowatt-hour you can compare directly against your utility rate. Its advantage is that it sidesteps the metering argument entirely: it asks only whether you can make electricity more cheaply than you can buy it. If the levelised cost is well below your retail rate, the system is worth building and the tariff only decides how fast.
What costs are missing from this?
Two significant ones. Inverter replacement is not included and should be expected somewhere around year 12 to 15, typically a few thousand for a string inverter. Roof work is not included either, and it matters for sequencing rather than for cost — if the roof needs replacing within about ten years, doing it before the array goes on is far cheaper than paying to remove and refit the panels afterwards.
Will my export rate stay the same for 25 years?
Almost certainly not, and a quote that assumes it is making an assumption worth asking about explicitly. Several jurisdictions have cut export credits sharply with only months of notice. Many grandfather existing systems for a fixed period, often ten to twenty years, which is genuinely valuable and worth confirming in writing before signing. Run the numbers again at a lower export rate to see how much of the case depends on the tariff holding.
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