Solar & battery
Solar Battery ROI Calculator
Works return on storage, where the value depends on what the battery is for.
Result
Simple payback, with no discounting and no financing cost. For anything large or long, money now is worth more than money later and a lender will want interest, both of which make the real return lower than this.
Get a Free Business AuditHow the calculation works
The annual value the battery produces against its cost, where the value depends entirely on its purpose: arbitrage between tariff periods, avoiding poorly credited exports, demand charge reduction, or backup during outages. The first three are measurable and the last is insurance rather than return.
What moves the number
- Tariff spread between periods, where time of use applies.
- Export credit rate, which sets the value of self-consumption.
- Demand charges, where applicable.
- Cycle life against the cycling the use requires.
Where this one goes wrong
Backup value is not a financial return and should not be presented as one, because the benefit is avoiding the consequences of an outage rather than a saving that accumulates. Price it as insurance and let the customer judge it. The measurable cases depend on the tariff: a wide time of use spread or a poor export credit creates real arbitrage value, while a flat tariff with full retail export credit leaves a battery with very little economic case.
Before you quote
- Identify which purpose the battery serves before valuing it.
- Treat backup as insurance, not as return.
- Check cycle life against the cycling the use pattern requires.
Questions
About this calculator
Does a home battery pay for itself?
It depends on the tariff. A wide time of use spread or a poor export credit creates real arbitrage value; a flat tariff with full retail export credit leaves very little economic case. The tariff rather than the battery determines it.
How should backup value be presented?
As insurance rather than return, because the benefit is avoiding the consequences of an outage rather than a saving that accumulates. Presenting it as a financial return misrepresents it, and customers value it perfectly well on its own terms.
Does cycling affect the economics?
Yes. Daily cycling for arbitrage consumes cycle life far faster than occasional backup use, so the same battery lasts very different lengths of time depending on purpose. The cost per cycle, not the cost per kilowatt hour, is the comparison.
The formula
payback = cost / (monthly gain - monthly running cost)
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How to use this calculator
- Up-front cost ($). Enter your own figure; the page starts at $12,000.
- Extra gross profit per month ($). Enter your own figure; the page starts at $1,400.
- Extra running cost per month ($). Enter your own figure; the page starts at $220.
- Period to judge it over. Enter your own figure; the page starts at 36.
The result updates as you type, so you can try a figure, see what it does to payback period, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Up-front cost | $12,000 |
| Extra gross profit per month | $1,400 |
| Extra running cost per month | $220 |
| Period to judge it over | 36 |
What comes out
| Result | Value |
|---|---|
| Payback period main result | 10.2 |
| Net gain per month | $1,180 |
| Net return over the period | $30,480 |
| Return on investment | 254% |
It pays for itself in 10.2 months and returns $30,480 over 36 months, a 254% return.
How sensitive the answer is
Holding everything else steady and changing only up-front cost, this is what happens to payback period. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Up-front cost ($) | Payback period |
|---|---|
| $6,000 | 5.1 |
| $9,000 | 7.6 |
| $12,000 example above | 10.2 |
| $18,000 | 15.3 |
| $24,000 | 20.3 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Up-front cost ($)
- A money amount, starting at $12,000.
- Extra gross profit per month ($)
- A money amount, starting at $1,400.
- Extra running cost per month ($)
- A money amount, starting at $220.
- Period to judge it over
- A number, between 0 and 240, starting at 36.
What the results tell you
| Result | What it is |
|---|---|
| Payback period | The headline result. A decimal figure. |
| Net gain per month | A money figure. |
| Net return over the period | A money figure. |
| Return on investment | A percentage. |
A design still needs a site visit
Output and sizing figures use the assumptions you enter, not measured irradiance, shading or roof orientation at your address. Real production depends on all three, plus inverter behaviour and local interconnection rules.
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.