This spreadsheet model is mainly developed as a simple tool to assist potential solar PV customers in the state of Arkansas.

Input cells such as PV system cost, utility emergy price, PV module degradation rate, etc. can be entered in order to calculate o
It assumes a net metering policy similar to the State of Arkansas (as of 2020).
Sophisticated tools, such as a SAM model (https://sam.nrel.gov/), are available to conduct more accurate financial analysis.
The calculator does not include the cost of capital, meaning no interest to be paid for the initial cost of the PV system.
Certain costs, such as the Operation & Maintenance, are built in formulas based on research from the past decade, and could
The calculator does not include depreciation method, which is an income tax deduction that allows business owners to recove
ers in the state of Arkansas.
entered in order to calculate outputs including internal rate of return, net present values, etc., and display a cash flow diagram

accurate financial analysis.

cost of the PV system.
m the past decade, and could change over time.
ows business owners to recover the cost or other basis of the PV system.
cash flow diagram
 University of Arkansas Division of Agriculture
PV SYSTEM INPUTS
PV System Cost ($/Watt) and Size(kW)
PV System Costs in $/Watt $ 1.55 /Watt - Enter the PV system cost/Watt (used to calculate PV
- Enter the desired PV system size (used to calculate: 1
PV System Size 180 kW DC
PV system size: PV system should be designed to gener
PV System Location Arkansas
Array Type Fixed PV System Location.
Ground-mounted PV arrays typically tilt around 25 deg
Array Tilt 25 degrees of 180 degrees indicates that it is facing south direction
Array Azimuth 180 degrees PV system Lifetime and PV Module Degradation Rate, b
PV System Lifetime 25 years
PV Module Degradation Rate 0.30% per year
Size(kW)
att (used to calculate PV SystemCosts in #5 tab
size (used to calculate: 1 PV system costs; 2. annual energy production in PVWattsData)

uld be designed to generate roughly 85 to 100% of customer's annual electricity usage (kWh/year)

pically tilt around 25 degree in our location, an angle close to the latitude in this region. Array azimuth
t is facing south direction.

odule Degradation Rate, based on Jordan et al., 2016 (see Tab "References").
 PV Production Data
Enter State: Arkansas For simplicity, an annual production of 1450 kWh/kW is a good
angled at 25 degrees due south in any location within the state
Year (Rule-of-thumb) 1450 kWh/kWp
For locations other than the state of Arkansas, data from PVWa
First year production value 26,100

PV System Specifications
DC Rating: 180 kW
DC to AC Derate Factor: 1.2
AC Rating: 150 kW
Array Type: Fixed
Array Tilt: 25 degrees
Array Azimuth: 180 degrees

Energy Value
Cost of Electricity 0.1 $/kWh
 450 kWh/kW is a good estimate for a fixed-tilt PV solar system
ocation within the state of Arkansas.

ansas, data from PVWatts can be enter into B5 of the spreadsheet.

 Utility Rate Inputs

Utility Retail Rate 0.1 $/kWh Retail rates: retail rates for commercial businnes in Arkan
0.11 per kWh. The ratail rates are calculated by dividing
Net Metering Rate? Y "Monthly electricity use, kWh/mo." on your monthly ele

Net Meter Excess Generation Rate 0.1 $/kWh Net meter excess generation rate equals the retail rate b
policy. In some states, this rate can be lower than the ret
Utility Rate Inflation Percentage 2% per year rates to solar customers).

Utility rate inflation is estimated as 2% per year.

mercial businnes in Arkansas are mostly between $0.07 to
e calculated by dividing the "Net amount due, $" with the
o." on your monthly electricity bill.

e equals the retail rate based on the existing AR net metering

an be lower than the retail rates (some states pay whole sale

as 2% per year.
TAX RATE AND DISCOUNT RATE INPPUTS
Federal Investment Tax Credit Rate 26% (ITC) Federal Investment Tax Credit Rate for installing PV systems

State Tax Credit Rate
Federal Income Tax Rate
State Income Tax Rate
Federal and state income tax rates for calculating pre-tax ben
savings from the PV system
25%
Discount rate for calculating net present values (NPV) of futur
5.9%

Discount Rate (for NPV calculation) 5%

r installing PV systems

calculating pre-tax benefits of energy

ent values (NPV) of future cash flows

 PV SYSTEM COSTS
Initial Cost of PV System -279000 Calculates the Initial Cost of the PV Sys
• Equals $/Watt x (1,000 W/kW x PV sy
REAP Grants * $0.00 N
Rabates $0.00 REAP grant is a competitive USDA prog
energy projects. If your project is awar
PV System Cost after Grants -$279,000.00
Calculates Net Cost of the PV system a
Federal Tax Credit $72,540.00 tax credits,
State Tax Credit $0.00
Cash Down Payment 0
Net Cost of PV System -$206,460.00 -$1,032

* Rural Energy for America Program (REAP)

itial Cost of the PV System:
x (1,000 W/kW x PV system size (kW))
ompetitive USDA program that fund qualified renewable
If your project is awarded the grant, enter "Y" in Cell C3.
ost of the PV system after grants, rebates, federal and state
CASH FLOW INPUTS AND CALCULATIONS:
Year 1 2 3 4 5 6
Total PV System Cost -279,000 O&M costs vary a lot, but include an inverter replacem
"equipment costs", based on an estimate in a SunShot
Grants 0.00 Depreciation is an income tax deduction that allows a
recovery period of five years under the Modified Accel
Rebates 0.00 The capital investment and tax situations are different
Federal Tax Credit 72,540.00 options. This simplified and conservative calculation d

State Tax Credit 0.00

Net Cost of PV System -206,460
O & M Costs -1350 -1377 -1405 -1433 -1461
Equipment Costs
Utility Bill Savings (Pre Tax) $26,100 $26,992 $27,449 $27,914 $28,387
Cash Payment 0
Total Returns / Cash Flow -206,460 $24,750 $25,615 $26,044 $26,481 $26,926
Cumulative Returns / Cash Flow -206,460 -$181,710 -$156,095 -$130,051 -$103,569 -$76,644
Year 1 2 3 4 5 6

Annual Production, kWh 261,000 259,436 258,658 257,882 257,108

Lifetime production, kWh 6,277,311
Lifetime energy savings, $ 627,731 Enter incentives, other credits, O&M, and equipment costs
Life time O&M costs (43,241) the model.
Cash outflow (305,501)
Cumulative return every year is calculated in Row 15. The c
LCOE, $/kWh 0.049 negative (red) for four years, before change to positive at ye
the cost of the initial investment. Note that this result is bas
costs) as a rural business owner.
Annual Production (Cells C19 to AA19) is the multiplication
lose production each year due to "PV Module Degradation Ra
Lifetime electricity production and lifetime savings are calculated
 7 8 9 10 11 12 13 14 15 16
lude an inverter replacement at 15 years, general maintenance, insurance, property taxes, legal and administrative fees, etc. In this tab, the
an estimate in a SunShot Vision Study (DOE, 2012, see Tab "References"). The other O&M are calculated based on Table 4-1 of the same re
x deduction that allows a taxpayer (as a business owner) to recover the cost or other basis of certain tangible property. Qualifying solar ene
under the Modified Accelerated Cost Recovery System (MACRS) (see SEIA website in Tab "References").
ax situations are different for different business owners. Make sure to discuss your project with a qualified tax professional to identify pote
conservative calculation does not include depreciation.

-1491 -1520 -1551 -1582 -1613 -1646 -1679 -1712 -1746 -1781
-55,800
$28,868 $29,357 $29,854 $30,360 $30,874 $31,397 $31,929 $32,470 $33,020 $33,579

$27,377 $27,836 $28,303 $28,778 $29,261 $29,751 $30,250 $30,758 ### $31,798
-$49,267 -$21,430 $6,873 $35,651 $64,912 $94,663 ### ### ### ###
7 8 9 10 11 12 13 14 15 16

256,337 255,568 254,801 254,037 253,275 252,515 ### ### ### ###

M, and equipment costs (CellJ11, a expense of a replacement inverter at year 10) that occur over time in the Cash Flow section of

ulated in Row 15. The cashflow at the beginning of the project (Year 0) was the Net Cost of the PV system. The values remain
change to positive at year 5. This indicates that the PV system will generate enough energy savings in the first 5 years to recove
ote that this result is based on the assumption that the customer is successful in the REAP grant application (25% of the project

19) is the multiplication of the SystemSize and the AnnualYield (Cell G17) in Tab "PVWattsDataInput". The system is predicted to
V Module Degradation Rate" (Cell B12 in "SystemData").
time savings are calculated in Cell B20 and B21.
 17 18 19 20 21 22 23 24 25 26
nistrative fees, etc. In this tab, the inverter replacement is under the
based on Table 4-1 of the same report (DOE, 2012).
ble property. Qualifying solar energy equipment is eligible for a cost

tax professional to identify potential alternative depreciation

-1817 -1853 -1890 -1928 -1967 -2006 -2046 -2087 -2129 -2171

$34,148 $34,727 $35,315 $35,913 $36,521 $37,140 $37,769 $38,409 $39,060 $39,721

$32,331 $32,873 $33,424 $33,985 $34,555 $35,134 $35,723 $36,322 $36,931 $37,550
$195,274 $228,147 $261,572 $295,556 $330,111 $365,245 $400,968 $437,290 $474,221 $511,771
17 18 19 20 21 22 23 24 25 26

248,750 248,004 247,260 246,518 245,778 245,041 244,306 243,573 242,842 242,114

me in the Cash Flow section of

V system. The values remain

gs in the first 5 years to recover
application (25% of the project

ut". The system is predicted to

 PV System Cumulative Cash Flow Cumulative Cash Flow chart
$500,000 Plotted of the Row of cumu
16) as x-axis of the "CashFlo
$400,000 The value of the first year's
production offsets consump
$300,000 onset of the system service.
Cash Flow ($)

$200,000
$100,000
$0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
-$100,000
-$200,000
-$300,000
Years
Cumulative Cash Flow chart
Plotted of the Row of cumulative returns/cash flow (Row 15 of the "CashFlow" tab) as y-axis, and year (Row
16) as x-axis of the "CashFlow" Tab.
The value of the first year's cash flow reflects the net cost of the project. As annual on-site electricity
production offsets consumption from the utility, the cashflow becomes positive several years after the
onset of the system service. From that point on, cash flow maintain positive.
PV System Financial Results
Simple Payback 8 Years
Net Present Value (NPV) $175,020
Internal Rate of Return (IRR) 12%
# of Yr to Cost Recover 11 This cell value is a look up (static) of Row 15 of Tab "CashFlow",
c) of Row 15 of Tab "CashFlow", when Cumulative return changes from negative to positive, or whenever the bar flips from negative to po
e bar flips from negative to positive on the CashFlowChart.
References used in the calculator:

PVWatt Calculator. https://pvwatts.nrel.gov/

Jordan, D.C. et al., Compendium of photovoltaic degradation rates. Progress in Photovoltaics: Res Appl. 24:978-989 (htt

Depreciation of Solar Energy Property in MACRS. https://www.seia.org/initiatives/depreciation-solar-energy-property-

US Department of Energy,2012. SunShot vision study: Feb. 2012. NREL Report No. BK5200-47927 (https://www.energy
oltaics: Res Appl. 24:978-989 (https://onlinelibrary.wiley.com/doi/epdf/10.1002/pip.2744)

eciation-solar-energy-property-macrs

200-47927 (https://www.energy.gov/sites/prod/files/2014/01/f7/47927.pdf).