How is solar payback calculated?

Simple payback = net upfront cost (after STC and other rebates) ÷ annual savings. Annual savings come from self-consumed generation valued at your grid import rate, plus exported generation valued at the feed-in tariff. The calculator also reports discounted payback, which accounts for the time value of money at your chosen discount rate.

What is the difference between NPV and IRR for a solar investment?

NPV (net present value) discounts every year of savings back to today’s dollars and subtracts the net upfront cost — a positive NPV means the system beats your discount rate. IRR (internal rate of return) is the discount rate at which NPV equals zero, so you can compare it directly against your cost of capital or alternative investments.

How does adding a battery change the return?

A battery raises self-consumption — storing midday surplus that would otherwise export at a low feed-in tariff and discharging it in the evening to offset grid import at a much higher rate. The Solar + Battery mode applies a higher self-consumption share, and the Battery Retrofit mode values each stored kWh at (round-trip efficiency × import rate − feed-in tariff).

How are rebates handled?

You enter the total installed price net of any rebates — deduct STCs (small-scale technology certificates) and any federal or state battery incentives such as Cheaper Home Batteries yourself before entering the figure. Because those schemes change frequently and vary by state, keeping them out of the model means the payback, NPV and IRR always reflect the real price you pay.

Should solar and battery ROI be on one calculator?

Yes — they share most inputs (usage, tariffs, feed-in rate, discount rate) and the most useful question is what a battery adds on top of solar. This tool keeps them together with a mode switch so you can evaluate solar alone, solar with a battery, or a battery retrofit to existing solar without re-entering data.

Does the calculator account for electricity price rises and panel degradation?

Yes — optional advanced assumptions let you escalate the electricity tariff each year (e.g. 2–5%/yr) and fade system output year-on-year (e.g. 0.5%/yr panel degradation). Leave both at 0% for a level, conservative baseline. Price escalation shortens the payback period while degradation slightly lengthens it; the cash-flow projection and break-even point update for whichever assumptions you set.

What is a good solar payback period in Australia?

For a well-sized rooftop system with a healthy self-consumption share, 4 to 7 years is typical in 2026. Anything under about 5 years is excellent, and under 7 years is still a strong return given panels last 25+ years. Payback is shortest where you use most of your generation yourself (high self-consumption), your import tariff is high and the installed price after STCs is competitive.

How do you calculate solar return on investment?

ROI = (lifetime savings − net installed cost) ÷ net installed cost, expressed as a percentage. The annual savings come from self-consumed generation valued at your import rate plus exported generation valued at the feed-in tariff. The ElecAS calculator reports ROI% alongside simple payback, discounted payback, NPV and IRR so you can judge the investment by whichever measure suits a household or commercial decision.

Is a home battery worth it in Australia in 2026?

It is closer than it has ever been. The federal Cheaper Home Batteries program lowers the upfront cost and rising import tariffs raise the value of each stored kilowatt-hour, but a battery still rarely pays back on energy arbitrage alone. The deciding number is the marginal value of each stored kWh — roughly (round-trip efficiency × import rate − feed-in tariff) — multiplied by the cycles the battery actually achieves. Use the Battery Retrofit or Solar + Battery mode to test it on your own tariffs.

Why is self-consumption more important than feed-in tariff?

Because grid import rates (around 25–45 c/kWh) are now several times higher than feed-in tariffs (around 3–8 c/kWh). Every kilowatt-hour you consume at the moment it is generated avoids buying grid power at the high import rate, whereas an exported kilowatt-hour only earns the low feed-in rate. Raising self-consumption — through usage timing or a battery — is the single biggest lever on solar payback, which is why the calculator weights savings by your self-consumption share.

Should I deduct the STC rebate before entering the system price?

Yes. Enter the installed price net of all rebates — deduct STCs and any battery incentive such as Cheaper Home Batteries yourself. Because rebate schemes change frequently and vary by state, keeping them out of the model means the payback, NPV and IRR always reflect the real out-of-pocket price and do not go stale when a scheme is updated.

What discount rate should I use for a solar NPV calculation?

Use a rate that reflects your alternative use of the money. For a household, 3–5% (roughly an offset account or term deposit) is reasonable; for a business, use your weighted average cost of capital, often 6–10%. A positive NPV at your chosen rate means the system beats that benchmark. IRR tells you the break-even discount rate so you can compare the project directly against other investments.

Does this solar ROI calculator work for New Zealand?

Yes. Auckland, Wellington and Christchurch are included with PVGIS-derived specific yields, and you can enter NZ buy-back rates and import tariffs directly. The payback, NPV, IRR and cash-flow methodology is identical — only the tariffs, rebates and specific yield differ by location.

ElecAS

Solar & Battery ROI Calculator

Why this page matters

Estimate the return on investment of a solar PV system, a home battery, or both — payback period, NPV, IRR, total savings and ROI, with Australian feed-in tariff modelling and a cumulative cash-flow projection. This static content is published so the canonical route has meaningful crawlable HTML even before the interactive application hydrates.

Who this page is for

Electrical engineers, solar designers, energy consultants, installers and homeowners evaluating the financial return of solar PV and battery storage in Australia.

Relevant standards

AS/NZS 4777
AS/NZS 5139

What this tool helps with

Three modes — Solar Only, Solar + Battery, and Battery Retrofit — each with its own self-consumption and savings model.
Returns simple payback, discounted payback, NPV, IRR, total savings and ROI percentage from a configurable discount rate and analysis horizon.
Optional advanced projection escalates electricity tariffs and fades output year-on-year, with a cumulative cash-flow chart that marks the break-even point.
Models self-consumption at the import tariff and exports at the feed-in tariff, with battery retrofit shifting spare solar from export into evening self-consumption.
Export a branded PDF report with project details, ROI summary, cost breakdown, energy assumptions and a year-by-year cash-flow table.

How to calculate solar and battery ROI for an Australian installation

Choose the mode — Pick Solar Only, Solar + Battery or Battery Retrofit. Solar Only and Solar + Battery model a new system; Battery Retrofit values a battery added to existing solar by storing spare exported energy.
Set system size and location — Enter the solar size in kW and select your city. The location preset applies a realistic specific yield (kWh per kW per year) — Sydney ~1420, Melbourne ~1310, Brisbane and Adelaide ~1530, Perth and Darwin ~1600 — or choose Custom to enter your own yield.
Enter the installed price net of rebates — Enter the total installed cost after deducting STCs and any battery rebate such as Cheaper Home Batteries, so every result reflects the real price you pay.
Set your tariffs and usage — Enter your grid import rate (c/kWh), feed-in tariff (c/kWh) and daily usage (kWh). For battery modes, set usable battery capacity, round-trip efficiency and effective cycles per year.
Set the self-consumption share — Enter the percentage of generation you use directly. A higher self-consumption share — and a battery — shifts energy from low-value export to high-value self-use and shortens payback.
Choose the discount rate and horizon — Pick a discount rate (e.g. 5%) and an analysis horizon (5–30 years). Optionally set price escalation and output degradation under advanced assumptions for a rising-cost scenario.
Review the metrics and export the report — Read the simple and discounted payback, NPV, IRR, lifetime savings and ROI%, check the break-even point on the cumulative cash-flow chart, and export the branded PDF for the proposal or record.

Solar & battery ROI in Australia — payback, NPV and IRR explained

Is solar worth it in Australia in 2026?

For most Australian homes and businesses a well-sized rooftop solar system still pays for itself in roughly 4 to 7 years and then delivers free electricity for the remaining 18–20+ years of its life. The return depends on three things you control and one you do not: the installed price (after STC rebates), how much of the generation you use yourself versus export, your grid import tariff and feed-in tariff, and how much sun your roof actually receives. The ElecAS Solar & Battery ROI calculator turns those inputs into the four numbers that actually decide the case — payback period, net present value (NPV), internal rate of return (IRR) and lifetime savings — instead of a single optimistic headline figure.

The economics have shifted: feed-in tariffs have fallen to roughly 3–8 c/kWh in most states while grid import rates sit around 25–45 c/kWh. That gap is why self-consumption — using your own solar at the moment it is generated — is now far more valuable than exporting it, and why a correctly modelled self-consumption share matters more to your payback than the system size alone.

How the three modes model the return

Solar Only estimates annual generation as system size (kW) × specific yield (kWh per kW per year for your location), splits it into self-consumed energy valued at your import rate and exported energy valued at the feed-in tariff, and nets the result against the installed price. The location preset sets a realistic specific yield — for example about 1420 kWh/kW/yr in Sydney, 1310 in Melbourne, 1530 in Brisbane and Adelaide, and 1600 in Perth and Darwin — so the generation figure reflects real Australian and New Zealand sun rather than a nameplate ideal.

Solar + Battery applies a higher self-consumption share because the battery stores midday surplus that would otherwise export cheaply and discharges it in the evening to displace expensive grid import. Battery Retrofit values each stored kilowatt-hour at (round-trip efficiency × import rate − feed-in tariff) — the true marginal benefit of shifting a unit of spare solar from export to evening use — and caps it at the spare solar actually available to store. If the feed-in tariff is high relative to the import rate, the tool flags that storing energy may save little.

Payback, NPV and IRR — which number should you trust?

Simple payback (net cost ÷ annual savings) is the most intuitive figure and the one most quoted, but it ignores the time value of money and everything that happens after break-even. NPV discounts every year of savings back to today at your chosen discount rate and subtracts the upfront cost — a positive NPV means the system beats that hurdle rate, and it captures the full system life, not just the years up to payback. IRR is the discount rate at which NPV equals zero, so you can compare it directly against a term deposit, an offset account or your cost of capital.

For a household decision, payback period and lifetime savings are usually the clearest lens. For a commercial or investment decision, NPV and IRR are the defensible metrics. The ElecAS calculator reports all of them from one set of inputs, plus a cumulative cash-flow chart that marks the exact break-even point, so you can present whichever framing your audience expects.

Is a home battery worth it yet?

A battery rarely pays for itself on arbitrage alone at today’s prices, but the gap has narrowed sharply with the federal Cheaper Home Batteries program cutting upfront cost and rising import tariffs increasing the value of each stored kilowatt-hour. The honest test is the marginal one: every kWh you cycle through the battery is worth roughly your import rate minus your feed-in tariff, less round-trip losses (typically 5–15%). Multiply that by realistic daily throughput and the cycles the battery actually achieves — not its nameplate capacity — and compare the lifetime total against the installed price.

Run the Battery Retrofit mode to value a battery added to an existing solar array, or Solar + Battery to model both together. Because the calculator separates the battery’s contribution, you can see exactly what the battery adds on top of solar rather than crediting it with savings the panels would have delivered anyway.

Rebates, escalation and degradation

Enter the installed price net of rebates: deduct small-scale technology certificates (STCs) and any federal or state battery incentive such as Cheaper Home Batteries before entering the figure. Keeping rebates out of the model means the payback, NPV and IRR always reflect the real price you pay, and the result does not silently go stale when a scheme changes. The optional advanced assumptions let you escalate the electricity tariff each year (electricity prices have historically risen faster than CPI) and fade output year-on-year for panel and battery degradation, so you can stress-test a level baseline against a more realistic rising-cost scenario.

The output is an indicative engineering estimate, not a quote or financial advice. It is most accurate when you use your own retailer tariffs, a quoted installed price and a realistic self-consumption share for your usage pattern. Export the branded PDF report — project details, ROI summary, cost breakdown, energy assumptions and the year-by-year cash-flow table — for a client proposal or your own records.

Reviewed by

Wisam Tozah — Associate Electrical Engineer. B.Eng (Electrical), MIEAust, CPEng, NER, NSW DBP, NSW PRE, APEC, IntPE(Aus). LinkedIn.

Frequently asked questions

How is solar payback calculated?: Simple payback = net upfront cost (after STC and other rebates) ÷ annual savings. Annual savings come from self-consumed generation valued at your grid import rate, plus exported generation valued at the feed-in tariff. The calculator also reports discounted payback, which accounts for the time value of money at your chosen discount rate.
What is the difference between NPV and IRR for a solar investment?: NPV (net present value) discounts every year of savings back to today’s dollars and subtracts the net upfront cost — a positive NPV means the system beats your discount rate. IRR (internal rate of return) is the discount rate at which NPV equals zero, so you can compare it directly against your cost of capital or alternative investments.
How does adding a battery change the return?: A battery raises self-consumption — storing midday surplus that would otherwise export at a low feed-in tariff and discharging it in the evening to offset grid import at a much higher rate. The Solar + Battery mode applies a higher self-consumption share, and the Battery Retrofit mode values each stored kWh at (round-trip efficiency × import rate − feed-in tariff).
How are rebates handled?: You enter the total installed price net of any rebates — deduct STCs (small-scale technology certificates) and any federal or state battery incentives such as Cheaper Home Batteries yourself before entering the figure. Because those schemes change frequently and vary by state, keeping them out of the model means the payback, NPV and IRR always reflect the real price you pay.
Should solar and battery ROI be on one calculator?: Yes — they share most inputs (usage, tariffs, feed-in rate, discount rate) and the most useful question is what a battery adds on top of solar. This tool keeps them together with a mode switch so you can evaluate solar alone, solar with a battery, or a battery retrofit to existing solar without re-entering data.
Does the calculator account for electricity price rises and panel degradation?: Yes — optional advanced assumptions let you escalate the electricity tariff each year (e.g. 2–5%/yr) and fade system output year-on-year (e.g. 0.5%/yr panel degradation). Leave both at 0% for a level, conservative baseline. Price escalation shortens the payback period while degradation slightly lengthens it; the cash-flow projection and break-even point update for whichever assumptions you set.
What is a good solar payback period in Australia?: For a well-sized rooftop system with a healthy self-consumption share, 4 to 7 years is typical in 2026. Anything under about 5 years is excellent, and under 7 years is still a strong return given panels last 25+ years. Payback is shortest where you use most of your generation yourself (high self-consumption), your import tariff is high and the installed price after STCs is competitive.
How do you calculate solar return on investment?: ROI = (lifetime savings − net installed cost) ÷ net installed cost, expressed as a percentage. The annual savings come from self-consumed generation valued at your import rate plus exported generation valued at the feed-in tariff. The ElecAS calculator reports ROI% alongside simple payback, discounted payback, NPV and IRR so you can judge the investment by whichever measure suits a household or commercial decision.
Is a home battery worth it in Australia in 2026?: It is closer than it has ever been. The federal Cheaper Home Batteries program lowers the upfront cost and rising import tariffs raise the value of each stored kilowatt-hour, but a battery still rarely pays back on energy arbitrage alone. The deciding number is the marginal value of each stored kWh — roughly (round-trip efficiency × import rate − feed-in tariff) — multiplied by the cycles the battery actually achieves. Use the Battery Retrofit or Solar + Battery mode to test it on your own tariffs.
Why is self-consumption more important than feed-in tariff?: Because grid import rates (around 25–45 c/kWh) are now several times higher than feed-in tariffs (around 3–8 c/kWh). Every kilowatt-hour you consume at the moment it is generated avoids buying grid power at the high import rate, whereas an exported kilowatt-hour only earns the low feed-in rate. Raising self-consumption — through usage timing or a battery — is the single biggest lever on solar payback, which is why the calculator weights savings by your self-consumption share.
Should I deduct the STC rebate before entering the system price?: Yes. Enter the installed price net of all rebates — deduct STCs and any battery incentive such as Cheaper Home Batteries yourself. Because rebate schemes change frequently and vary by state, keeping them out of the model means the payback, NPV and IRR always reflect the real out-of-pocket price and do not go stale when a scheme is updated.
What discount rate should I use for a solar NPV calculation?: Use a rate that reflects your alternative use of the money. For a household, 3–5% (roughly an offset account or term deposit) is reasonable; for a business, use your weighted average cost of capital, often 6–10%. A positive NPV at your chosen rate means the system beats that benchmark. IRR tells you the break-even discount rate so you can compare the project directly against other investments.
Does this solar ROI calculator work for New Zealand?: Yes. Auckland, Wellington and Christchurch are included with PVGIS-derived specific yields, and you can enter NZ buy-back rates and import tariffs directly. The payback, NPV, IRR and cash-flow methodology is identical — only the tariffs, rebates and specific yield differ by location.