Solar Tools

Commercial Solar ROI Calculator

Estimate the net cost, simple payback, 25-year net present value, and internal rate of return of a commercial solar system from your own numbers. Defaults reflect a mid-size Massachusetts rooftop system and can be changed for any of the eight states we serve.

Last reviewed: September 2026. Screening estimate only, not a proposal, tax advice, or a guarantee of results.

Gross installed cost.

Section 48E credit.

Year 1 depreciation benefit.

Net cost after tax benefits.

Year 1 production.

Year 1 savings and incentive.

Simple payback.

25-year NPV.

Unlevered IRR.

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Method

How the calculator works

The model builds a 25-year cash flow. Year 1 production equals system size times specific yield, and output declines 0.5 percent per year. Energy consumed on site is valued at your retail rate, exported energy at the export credit, and both escalate at the rate you enter. The SMART incentive, where applicable, is paid on all production for 20 years. O&M escalates 2.5 percent per year.

Tax benefits are taken in year 1: the Section 48E credit on the gross cost, plus 100 percent bonus depreciation on a basis reduced by half of the credit, multiplied by your tax rate. Simple payback compares net cost to annual savings. NPV discounts every cash flow at your discount rate, and IRR is the rate at which that NPV equals zero.

What it leaves out. Demand charge savings, battery storage, financing structure, inverter replacement, roof work, and utility upgrade costs. These often decide a real project, which is why an engineered proposal starts from 12 months of interval data. See commercial solar cost in Massachusetts, commercial solar payback, and the Section 48E rules for 2026.

Questions

Frequently asked questions

How accurate is this commercial solar ROI calculator?

It is a first-pass screening model. It uses your inputs for size, cost, production, rates, and tax treatment, and applies standard assumptions for degradation and escalation. A bankable number requires 12 months of interval data, a site assessment, a utility interconnection review, and your tax advisor's confirmation of credit and depreciation treatment.

Which federal tax credit rate should I use?

Under Section 48E the base rate is 6 percent, and 30 percent applies to systems under 1 MW AC or to larger systems that meet prevailing wage and apprenticeship requirements. Solar that began construction after July 4, 2026 must be placed in service by December 31, 2027. Confirm eligibility with your tax advisor.

How is depreciation modeled?

The calculator applies 100 percent bonus depreciation in year one on a basis reduced by half of the tax credit, multiplied by the tax rate you enter. Set the tax rate to zero if the owner has no taxable income to use it.

What should I enter for the SMART incentive outside Massachusetts?

Enter zero. SMART 3.0 is a Massachusetts program. Other states have their own mechanisms, such as NRES in Connecticut or Renewable Energy Growth in Rhode Island, which our engineers model separately.

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