How is Lifetime Savings from a renewable energy system calculated?

To calculate life-time savings from a renewable energy system, we take the first-year utility savings and multiple it by the expected life of the system (assumed to be 25 years for PV, 15 years for wind or solar thermal). We also assume a annual increase in utility prices (see note, below. Our initial assumption is 3.78% utility inflation). You may change the assumed utility inflation rate.

The formula is as follows:

Life_Savings = sum((annual utility savings) * (1 + Utility_Inflation)^year), as "year" goes from 1-25 (1-15 for solar thermal or wind)

From this we calculate:

Average Annual Utility Savings = Life Savings / 25 years (15 years for solar thermal or wind)


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