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Solar Savings
Published on 25 Apr 2022
Irrespective of which Payment Type is selected from the available options of Cash, Loan, Lease or PPA, estimated Solar Savings will remain the same and the solar savings calculations will be consistent across all Payment Types.
Net Savings calculations account for the effect of financial payments on system cost and as a result, the Estimated Net Savings will change based on which Payment Type has been selected.
Users can choose to display either the solar savings or net savings on their proposals. This can be done by simply toggling on/off the option titled ‘Show Net Savings in Monthly Breakdown Table’ under the Customization button in the webquote toolbar.
Solar Savings
Solargraf will show a toggle option under the web quote Customization settings to ‘Show Net Savings in Monthly Breakdown’.
When a loan is selected, under the Solar Payment column, the LOAN CAPITAL and LOAN INTEREST are now presented as a single item, LOAN PAYMENT.
- What's the difference between Solar Savings and Net Solar Savings?
Solar Savings refers to the savings generated as a result of PV system installation and include reductions in the total cost of energy due to reduction in monthly utility bills and net credits/FiT revenue from over production. Any yearly cost/discount is also netted from solar savings. Financing costs linked with different financing types are included while calculating Net Savings.
Net Solar Savings helps homeowners understand the net cost of a PV system installation, allowing for a complete picture of the savings associated with going solar using the quoted payment method.
Net Solar Savings helps homeowners understand the net cost of a PV system installation, allowing for a complete picture of the savings associated with going solar using the quoted payment method.
Solar Savings for Cash and Loan Options
- How are the Solar Savings calculated for a Cash Option?
The Solar Savings for a cash option are calculated as follows:
- Solar Savings = Old Utility Bill – New Utility Bill – New Solar Bill
Note: Monthly monetary credits or revenue generated from net metering and feed in tariff agreements, are also added to Solar Savings, wherever applicable.
where, New Solar Bill refers to any yearly annual adders (Extra Costs or Discounts). For example, the following Extra Cost item for $1000 / year for Maintenance would be displayed as follows:
where, New Solar Bill refers to any yearly annual adders (Extra Costs or Discounts). For example, the following Extra Cost item for $1000 / year for Maintenance would be displayed as follows:
The $1000 is split over 12 months and displayed as follows under the Solar Payment column:
- How are the Solar Savings calculated for a Loan Option?
The Solar Savings for a loan option is calculated as follows:
- Solar Savings = Old Utility Bill – New Utility Bill – New Solar Bill
Note: Monthly monetary credits or revenue generated from net metering and feed in tariff agreements, is also added to Solar Savings, where applicable.
The Solar Savings for both a Cash Option and Loan Option are the same. However, the Solar Payment column will also show a ‘Loan Payment’ that is not included in the calculations of Solar Savings.
The Solar Savings for both a Cash Option and Loan Option are the same. However, the Solar Payment column will also show a ‘Loan Payment’ that is not included in the calculations of Solar Savings.
For example, the Solar Payment column below shows two items:
However, only the Maintenance fee is deducted from Solar Savings as the New Solar Bill:
If the installer hovers over the orange tool tip next to Solar Savings, they will see a message describing the above:
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Net Solar Savings for Cash and Loan Options
- How are the Net Solar Savings calculated for a Cash Option?
The Net Solar Savings for a Loan Option are calculated as follows:
- Net Solar Savings = Old Utility Bill – New Utility Bill – New Solar Bill – Net system cost
Note: Monthly monetary credits or revenue generated from net metering and feed in tariff agreements, is also added to Solar Savings, where applicable.
The deduction of the upfront cost is not shown in the Monthly Breakdown, because it is assumed that the payment is made at month 0. The user is informed of this as shown below:
The deduction of the upfront cost is not shown in the Monthly Breakdown, because it is assumed that the payment is made at month 0. The user is informed of this as shown below:
- How are the Net Solar Savings calculated for a Loan Option?
The Net Solar Savings for a Loan Option are calculated as follows:
- Net Solar Savings = Old Utility Bill – New Utility Bill – Solar Payment
Note: Monthly monetary credits or revenue generated from net metering and feed in tariff agreements, is also added to Solar Savings, where applicable.
In the screenshot above, the Solar Payment includes both the annual extra costs and discounts as well as the monthly loan payment.
Other FAQ's
- How are the overall Estimated Solar Savings Over 20 Years (or project lifetime) calculated?
This total is the sum of all the numbers under the ‘Solar Savings’ column in the Monthly Breakdown section.
- How are the overall Net Savings calculated for a Cash Option?
The overall Net Savings for a Cash Option are calculated as follows:
Total Net savings = Total Solar savings – Net System cost (cost after rebates and incentives)
Total Net savings = Total Solar savings – Net System cost (cost after rebates and incentives)
- How are the overall Net Savings calculated for a Loan Option?
The overall Net Savings for a Loan Option are calculated as follows:
Total Net savings = Total Solar savings – Sum of all loan payments + any applicable incentive which are not pre-paid
Note: If incentives are to be pre-paid as part of loan agreement, then it means that incentive amount has already been considered in loan payments (resulting in lower monthly payments), and therefore need not be added back.
Total Net savings = Total Solar savings – Sum of all loan payments + any applicable incentive which are not pre-paid
Note: If incentives are to be pre-paid as part of loan agreement, then it means that incentive amount has already been considered in loan payments (resulting in lower monthly payments), and therefore need not be added back.
- What’s the benefit of showing the net solar savings? What if the value is negative?
Net Savings helps homeowners understand the net cost of a PV system installation. Having a negative net savings means that the cost of the system outweighs the monetary benefits that the homeowner will get in the form of utility savings, Net FiT/Credits Revenue.
We understand that showing a negative savings value on a solar proposal is not always ideal, so we have provided an option to toggle off the Show Net Savings via the Customize button in the web quote .
We understand that showing a negative savings value on a solar proposal is not always ideal, so we have provided an option to toggle off the Show Net Savings via the Customize button in the web quote .
- Will the change to the Solar Savings be applied retroactively?
No. The changes outlined will not affect any existing projects. The monthly breakdown table of projects created before this update will remain as it is. Only the projects created after this change will be impacted.
- What is the default option for the ‘Show Net Savings in Monthly Breakdown’ toggle?
By default, the toggle for the Show Net Savings in Monthly Breakdown will be off in the company Settings, which means that the Solar Savings breakdown will be displayed by default. Users can choose to make a change in the company Settings page by selecting Quote Customization from the hamburger menu to change the company’s default configuration.
- Is the Utility Escalation factor accounted for in the Solar Savings value?
Yes, the utility escalation factor is accounted for when computing either the Solar Savings or Net Solar Savings for a project. This is because the utility escalation factor is used to compute the Average Utility Rate which is then used to calculate the final utility bill. The Utility bill, among other factors, is then used to calculated the final solar or net solar savings.
- Why was this feature implemented?
This feature was implemented to give installers flexibility in how they may want to represent the savings and benefits of going solar. With the Solar Savings approach, an installer can present the savings from a lessened utility bill, additional revenue from over-production, and the impact of yearly maintenance cost. Costs from financing, such as the impact of interest on a loan, are typically not included in this type of savings calculation. Because this approach does not incorporate any costs associated with how a homeowner will pay for their solar install, the language, calculation methodology, and numbers are more in-line with industry standards.
The Net Savings approach, on the other hand, allows for a more complete picture of the savings associated with going solar using the quoted payment method. By providing these options and the methodology in how both approaches are calculated, Solargraf now allows more flexibility in how installers can use the tool to make solar proposals to homeowners and close their sales.
The Net Savings approach, on the other hand, allows for a more complete picture of the savings associated with going solar using the quoted payment method. By providing these options and the methodology in how both approaches are calculated, Solargraf now allows more flexibility in how installers can use the tool to make solar proposals to homeowners and close their sales.