A tool designed to estimate the financial return on investment for photovoltaic systems typically considers factors like system size, electricity costs, incentives, and financing options to project net savings and payback periods. For example, such a tool might compare the lifetime cost of purchasing electricity from a utility company with the cost of generating electricity from a solar panel system, including installation, maintenance, and potential loan interest.
Estimating the financial viability of residential or commercial solar energy projects is crucial for informed decision-making. Historically, the declining cost of solar technology coupled with rising electricity prices and government incentives has made solar energy increasingly attractive. Accurately projecting the potential return allows individuals and businesses to assess the long-term value proposition and compare it with other investment opportunities.