How OpenSolar calculates financial savings

In a proposal you create in OpenSolar, there are quite a few sections where you see key financial figures and savings. This article goes over the inputs used to calculate financial figures and how you can learn more about correctly including each figure. 

The following video will walk you through the inputs of the calculations. 

Core areas affecting the financial impact of the system:

Your customer's energy usage patterns and utility bill

OpenSolar calculates your customer's utility bill based on:

• The customer's annual kWh consumption
• The customer's usage patterns
• The utility rate before and after solar

In Project > Energy you include your customer's annual energy consumption, determine usage patterns, and set the utility tariff.

• See a detailed explanation of how the utility bill is calculated here

Note: Pros sometimes experience issues with manually created utility rates. If a rate you'd like to use is not in our system, the best practice is to send the utility rate sheet to OpenSolar and our team will add this to the database. 

How a solar system is designed

The total annual generation of a solar system will directly affect the financial savings. The output is affected by:

• Equipment used and its specifications and efficiencies 
• Location of your project / solar system (slope, azimuth, etc)
• How an inverter is sized and whether there is stringing
• Whether a battery is included
• How the battery is set to charge and discharge
• Shading

OpenSolar's modeling accuracy has been verified in a third party assessment conducted by PVEL. 

Adjust these settings in Project > Design, where you build the design for your customer. 

Financial simulation settings

After we have calculated the electricity bill savings, we can calculate the financial impact of the system. We model the cash flow year by year over the lifetime of the system, which allows for the key financial metrics.

This step takes into account:

• Pricing of the system
• Incentives applied that markdown the price of the system
• Method of payment for the system (upfront cash payment, financing etc)
• Financial simulation settings (inflation of energy prices, years to simulate, etc)

Adjust the proposal to show financial impact

Admins on an account can edit the proposal template to include specific figures and charts in regards to the finances. 

By editing the proposal template, you can control which financial figures are highlighted at the top of the proposal. Options include: utility savings, payback, discounted payback, first year savings, net present value, and more. 

You can also include detailed tables such as "Bill Savings Table" and "Financial Benefits Detailed":

Bill Savings Table:

The bill savings table is calculated in the following way:

• Solar generation: The number displayed is coming from the annual output taking into account the weather information for the location. 
• Consumption: comes from the information entered in the energy tab.
• Utility before solar: calculated by taking into account the usage entered, the rate stated in the current tariff, and the utility charges.
  • • For example, for a consumption of 1042 with a rate of 0.115 and a charge of $10 per month, the system would calculate the amount by 1042 x 0.115 + $10
• Utility after solar: calculated taking into account the usage entered, the energy produced, the rate stated on the proposed tariff and the utility charges.
  • • For example, for a consumption of 1042 with a rate of 0.115 and a charge of $10 per month, the system would do (1042 - 507) x 0.115 + 10
• Estimated Savings: this is the difference between the utility before solar and the utility after solar.

Detail Financial Table

The detailed financial table is calculated in the following way:

• Electricity Consumption:  comes from the information entered in the energy tab.
• Solar Generation: This is the annual output of the system taking into account the weather information for the location. 
• Utility before solar: The amount shown here is the addition of all the months in the bill savings table for the utility before solar column.
• Utility after solar:  The amount shown here is the addition of all the months in the bill savings table for the utility after solar column.
• Annual Savings: The amount shown here is the addition of all the months in the bill savings table for the estimated savings column.
• System Costs: This is coming from the amount the system is priced at or the first year. Later is is the difference between the system price and the incentive.
• Upfront Incentives: This is the amount the customer will receive in incentives coming from the incentive tab of the design.
• Net Savings: Difference between Annual savings and system cost.
• Cumulative impact: This field carries over the net savings for the first year. From there is adds on the net savings from the following years.
  • • Example First year there is a net saving of -130. That is carried over. The following year net savings is 18 so the system adds -130 + 18 arriving at -112