Translate a proposal into model inputs
System size is the proposed DC capacity in kilowatts. Installed cost per watt is multiplied by 1,000 watts per kilowatt and system size to get project cost. The incentives field reduces that initial amount only when you enter a confirmed amount; it starts at zero because WattWise assumes no federal credit. First-year kWh per kW should come from a location-specific estimate. PVWatts can model a system using location, orientation and loss assumptions, but it is still an estimate rather than a production guarantee.
The model separates energy used in the home from energy exported. It multiplies the self-consumed share by your imported electricity rate and exported share by the export credit you enter. Annual production declines by the degradation assumption, while the imported rate changes by the escalation assumption. Each year's gross value is reduced by recurring operations and maintenance and by a one-time inverter expense in the year you specify. The table accumulates annual net values against the net upfront cost.
Example calculation using hypothetical inputs
Consider an illustrative 5 kW system at $3 per watt, with no incentive entered. Initial cost is 5 × 1,000 × $3 = $15,000. If a user enters 1,200 kWh per kW in year one, production is 6,000 kWh. With 70% self-use at 18¢/kWh and 30% exports credited at 5¢/kWh, gross annual value is 4,200 × $0.18 + 1,800 × $0.05 = $846. Subtracting a hypothetical $100 annual operating cost gives $746 in year one. That does not establish whether a real system pays back; later years follow the assumptions entered in the form.
How payback and the long table work
Simple payback is the point at which cumulative net value first offsets net initial cost. When the balance crosses zero between annual entries, the displayed year fraction linearly interpolates within that year's net contribution. This is a simple, undiscounted calculation. The 25-year net figure is all modeled annual net values less initial cost, so it can be negative. If the cumulative balance never reaches zero, the tool says payback is not within 25 years. With a zero production yield, annual energy value is zero and ongoing costs can make the cumulative position worse. A system size of zero kW is rejected because there would be nothing to pay back.
The break-even starting rate solves for the imported rate that makes the modeled 25-year cumulative balance reach zero, holding the other assumptions constant. It accounts for the assumed escalation and export credit. If no non-negative starting rate can produce payback under the entered production, costs and fixed export credit within the horizon, it reports that no modeled rate is feasible. This output is highly sensitive to assumptions and is not a forecast of future tariffs.
What the model leaves out
Actual project economics can include loan interest, lease or power-purchase terms, roof work, insurance, taxes, inverter warranties, outages, utility fixed charges, curtailment, changing export compensation, and the value of a home sale. The model does not discount future dollars for inflation or opportunity cost. Annual escalation is a user-selected scenario, not a prediction. Export shares and rates may vary by season or hour, and a utility tariff can change. Use the current tariff and ask the utility how credits are settled.
Do not treat the incentive field as a rebate finder. The IRS states that the Residential Clean Energy Credit applies to qualifying expenditures made through December 31, 2025 and is not available for expenditures after that date; verify current IRS instructions and any applicable carryforward details. State, local and utility programs vary; DSIRE is a directory, not a guarantee of eligibility. Common mistakes include entering AC production as if it were the same as a DC-specific estimate, mixing cents with dollars, overlooking export compensation, and assuming every produced kWh offsets a retail-priced purchase. Use the solar payback guide alongside a current proposal.