Solar System, how to calculate the Return on Investment (ROI).

For all those people concidering purchasing Solar Equipment in Costa Rica. How do you calculate the ROI?  The below numbers are using averages based on actual system designs that I have priced for clients and the solar packages priced in this example are with lithium battery backup.

In Costa Rica there are no government rebates, no tax exemptions or other factors to use in the formula. So that simplifies the formula some. We also will not calculate the rise in energy rates which consistently go up each year. Let’s leave those out for now.  For this calculation we will try to make the formula simple enough to get a good understanding of the method used to calculated the savings, and when your system is making you free energy.

We will use .26 cents US as an average cost per kwh. Remember kwh rates range widely across Costa Rica depending on the area where you live and the provider supplying the energy. Also this calculation will not use multiple rate charges based on the time of use with your consumption. We will also make a few other assumptions like the energy consumption in your home being a consistant number from month to month. In this example we will estimate the size of the solar system in a percentage of kwh’s of energy produced to cover the monthly bill. These assumptions have to be made to calculate the ROI. Below I will list the factors needed to make the calculations. In your calculation, just exchange my numbers with your own numbers to make the calculation. Review your ICE bill to get the monthly consumptions and the average them throughout the year.

Here are the factors when calculating the ROI. Let’s list them so we fully understand how to correctly calculate the ROI.

1. The energy consumption of the home in kwh per month, we will use 1200 kwhs per month.

2. The current energy providers cost of a kwh which we will use is .26 cents US.

3. How large of a system do you want to install, based on the kwh’s of production produced. In this example we will use 80% coverage as our target and this is a common target when designing a solar system.

4. The cost of the solar package equipment and installation. In this case we will estimate this package at a cost of $24,000 USD.

Let’s  multiple 1200 kwh per month of energy consumption by .26 cents as the cost per kwh. Which would be $312 USD of energy cost per month. Multiple that by twelve months and you get $3744 cost per year. With solar you will save $3744 @ 80% which is $2995.20 per year until the ROI is reached. Remember you will only be paying 20% of your old energy bill with your new solar package in place. Take the system upfront cost of $24,000 for the package and divide that by the savings of $2995.20 and you get 8.01 years for your ROI. Now it’s important to realize that in those 8 years during the ROI period, the electric energy rates will likely rise considerably. That initial .26 cents could easily be .35 cents per kwh after 5 years. Maybe even more. So the reality is that the ROI is actually less than 8 years, more accurately between 6-8 years when considering the raise of energy costs.   I hope this helps you to understand how to calculate the ROI and to see the benefits of purchasing a solar package. If you require additional information feel free to ask. If you are looking for a reliable, knowledgeable solar installer, then you have found me. You can contact me at my email address at or by cell or at what’s app at 506 6330-5137. You can also follow me at Sunny Side Solar Solutions facebook page to read my weekly articles on many different solar topics. These same topics can be read at my facebook group at Costa Rica Solar Installation Reviews along with other important information related to solar. I look forward to hearing from you.