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Profitability

How autarc calculates breakeven, total investment and internal rate of return in the simulation, and which settings affect them.

Written by Simon Heuschkel

Profitability shows whether and when the planned system pays off: how much you invest, how much you save year by year compared with today, and when the savings cover the investment.

autarc compares the energy costs of a scenario with those of Current over an analysis period of 20 years by default, which you can change in the Financial settings. There is therefore no profitability on the Current tab itself.

How it is calculated

  1. Yearly savings: For every year, autarc subtracts the costs of the scenario from the costs of Current – grid electricity, feed-in revenue and fossil fuels. How these costs arise is explained in Savings & bills.

  2. Price increase: From the second year on, electricity costs rise by the Yearly energy cost increase and gas or oil costs by the Yearly fossil cost increase.

  3. Recurring costs: Costs such as maintenance or insurance in the scenario reduce the savings; costs in Current increase them.

  4. Cumulative position: autarc starts at minus the Total investment and adds the savings year by year. The installation year already counts as the first year with savings.

As soon as the cumulative position turns positive, the investment is covered and shown in green.

The key figures

  • Breakeven: after how many years the investment is covered, with the calendar year in brackets. If it isn't covered within the analysis period, autarc keeps calculating with the same price increase for up to 50 years. If that isn't enough either, "-" is shown.

  • Total investment: the price of the planned system after subsidies. Below it you see the LCOE (Levelized Cost of Electricity) – the cost of the solar system's electricity, i.e. what one self-generated kilowatt-hour costs over the analysis period.

  • Internal rate of return (IRR): the yearly return on your investment – the interest rate at which the savings pay back the investment. This lets you compare the system directly with a loan rate or a savings account. In brackets you see the surplus at the end of the analysis period. If nothing is invested or the savings never cover the investment, "-" is shown.

If you compare a scenario with another one via Compare with:, each figure also shows the difference.

Chart and table

Next to the Profitability heading you switch between two views:

  • Bar: shows the cumulative position for every year of the analysis period. Negative bars mean the investment isn't covered yet.

  • Table: shows the same years with all values: Investment, Cashflow (with solar), Cashflow (without solar), Net savings, Cumulative, and the accumulated Energy cost increase and Fossil fuel increase.

Settings that affect profitability

Components switched on

Which components are switched on in Current and in the scenario determines consumption and generation, and therefore the cost comparison: a heat pump or wallbox that is switched off uses no electricity in the simulation.

Whether the price changes too depends on the price source: with From system design, only components that are switched on count towards the Total investment. With Fixed price your fixed price applies, with From proposal the total of the proposal – in both cases regardless of which components are switched on.

Make sure Current and the scenario are comparable: a demand that one tab covers should also be represented in the other. Typical cases:

  • Heating: If the scenario plans a heat pump, today's Heating system must be switched on in Current, e.g. the gas or oil boiler – and vice versa. Otherwise the heat demand is missing on one side.

  • Mobility: If the scenario plans a wallbox for an EV that replaces a combustion car, Current needs the costs of the previous car. You set these in the Wallbox planning.

  • Household: The Household must be switched on in both tabs. You can deliberately model a different consumption in the scenario, e.g. when another family member moves in – the savings then include this change.

If a component only exists in Current, it is replaced by nothing – or by whatever is planned in the scenario. If a component only exists in the scenario, it counts as new.

Price source

You set the price of the planned system at the bottom right in the System area under Price source:

  • From system design: autarc prices each component separately.
    For each component you set its own price source: by the price rules of your proposal templates, as a fixed price or from a specific proposal. For example, you can price the solar system by the rules and the wallbox as a fixed price.

  • Fixed price: you enter a fixed price.

  • From proposal: autarc uses the total of an existing proposal. The proposal's subsidy is deducted.

Below it you see Price based on system design, Subsidy and the Total price, which goes into profitability as the Total investment.

Financial settings

On the right in the Settings area, under Financial settings, you set how many years are calculated and how much prices rise each year:

  • Analysis period (years): 20 years by default.

  • Yearly energy cost increase (%): 3 % by default.

  • Yearly fossil cost increase (%): 5 % by default.

Recurring costs

Under Recurring costs you add running costs with Add cost, e.g. maintenance, insurance or a later inverter replacement:

  • Amount / year (€): the yearly amount.

  • Active period (years): for how many years from installation the costs apply.

The costs apply to the tab where you add them. Costs in Current – e.g. the maintenance of the old oil boiler – increase the savings, costs in a scenario reduce them. A new scenario takes over the costs from Current; after that you can change, delete or add to them independently.

Formulas

Yearly savings = costs Current − costs scenario ± recurring costs  

Cumulative position = − total investment + sum of yearly savings

Internal rate of return (IRR): − total investment + Σ savings year n / (1 + IRR)^n = 0

LCOE = cost of solar system and battery / (solar yield per year × analysis period)

Frequently asked questions

Why does breakeven show "-"?

The savings don't cover the investment even after 50 years, or the scenario saves nothing compared with Current. Check the Price source, the tariffs and whether the same consumers are switched on in both tabs.

Why is my internal rate of return low?

Common causes:

  • Unequal comparison: A consumer is only switched on in the scenario, e.g. a new heat pump without the old heating in Current. Then only the additional electricity consumption shows, not the fuel costs saved.

  • High price: Check the Price source – a proposal can contain items that don't contribute to the savings.

  • Low self-consumption rate: A lot of solar power is fed into the grid, and the feed-in tariff is usually much lower than the electricity price. A battery or more daytime consumption can help. More in What is the self-consumption rate?

  • Low electricity prices: A cheap electricity tariff or a low Yearly energy cost increase reduce the savings.

  • Recurring costs in the scenario: Maintenance or insurance of the new system reduce the savings every year.

Why does profitability look too good?

Usually something is switched on in Current that is missing in the scenario – e.g. the old heating, although the scenario contains no new heating. Then the scenario saves costs that would in fact continue. Also check whether the Recurring costs in Current and the price increase are realistic.

Why does profitability change when I add a battery?

A battery increases the Total investment, but usually also the savings, because more solar power is used on site instead of fed in. The internal rate of return shows which effect wins. Compare two scenarios with and without a battery via Compare with:.

Why is there no profitability on the Current tab?

Profitability always compares a planned system with today's situation. In Current there is nothing to compare – there you only see today's costs under Current costs.

Are subsidies included?

Yes, if the price comes from a proposal: its subsidy is deducted from the system price and reduces the Total investment.

Are module ageing or an inverter replacement included?

The solar yield is the same in every year of the analysis period. You can enter an inverter replacement or other later costs as Recurring costs.

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