Impact of Different Economic Performance Metrics on the Perceived Value of Solar Photovoltaics

Research output: NRELTechnical Report


Photovoltaic (PV) systems are installed by several types of market participants, ranging from residential customers to large-scale project developers and utilities. Each type of market participant frequently uses a different economic performance metric to characterize PV value because they are looking for different types of returns from a PV investment. This report finds that different economicperformance metrics frequently show different price thresholds for when a PV investment becomes profitable or attractive. Several project parameters, such as financing terms, can have a significant impact on some metrics [e.g., internal rate of return (IRR), net present value (NPV), and benefit-to-cost (B/C) ratio] while having a minimal impact on other metrics (e.g., simple payback time). Assuch, the choice of economic performance metric by different customer types can significantly shape each customer's perception of PV investment value and ultimately their adoption decision.
Original languageAmerican English
Number of pages53
StatePublished - 2011

NREL Publication Number

  • NREL/TP-6A20-52197


  • economic performance
  • energy
  • incentives
  • internal rate of return
  • LCOE
  • levelized cost of energy (LCOE)
  • monthly bill savings
  • net present value
  • payback
  • photovoltaic
  • PV


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