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Definition · Finance & ROI

Solar ROIReturn on photovoltaic investment

TL;DR

ROI is an investment return over a defined period. Payback measures the time needed to recover the initial cost. Both indicators must account for project costs and income.

Definition

ROI expresses net investment profit relative to invested capital over a defined period, as a percentage. It differs from payback, expressed in years.

📈

ROI

% over a period

⏱️

Payback

Years

💰

Investment

Full net cost

🔄

Annual cash flows

Income less costs

Technical explanation

For simple payback, divide net initial cost by an assumed constant annual net cash flow. This includes avoided purchases and export income, less maintenance and other costs. If cash flows change, accumulate them year by year, including losses, replacements and operating life. This simple calculation omits discounting; a full financial analysis can include it.

Swiss context

Use the full quote, confirmed grants and applicable tax treatment. Use the purchase tariff actually avoided and the export contract for your address. Compare several output, self-consumption and tariff scenarios; the canton alone does not guarantee payback.

Related terms

Related guides

FAQs — Solar ROI

How do I calculate my personalized ROI?+

The calculator gives an initial estimate. For a decision, document full cost, grants, hourly consumption, tariffs, fees and replacements. Request payback and return over the chosen period separately.

Does ROI change if prices increase?+

A higher avoided purchase tariff can increase the value of electricity consumed on site. The result also depends on export prices, volumes, costs and timing. Simulate higher, stable and lower tariffs rather than assuming a guaranteed trend.

Sources & method

Check equipment values in the offered model’s datasheet and warranty terms. Confirm grant, permit and connection requirements with the responsible programme, municipality and grid operator.

This content is for information only. For your project, verify prices, grants, timelines, permissions and expected returns with the relevant authorities, grid operator and installer, and check the applicable contracts.

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Calculate the profitability of your installation

Estimate output, avoided purchases and payback using your data. Confirm the assumptions in a quote.

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