Simple payback exposes the first division
Simple payback divides net installed cost by annual net benefit. Net installed cost depends on the chosen tax and assistance treatment. Annual net benefit depends on self-consumed energy, export treatment, operating cost, and any separately evidenced demand value.
A zero, missing, or negative annual benefit suppresses the result. A simple payback result ignores the time value of money.
Five inputs usually move the range
Installed cost changes the numerator. Solar yield and useful load offset affect annual energy. The tariff controls value. The ITC changes project cash timing when confirmed. Operating and maintenance cost reduces annual benefit.
The Explorer keeps each input visible and recalculates only from the submitted scenario. It does not import a hidden Canadian cost or maintenance default.
Discounted payback needs a full cash-flow assumption set
Discounted payback applies the user's discount rate to each year's net cash flow. Escalation, degradation, term, operating cost, and output range must remain visible because they can change whether a crossing occurs within the selected period.
A chart midpoint is useful for shape, but it is not a replacement for the displayed low and high boundaries.
The tornado chart is a declared-input illustration
The diagram shows direction only. Higher installed cost or operating cost lengthens payback. Higher useful generation or avoided electricity value shortens it. Tax benefits can reduce net cost only when the claimant and basis are confirmed.
Worked value: Value suppressedA project-record benchmark remains suppressed because current records do not publish both realized savings and eligible installed cost.
Calculate annual net benefit before payback
Simple payback divides net installed cost by annual net benefit. Net installed cost must reflect only confirmed adjustments. Annual net benefit should add separately calculated energy, export, demand, settlement, or other operating value and subtract entered annual operating cost. Each line needs compatible units and the same time basis.
The calculation fails when annual net benefit is zero or negative. It should also remain unavailable when a required bill component is missing or when the model cannot establish useful generation. Simple payback does not include the time value of money, financing payments, tax timing, replacement expenditure, residual value, or changing annual cash flow unless those items are built into a separate cash-flow model.
Convert generation to useful economic output
Annual photovoltaic generation is not automatically annual bill savings. The owner needs to distinguish energy used behind the meter, energy exported, and energy curtailed. Behind-the-meter use takes the value supported by the applicable bill and tariff. Exported energy takes the verified export treatment. Curtailment receives no value unless a contract or settlement rule provides one.
Annual totals can provide a screening bound, but interval data is needed when timing controls self-consumption, demand, export, or settlement value. The same generation estimate can produce different economics at two sites with different load shapes. Enerwav therefore keeps useful generation and avoided electricity value as declared inputs in the sensitivity example rather than describing them as typical.
Define the cost boundary once
The numerator should match the decision being tested. A construction-only comparison, an owner total-cost comparison, and an after-tax investment comparison are different questions. The selected boundary should state whether it includes development, engineering, permits, interconnection, equipment, construction, owner costs, financing, taxes, reserves, contingencies, operating setup, and later replacement.
Changing the boundary between scenarios can create a false winner. A PPA proposal may omit owner capital but include long-term payment obligations. An ownership scenario may include capital but retain tax benefits and residual asset value. Simple payback is most useful when the compared alternatives use the same project boundary and when omitted cash flows are listed beside the result.
Use discounted payback only with a dated cash flow
Discounted payback discounts each period's net cash flow to the selected valuation date and identifies when cumulative discounted cash flow crosses zero. The model needs a project term, discount rate, annual generation path, electricity-value path, operating cost, tax cash timing, capital timing, and any replacement or terminal assumptions included in the decision.
A discounted result can remain not reached within the selected term even when simple payback exists. A range can also cross in one boundary and remain unrecovered in the other. Enerwav preserves those separate outcomes rather than replacing them with one midpoint claim. The midpoint chart shows shape only; the displayed boundaries remain the decision evidence.
Read the tornado as a question list
The declared-input tornado changes one value while holding the others at the reference case. The bar length shows which tested change moves simple payback most within that illustration. It does not show probability, market distribution, correlation, financing, or a recommended contingency. The reference values are chosen only to demonstrate arithmetic.
A project-specific sensitivity should use the owner's budget range, engineering generation range, tariff evidence, operating-cost range, and confirmed tax treatment. Inputs that move together should also be tested together. For example, a different system size can change cost, generation, interconnection scope, and self-consumption at once. A one-variable chart cannot represent that interaction.
Do not infer a market range from incomplete records
The reviewed Canadian project records support locations, technologies, selected capacities, and operating or project states within their stated evidence. They do not provide a consistent pair of installed cost and realized annual savings. Without that pair, Enerwav cannot calculate comparable observed payback across the library.
A vendor proposal, public announcement, or financing claim would also need review for cost boundary, tax treatment, incentive treatment, energy-price assumptions, operating period, and whether the result was projected or achieved. Until a comparable evidence set exists, the page keeps a commercial payback benchmark suppressed and directs the reader to declared project inputs.
Use payback as one screen, not the investment decision
Payback indicates when a defined stream of benefits recovers a defined cost. It does not state net present value, internal rate of return, financing affordability, accounting treatment, tax compliance, resilience value, asset condition, contract risk, or strategic fit. An owner should decide which of those measures govern the project before selecting one result as the approval metric.
The final review should compare the low and high boundaries, identify the inputs responsible for the spread, and assign each open item to a source or responsible adviser. If the project changes size, tariff, schedule, contract, or operating objective, rerun the calculation rather than carrying the earlier payback into the new scope.