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Stage 9 of 13 / Calculation

Build the financial case

Compute CAPEX, OPEX, NPV, IRR, payback and LCOE, and test the result against deterministic sensitivities.

  • Practitioner
  • 13 stages
  • 14 min
  • Solar PV and electrical storage
Development preview Solar PV and Battery: Full Engineering Workbench
Development preview. The calculations on this journey run on existing EngiMetric engines, but the journey text and scope have not completed independent engineering review. The route is excluded from search while it remains a preview.
Professional review required.The engines are implemented and unit-tested in this repository, but the journey copy, defaults and boundary still require review by a licensed engineer before publication. The route remains a noindex preview. Current verification state: Needs engineering review.

After this stage you can

Learning objectives
  • Read CAPEX, OPEX, NPV, IRR, payback and LCOE as one consistent cash flow.
  • Explain why a null IRR can be more honest than a number.
  • Identify which sensitivity moves the case most and why.

The engineering

The cash flow is nominal and explicit. Year zero is the capital outflow; each later year carries tariff-escalated savings, escalated operating cost, PV degradation and any battery replacement. NPV discounts every year at the stated nominal rate. IRR is solved by bisection and returns null when the cash flow never changes sign.

Savings are measured against a stated baseline import, not against a full tariff optimisation. Time-of-use, demand charges and export limits are not re-optimised by the financial engine. A project that looks strong on an average tariff can be weaker under a real tariff structure.

LCOE uses the PV + BESS lifecycle cost divided by discounted PV generation. It is not a retail tariff and it excludes financing, tax, grants and residual value. Read it as a boundary-specific screening metric, not a price.

EngiMetric / solar workbench

Your project, computed stage by stage

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Preview screen. Inputs are saved in this browser only. Resource presets and tariffs are illustrative. Failed checks stay visible; a clean summary is not a stamped design.

Inputs and outputs

What this stage owns

You own

  • PV, BOS, installation, storage and design costs
  • Contingency, fixed and variable OPEX, insurance
  • Import/export tariffs, escalation and baseline import
  • Discount rate, project years and battery replacement cost

You produce

  • CAPEX breakdown and year-one OPEX/savings
  • NPV, IRR, simple and discounted payback
  • LCOE and five deterministic sensitivities

Your deliverable for this stage

Capstone evidence

A metrics table with CAPEX, NPV, IRR, payback, LCOE and sensitivity, plus the assumptions behind each.

Stage assumptions, limits and sources

Provenance

Assumptions

  • Nominal cash flows with constant escalation rates.
  • Tariffs are a single average import rate and a single export rate.
  • Battery replacement is one event at the planning year.

Constraints

  • No debt, tax, depreciation, grant or residual value.
  • No Monte Carlo or probability distribution; sensitivities are deterministic perturbations.

Limitations

  • No financing structure, power-purchase agreement or merchant price curve.
  • No demand charges, time-of-use optimisation or export limitation.
  • The result is not an investment recommendation.

Review status

  • Needs engineering review
  • Professional review is required before publication or use as a design basis.

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Stage kind: Calculation / Journey: solar-bess-screening / Stage: economics