Return on Investment

Return on Investment

The Return on Investment, or ROI, is a measure of the benefit or loss (the return) of any investment. It is useful in making financial decisions, and when comparing different investments.

The ROI calculation is the opposite of the payback calculation. The benefit or return is the annual utility savings. This is divided by the Net Cost of the system, and the result is expressed as a percentage or a ratio.

Using the same example as above, $3,114 Annual Savings / $10,045 Net Cost = 0.31, or 31% ROI.

That is a tremendous ROI when compared to a typical bank savings account of a few percent, or even the stock market with annual gains of 10%. The bottom line is that solar power is a great investment, with stable returns and very little risk.

Solar is one of the best investments you will ever make!

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