Israel Solar Feed-In ROI Calculator
Why Rooftop Solar is Booming in Israel
Israel enjoys over 300 sunny days per year across much of the country and has steadily expanded rooftop solar incentives to reduce reliance on imported fuels. Homeowners considering a photovoltaic system weigh capital costs against guaranteed feed-in tariffs, self-consumption savings, and long-term maintenance. The Israel Solar Feed-In ROI Calculator helps you translate those incentives into a multi-decade cash flow projection tailored to your roof, rate plan, and consumption profile. By modeling net-metering credits and export payments, it reveals when your system pays for itself and how sensitive results are to tariff changes or energy price inflation.
Israeli solar programs typically allow households to consume a portion of generated electricity on-site at the retail grid rate while selling excess energy to the Israel Electric Corporation. The mix between self-consumption and export depends on your daytime usage pattern, battery storage choices, and inverter sizing. Entering your estimated self-consumption percentage lets the calculator split production into two revenue streams: avoided purchases from the grid and feed-in credits. This dual-income perspective is crucial for evaluating proposals from installers, especially when comparing tariff types offered in different municipalities or under special tenders for small and medium roofs.
The Cash Flow Mechanics
Every run of the calculator computes the upfront cost, yearly production, maintenance, and replacement events. The fundamental equation for annual revenue multiplies energy output by the appropriate price. With as production in kWh, as the self-consumption ratio, as the retail rate, and as the feed-in tariff, annual value becomes
. Production itself decays slightly each year as panels degrade. If is the annual degradation rate, year output equals . The calculator applies this decay factor each year when computing revenue so you see how even small degradation percentages erode long-run earnings. Maintenance is modeled as a percentage of the upfront capital cost, and a one-time inverter replacement can be scheduled whenever your installer warranty expires.
Cash flow analysis often treats the installation cost as a negative value at year zero, followed by positive net revenues in subsequent years. To summarize the project, the calculator tallies cumulative cash flow and identifies the first year it becomes positive—the simple payback point. It also discounts future cash flows back to present value using your chosen discount rate, delivering a net present value (NPV) that accounts for the time value of money. Finally, it derives an internal rate of return (IRR) by iterating over discount rates until NPV equals zero, offering an intuitive percentage return you can compare to other investments.
Example Scenario
Consider a family in Be’er Sheva installing a 7.5 kW rooftop system. Local installers quote 5,200 ₪ per kW, bringing the upfront cost to 39,000 ₪. Production averages 1,700 kWh per kW annually thanks to the Negev’s intense sun. Because the family works from home, they self-consume 55% of generated electricity, offsetting grid purchases at 0.63 ₪ per kWh. The rest exports at a long-term tariff of 0.48 ₪ per kWh. Annual maintenance runs 1.5% of the initial cost, and the installer warns that the inverter will likely need replacement in year 12 at a cost of 9,000 ₪. With a modest 0.8% degradation and a 4% discount rate, the calculator shows annual revenue of roughly 7,131 ₪ in the first year, falling slightly as the panels age. Net cash flow turns positive in year six, and the NPV over twenty years exceeds 28,000 ₪, corresponding to an IRR of just above 11%. That compares favorably with many fixed-income products and highlights why Israeli households continue to invest in solar.
Interpreting the Results Table
After clicking “Calculate ROI,” the tool generates a year-by-year table summarizing production, revenue, maintenance, replacement events, cumulative cash flow, and discounted value. Downloading the CSV lets you share these numbers with a banker or installer. Look for the year in which cumulative cash flow turns positive to spot the payback. The discounted column helps you understand whether a later inverter replacement erodes value too severely. If NPV is marginal or negative, experiment with higher self-consumption (perhaps by adding a battery), negotiating a lower installation price, or assuming faster electricity price inflation.
| Metric | Value |
|---|---|
| Upfront Cost | ₪39,000 |
| Year 1 Revenue | ₪7,131 |
| Year 12 Inverter Replacement | ₪9,000 |
| Simple Payback | Year 6 |
| 20-Year NPV (4% discount) | ₪28,212 |
This illustration assumes tariffs remain constant. If your utility pays a higher export rate for the first few years before stepping down, run separate scenarios using weighted averages. The calculator’s CSV output makes it easy to splice together hybrid schedules by editing the exported file in a spreadsheet.
Policy Trends to Monitor
Israel’s renewable energy policy continues to evolve as the government pushes toward ambitious targets for 2030. Recent Public Utilities Authority decisions have introduced differentiated tariffs for roofs of varying sizes, time-of-use rates, and incentives for storage. Use the calculator to examine how a time-of-use adjustment could affect returns: if export tariffs drop during midday peaks, increasing self-consumption or adding batteries becomes more valuable. Stay in touch with your installer or follow the PUA’s announcements so you can refresh the model whenever a tariff change is proposed. The CSV output gives you a baseline to compare against new policy drafts, making it easier to advocate for favorable terms within your homeowners’ association or municipality.
Another policy dimension involves net-metering caps and grid connection queues. Some neighborhoods have limited hosting capacity, meaning your project may need transformer upgrades or export curtailment. If your installer warns that exports might be capped at a certain percentage, adjust the self-consumption field upward and rerun the numbers. The calculator’s ability to model low-export scenarios ensures you are not surprised by reduced revenue once the system is energized. It can also help you justify investing in demand-shifting appliances or community storage programs that raise self-consumption ratios.
Best Practices Uncovered
The breakdown clarifies which levers matter most. Increasing self-consumption—by shifting laundry or dishwashing to daylight hours or installing a smart hot-water controller—often moves the payback a full year earlier. Negotiating maintenance contracts or taking on basic panel cleaning yourself can reduce annual expenses, but be mindful of warranty requirements. Pairing the calculator with an energy monitor helps verify your actual consumption split after installation so you can adjust behavior and beat projections.
Many Israeli households finance solar with low-interest green loans or mortgage extensions. Because loan payments add another cash outflow, you can approximate the effect by adding the annual debt service to the maintenance percentage or subtracting it from the net cash flow in the downloaded CSV. For a more nuanced analysis, integrate the CSV with a personal finance model that includes loan amortization alongside the solar cash flows.
Limitations and Assumptions
Real-world performance depends on roof orientation, shading, dust accumulation, and inverter efficiency. The calculator assumes a single degradation rate and constant tariff, while actual policies can change with new Public Utility Authority rulings. It also treats maintenance as a simple percentage and does not include unexpected repairs such as optimizer replacements or storm damage. Always review installer warranties, insurance coverage, and municipal regulations. Despite these caveats, the model offers a grounded starting point for comparing proposals and understanding the magnitude of financial benefits available under Israel’s generous solar framework.
Keeping the Project on Track
Solar projects span permitting, installation, inspection, and ongoing maintenance. Use the calculator as a living document during each phase. Before signing a contract, enter the quoted costs and confirm that the projected payback meets your goals. During construction, update the numbers if change orders arise. Once the system is operational, track actual production via your inverter monitoring portal and compare it to the model. If the first-year production falls short, investigate shading or inverter settings and work with your installer to rectify issues while warranties are active. Documenting assumptions and actuals in the CSV strengthens your case if you need service or compensation.
Long-term performance also depends on cleaning and maintenance. Desert dust, coastal humidity, and seasonal pollen can reduce output. Consider adding a maintenance log to the CSV, noting cleaning dates and measured improvements. If output drops faster than the assumed degradation rate, you can proactively budget for additional cleaning or explore hydrophobic coatings. Keeping your financial model up to date ensures the investment continues to deliver the returns promised in the original projection.