Savings Over Investment Ratio Calculator (SIR Tool)
The Savings to income ratio (SIR) is a metric used to measure the ability of a technology to recover the investment costs through savings achieved from customer utility bill cost reduction. The ratio divides the "savings" by the "investment"; an SIR score above 1 indicates that a household can recover the investment. In this analysis we also discount the savings by the social discount rate to account for the time value of money, therefore more savings are actually achieved looking at a cash flow basis. The model allows users to calculate the SIR for residential solar projects in all 50 states based on the average retail electricity rate of the state and the average power a residential system could produce in that state. Users have the ability to change the gray cells in the SUMMARY tab, to adjust some of the default assumptions including adding other federal and state incentives, based on their own individual assumptions.