| Year | Annual Savings | Cumulative Savings | Net Position | Discounted NPV |
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This calculator evaluates the financial case for an HVAC energy-efficiency investment. Enter the project cost, annual energy savings, electricity rate, any operations-and-maintenance savings, and a utility rebate, then set an analysis period and discount rate. It returns annual dollar savings, simple payback, discounted net present value (NPV), and total lifetime savings, plus a year-by-year cumulative cash-flow table.
Simple payback answers “how fast do I get my money back,” while NPV answers “is this worth more than my cost of capital over the equipment life.” Looking at both keeps a quick-payback bias from overlooking long-lived measures that compound value over time.
| Net cost | net = project cost − rebate |
| Annual savings | $ = (kWh × rate) + O&M savings |
| Simple payback | years = net cost ÷ annual savings |
| NPV | NPV = −net cost + Σ [ savings ÷ (1 + r)t ] |
| Lifetime savings | undiscounted = annual savings × analysis years |
The method uses standard life-cycle cost relationships: simple payback as net cost ÷ annual savings, and NPV as the sum of discounted annual cash flows over the analysis period at the discount rate r, less the up-front net cost. A positive NPV indicates the project earns more than the discount rate. The model holds savings and rate constant year to year and does not include inflation or escalation.