Simple payback estimates how many years of energy savings are needed to recover an installation investment.
Formula
Simple payback (years) = net upfront investment ÷ estimated annual savings, provided savings are positive. If annual savings are zero or negative, the investment does not pay back under those assumptions.
Example
For an installation costing €1,200 and estimated savings of €240 per year, simple payback is five years. The figure excludes financing, discounting, repairs and future energy-price changes.
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