In short
Income value = sum of the discounted annual surpluses until decommissioning, minus removal. The biggest levers are actual yield, the remaining tariff term and the discount rate.
Formula
Inputs and typical mistakes
| Input | Correct | Common mistake |
|---|---|---|
| Yield | meter readings of recent years, weather-adjusted | design forecast |
| Degradation | derived from measured data, 0.5 % per year in the model | ignored or set too high |
| Tariff | rate per statement until the end of the 20th year after commissioning | wrong end date |
| Post-tariff revenue | market value or direct marketing, self-consumption | old tariff carried forward |
| Costs | complete, with price escalation | insurance, metering or lease forgotten |
| Investments | inverter replacement in year 15 or by condition | not included |
| Decommissioning | economically optimal year | fixed 25 or 30 years |
| Discount rate | risk-adjusted, disclosed | chosen without justification |
Which discount rate is right?
The rate reflects cost of capital and risk. A well-documented system with a secured tariff justifies a lower rate than a system with defects, a short lease or post-tariff revenue. We disclose the rate in the report and show in the sensitivity analysis what one percentage point more or less means. In the 250 kWp example it is about 3 %.
Example
The full worked example of a commercial system and a single-family home with all annual figures is on the page remaining value of a PV system. Use the calculator to enter your own figures.
Frequently asked questions
What is the income value of a PV system?
The present value of all surpluses the system will still generate from the valuation date until decommissioning, minus investments and removal.
Which discount rate is used for income value?
A risk-adjusted rate reflecting cost of capital and the uncertainty of revenue. It is justified in the report and varied in a sensitivity analysis.