Plain-English definitions for the financial and energy terms used across Amperage: NPV, IRR, payback, export ratio, self-sufficiency, time-of-use tariffs, demand charges and more. Each term has a stable link so explainers elsewhere in the app can point straight at it.
Every term below is defined once, here. The in-app explainer popups render these exact definitions and link back to this page. Anchors are stable, so you can send a customer straight to a term.
NPV (Net Present Value)
The lifetime dollar value of a system in today's money: every year of modelled savings (minus the upfront cost) discounted back to the present at the discount rate. A positive NPV means the system earns more over its life than it costs; the "NPV Maximising" scenario simply picks the system with the largest one.
IRR (Internal Rate of Return)
The effective annual return the system earns on its upfront cost, the discount rate at which the system's lifetime cashflows break even. Useful for comparing solar against other uses of the same capital: an IRR of 15% beats a term deposit at 5%.
Payback period
The number of years until cumulative savings repay the net upfront cost (after upfront incentives). Amperage uses escalated, degradation-aware savings plus any time-limited LGC revenue (not a naive cost ÷ year-one-savings division), so the figure matches the full cashflow model.
Capex (capital expenditure)
The upfront installed cost of the system. "Net capex" is that cost after upfront incentives (STCs, VEECs, PDRS) are deducted, and that is the number payback and NPV are measured against.
Depreciation tax benefit
Adds a yearly tax saving to the cashflow from depreciating the net system cost (after upfront incentives like STCs, VEECs and PDRS). Two methods: Straight line spreads the deduction evenly over the asset life — yearly benefit = net cost ÷ asset life × tax rate, e.g. $100,000 over 20 years at 30% adds $1,500 a year for each of those 20 years. Diminishing value front-loads it instead, using the ATO's 200% method on the reducing balance — each year's deduction = remaining balance × (200% ÷ asset life), so the tax benefit is largest in year 1 and shrinks every year after. Both assume the client is a business that can use the deduction, and their accountant should confirm eligibility and which method suits the asset. Instant Asset Write-off may let eligible businesses deduct the full cost in year one instead - thresholds and eligibility change, so confirm current rules with the client's accountant.
Export ratio
The share of the system's total generation that is exported to the grid rather than used on site. A low export ratio means most generation offsets your own (expensive) consumption; a high one means surplus is being sold at the (much lower) feed-in rate. The "Energy Ideal" scenario targets the export share that suits the site's load shape.
Self-sufficiency
The share of the site's consumption met by its own solar and battery (self-used energy ÷ total load, capped at 100%). Distinct from load offset: self-sufficiency counts only energy you actually use on site, so exports never inflate it.
Load offset
Total solar generation as a share of the site's consumption, including exported energy, so it can exceed 100% on an oversized system. Compare with self-sufficiency, which counts only the generation used on site; the two coincide only when nothing is exported.
Time-of-use (TOU) tariff
A tariff that charges different rates by time window, typically peak, shoulder and off-peak. Solar generates during daytime shoulder/peak windows, so each self-consumed kilowatt-hour on a TOU tariff is usually worth more than on a flat rate.
Demand charge
A charge based on your highest power draw (kW or kVA) in a billing period, separate from the energy (kWh) you consume. Solar only reduces it when the peak lands during generation hours; shaving an evening peak usually needs a battery discharging in the demand window.
Daily (supply) charges
Fixed charges billed per day regardless of consumption: the retailer supply charge, metering charges and similar. On bills Amperage extracts, all daily and fixed charges are unified into one list with a name, days, rate and total for each row.
Feed-in tariff (FiT)
The rate paid for each kilowatt-hour exported to the grid, typically a fraction of the retail import rate for commercial sites. Because exports earn so much less than self-use saves, sizing to maximise self-consumption usually beats sizing for generation alone.
ROI (Return on Investment)
Total lifetime savings as a multiple of the upfront cost, before any discounting. ROI ignores when the money arrives, so a system that pays back slowly can still show a high ROI. Read it alongside payback and IRR, which do account for timing.
LCOE (Levelised Cost of Energy)
The system's total lifetime cost divided by the energy it generates over its life, in cents per kilowatt-hour. It is the break-even price of your own solar power: when it lands below your grid import rate, every self-consumed kilowatt-hour saves money.
Discount rate
The annual rate that converts future savings into today's money in the NPV calculation. A higher discount rate weights near-term savings more heavily and distant ones less. Amperage defaults to a commercial figure you can override per project or per company.
Energy price escalation
The assumed yearly rise in grid electricity prices. Solar savings track the price you avoid paying, so a higher escalation makes the same system save more over time. Export (feed-in) prices escalate on their own path, and usually far slower, often flat.
Self-consumption
The share of your solar generation used on site as it is produced, rather than exported. Self-used energy offsets expensive grid power while exports earn only the low feed-in rate, so high self-consumption is what makes solar pay. Distinct from self-sufficiency, which measures the share of your load that solar covers.
Panel degradation
The slow decline in a panel's output as it ages, quoted as a percent per year, commonly around 0.5%/yr. Amperage applies it across every year of the analysis, so later years generate, and save, a little less than the first.
DC/AC ratio
The ratio of panel (DC) capacity to inverter (AC) capacity. Above 1 the array is oversized against the inverter, which lifts output in weak light but clips a sliver of the midday peak the inverter cannot pass through. A modest amount of clipping is normal and usually worth it.
Battery dispatch
The rule that decides when a battery charges and discharges each hour. Storing surplus solar for the evening is always on; extra strategies (shaving a demand peak, or arbitraging cheap-to-expensive tariff windows) layer on where the tariff rewards them.
Energy arbitrage
Charging a battery when power is cheap and discharging when it is dear, to earn the gap. On a time-of-use tariff that means charging off-peak and covering the evening peak; on a wholesale/spot tariff it means tracking the market price. Modelled capture sits below a perfect-foresight ideal because real dispatch cannot see the future.
Charge mix (bill breakdown)
Now figures are read straight from your bill, ex GST. With The System recomputes each category from your modelled post-solar usage at the same tariff rates — not a flat percentage cut applied to the old bill — so different categories can fall by different amounts. Any credit for solar exported to the grid is shown separately in the annual savings figures, not netted into any one category here.
Network tariff review
A check of whether the site is on the cheapest network tariff for its usage, and whether adding solar makes a different tariff cheaper. The saving is modelled from the network's published price list against the metered load; acting on it is a switch arranged between the retailer and the network, not something Amperage changes.