What Is a Good Solar IRR?

A good solar IRR is not one magic number. It depends on project risk, electricity price, financing, export value, and what the user could do with the same capital instead.

Why users ask this

Payback is easy to understand, but return-oriented buyers want to compare solar with deposits, bonds, other business projects, or simply keeping cash. IRR helps answer that question because it compresses the full cashflow into an annualized return.

How to read the number

Low single-digit IRR: usually only interesting if risk is very low or the project has non-financial value.
Mid single-digit to low double-digit IRR: often workable for cautious owners if assumptions are realistic.
Double-digit IRR: usually attractive, but only if the quote is complete and the self-consumption or tariff assumptions are defendable.

What can make IRR look fake

Using full retail value for exported electricity.
Ignoring shading, degradation, inverter replacement, or downtime.
Using module price instead of full installed cost.
Assuming unrealistically high self-consumption.

Why IRR alone is not enough

A small project can have a high IRR and still create limited total value. That is why IRR should be read together with NPV, annual savings, and payback. Return efficiency matters, but so does total money created.

Better framing

Instead of asking “what is a good solar IRR globally,” ask “what IRR is good for this roof, this tariff, this quote, and this owner’s required return?” That is the practical decision frame.

If a quote advertises a very high solar IRR, audit the export tariff, self-consumption, and installed-cost scope first.