What Is a Savings-to-Investment Ratio (SIR)?
Silver State Incentives · Published October 14, 2026
The Savings-to-Investment Ratio (SIR) is the present value of a project's lifetime savings divided by its net investment. An SIR above 1.0 means the project returns more than it costs. Unlike simple payback, SIR accounts for the full life of the savings and the time value of money.
How is SIR calculated?
SIR = present value of annual savings over the measure life ÷ net investment (project cost minus incentives). Our calculator uses a 15-year life and a 5% discount rate by default.
Why does SIR matter more than payback?
Two projects can both pay back in two years, but one may keep saving for 15 years and the other for five. SIR captures that difference. Payback tells you how fast you recover cash; SIR tells you how much value you create.
How do incentives change SIR?
Incentives reduce the denominator. A project with a $100,000 cost and a $40,000 incentive has a $60,000 net investment, so the same savings produce a higher SIR.
What SIR should we target?
Any SIR above 1.0 creates value. Many organizations rank measures by SIR and fund the highest first. We present SIR for every measure in our financial model.
Why this matters for your facility
Lower net cost
Incentives reduce the investment.
Verified savings
Measured under IPMVP.
24/7/365
VEM protects results.
Utility capital pays for part of the upgrade
Every project we model shows the incentive, the net cost and the resulting payback, SIR and IRR.
- We identify every eligible NV Energy prescriptive and custom incentive.
- We stack lighting with controls to raise the incentive 20–50%.
- We prepare and submit the application, then verify savings under IPMVP.
Quick savings estimate
Adjust the inputs for a planning estimate. The full calculator adds incentives, payback, CO2 and a 10-year view.
Assumes $0.10/kWh and $12/kW-month. Change rates in the full calculator.
Planning estimate only. Actual savings and incentives are confirmed through an on-site audit and utility program approval.
Related solutions
Frequently asked questions
Is this financial advice?
No. It is general information. Your consultant models your specific project.
Where can I run the numbers?
Use our savings calculator, which reports SIR, IRR, payback and CO2.
Who wrote this?
The Silver State Incentives energy consulting team.
Can SSI review my project?
Yes. Book a consultation.
Turn Your Overhead Into Net Profit.
Book a no-pressure consultation with a veteran energy consultant. We will show you the savings, the incentive and the payback before you commit.
Every month you wait is money lost to inefficiency. Incentive funding is limited per program year.