Simple payback attempts to determine the number of years it will take to accrue enough annual savings to offset the initial investment. If the system does not have an annual savings that system will never payback. If the system cost less than its alternative and has an annual savings the payback can be said to be instant.

Simple payback does not account for the time value of money and should not be used as the sole criteria for go/no-go analysis when comparing multiple systems. Simple payback does not answer the question “is a certain investment profitable?”. Simple payback doesn’t consider what happens after the investment is repaid.

The Visual Economic Tool uses the cash flows calculated for each year in the life cycle to determine payback. If a payback year has not been met in the life cycle, 'No Payback' will be displayed. This is because there is nore more cash flow information available to calculate payback, if you use a longer life cycle this may allow for payback to be calculated.