Simple payback is the time it takes to recover the cost of an energy efficiency measure through the savings it generates. It’s calculated by dividing the upfront cost of the measure by the annual savings. The savings can include reduced energy bills and changes in regular operations and maintenance costs.
Simple Payback (years) = Initial Cost / Annual Cost Savings
Here is a booklet of Life-Cycle Cost and Payback Period Analysis. You can also check out ANSI/ASHRAE Standard 100-2018: https://www1.eere.energy.gov/buildings/appliance_standards/pdfs/acim_preliminary_tsd_ch8_lcc_pbp_2012_01_16.pdf?utm_source=chatgpt.com