The paper presents a tool for calculating the profitability of investment in small photovoltaic power plants. At the beginning of the paper, the basic goals of European countries regarding consumption from renewable energy sources are presented. Then the basic parts of the photovoltaic system (photovoltaic cell, photovoltaic module, inverter and meter) are described and the methods of connecting solar power plants to the power grid are described too. This is followed by a section in which incentives and laws are presented for the purpose of encouraging ever-increasing production from renewable energy sources, including solar energy. Then, the procedure for calculating solar radiation (Liu-Jordan, Klein method) is described, which is later used in the cost-effectiveness calculation tool. The last chapter presents the basic economic parameters used in solar power plant profitability analyzes (discounting, internal rate of return method, present value method, future value method,…). Also a tool (excel document) for calculating the profitability of investments in solar power plants are presented, which was applied at several locations in Croatia. The calculation results are tabulated and commented on for each location.