Solar Photovoltaic Project Simple Financial Model RPS Solar Carve-Out Program v1.0
DATA ENTRY AND FINANCIAL SUMMARY Key
Scenario Definitions Entry Cells
Scenario A: Non-Taxable Rebate - Assu mes that the state rebate is non-taxable, but is subt racted from the cost basis for pu rpos es of determining tax credits and accelerated depreciation .
Calculation Cells (Not for Entry)
S c en en a r i o B : T a x ab ab l e R e b a t e - A s s u m e s t h a t t h e s t a t e r e b a t e i s t a x a bl e, e, b u t i s n o t s u b t r a c t e d f r o m t h e c o s t b a s i s f o r p u r p o s e s o f d e t e r m i n i n g t a x c r e d i t s a n d a c c e le le r a t ed ed d e p r e c i a t i o n . B o t h S c en en a r i o s a s s u m e t h a t t h e p r o j e c t o w n e r c a n u s e b o t h f e d e r al al a n d s t a t e t a x b e n e f i t s
Select Taxable or Non-Taxable Entity
Taxable Non-Taxable
Taxable
Project and Customer Cost Assumptions Solar Photovoltaic System Size Total System Cost/W att
$
Total System Cost
$
200000 W atts (DC ST C) 5.500 $/W att (DC STC) 1,100,000.00
CEC Rebate Assumptions Rebate$ per/W att Total Rebate
$
-
$/W att (DC STC)
1
2
3
4
5
6
7
8
0.00%
0.00%
Tax Assumptions Federal Tax Rate
35%
State T ax Rate Effective T ax Rate
10% 42%
Federal Tax Credit State Tax Deduction 5 Year Accelerated Depreciation Schedule (MACRS)
30% 100% 20.00%
32.00%
19.20%
11.52%
11.52%
5.76%
Depreciation Asset Basis Gross Cost Rebate Less 50% of Federal T ax Credit
20.00%
32.00%
19.20%
11.52%
11.52%
5.76%
$ $ $
1,100,000 (165,000)
$
935,000
Project Performance and Savings/ Cost Assumptions Annual Net Capacity Capacity Factor Annual Productio Production n Degradatio Degradation n
13.0% kW (DC ST C) to kW h AC 0.50% %
Project Life Depreciation Life Electricity Revenue (Avoided Costs) Electricity Revenue (Avoided Costs) Annual Adjustor Solar Renewable Energy Certificate (SREC) Auction Price SREC Auction Opt-In Term SREC Revenue Annual Adjustor SREC Contract Price SREC Contract Term Annual Operations Operations and Maintenance Maintenance Cost Cost Factor Annual Operations Operations and Maintenance Maintenance Cost Cost
25 20 0.16 3.0% 0.285 10 0.0%
Annual Operations Operations and Maintenance Maintenance Adjustor Adjustor Future Inverter Replacement Cost Inverter Life, Replace Every X Years
$ $
$ $ $
Years Years $/kWh
% $/kW h Ye Years (must be equal to or less than project life) % $/kWh Years (must be equal to or less than project life) 17.59 $/kW/Year 3,518 $/Year 3.0% % 0.30 $/W att (DC STC) 10 Year (must be equal to or less than project life)
Asset Basis Financing Assumptions % Financed w/ Cash % Financed w/ Loan Loan Interest Rate Loan Period Net Cost Customer Discount Rate Loan
Solar Project Financial Analysis Summary Net Present Value Simple Payback (100% Cash only) Estimated Return on Equity Scenario A: Guess Return on Equity
$ $
$
100% Cash 0% 9.00% Loan 20 Years (must be equal to or less than project life) 1,100,000 8.00% -
52,425 Year 7 9.4% 10%
Disclaimer: This Unofficial Cash Flow Model is intended to provide non-residential non-residential entities that are considering the purchase and installation of solar energy equipment with a general understanding understanding of possible financial implications of such purchase and installation. Those entities interested in learning more about the financial implications of the purchase purchase and installation of solar energy equipment equipment are urged to consult their own tax and financial financial experts. The information contained in the Unofficial Unofficial Cash Flow Model may not be relied on by anyone anyone for any purposes. purposes. Furthermore, the information contained in this model does not necessarily necessarily reflect the views of the Department of Energy Resources or the Commonwealth of Massachusetts, and reference to any specific method does not constitute an implied or expressed recommendation or endorsement of i t. Neither the Department of Energy Resources nor the Commonwealth of Massachusetts make any warranties or representations, expressed or implied, as to the usefulness, completeness, or accuracy of any processes, methods or other information contained, described, disclosed, or referred to in this m odel. Finally, neither the Department of Energy Resources nor the Commonwealth of Massachusetts makes any representation that the use of any product, apparatus, process, method, or other information will not infringe privately owned property rights and assumes assumes no liability of any kind or nature for any loss, injury, or damage directly or indirectly resulting from, or occurring in connection with, the use of information contained, described, disclosed, or referred to in this Unofficial Cash Flow Model.
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Solar Photovoltaic Project Simple Financial Model PRO FORMA AND PRODUCTION Start-Up 0
Project Output
Year 1
Annual Generation (kWh)
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Year 11
Year 12
Year 13
Year 14
Year 15
227,760
226,621
225,488
224,361
223,239
222,123
221,012
219,907
218,807
217,713
216,625
215,542
214,464
213,392
212,325
36,442
$
37,347
$
38,275
$
39,226
$
40,201
$
41,200
$
42,224
$
43,273
$
44,349
$
45,451
$
46,580
$
47,738
$
48,924
$
50,140
$
51,386
$ $ $
47,738
$ $ $
48,924
$ $ $
50,140
$ $ $
51,386
$ $ $ $ $ $ $ $ $ $ $
(4,870) (4,870) 42,868 42,868 42,868 (13,503) (4,287) 25,078
$ $ $ $ $ $ $ $ $ $ $
(5,016) (5,016) 43,908 43,908 43,908 (13,831) (4,391) 25,686
$ $ $ $ $ $ $ $ $ $ $
(5,166) (5,166) 44,973 44,973 44,973 (14,167) (4,497) 26,309
$ $ $ $ $ $ $ $ $ $ $
(5,321) (5,321) 46,064 46,064 46,064 (14,510) (4,606) 26,948
FINANCIAL SCHEDULES INCOME STATEMENT
Electricity Revenue (Avoided Cost) CEC Rebate SREC Auction Revenue SREC Contract Revenue Total Revenue (Avoided Costs) Replace Inverter? Operations & Maintenance Costs Inverter Replacement Cost Total Operating Expenses EBITDA Federal Depreciation Expense EBIT Interest Expense EBT Federal taxes saved/(paid) State taxes saved/(paid) [can not deduct federal depreciation expense] Net Income
$ $
-
$
-
$ $ $
No
$ $
-
$
-
$ $ $ $
-
$ $ $ $ $ $ $ $ $ $ $
$ $ $
-
$ $ $
$ $ $ $
(1,100,000) 77,000 330,000 (693,000) $
64,912 101,353 No (3,518) (3,518) 97,835 (187,000) (89,165) (89,165) 34,632 (9,784) (64,316)
$ $ $ $ $ $ $ $ $ $ $ $ $ $
64,587 101,934 No (3,624) (3,624) 98,311 (299,200) (200,889) (200,889) 73,752 (9,831) (136,968)
$ $ $ $ $ $ $ $ $ $ $ $ $ $
64,264 102,539 No (3,732) (3,732) 98,807 (179,520) (80,713) (80,713) 31,708 (9,881) (58,886)
$ $ $ $ $ $ $ $ $ $ $ $ $ $
63,943 103,169 No (3,844) (3,844) 99,325 (107,712) (8,387) (8,387) 6,412 (9,932) (11,908)
$ $ $ $ $ $ $ $ $ $ $ $ $ $
63,623 103,824 No (3,960) (3,960) 99,865 (107,712) (7,847) (7,847) 6,242 (9,986) (11,592)
$ $ $ $ $ $ $ $ $ $ $ $ $ $
63,305 104,505 No (4,078) (4,078) 100,427 (53,856) 46,571 46,571 (12,785) (10,043) 23,743
$ $ $ $ $ $ $ $ $ $ $ $ $ $
62,988 105,212 No (4,201) (4,201) 101,012 101,012 101,012 (31,819) (10,101) 59,092
$ $ $ $ $ $ $ $ $ $ $ $ $ $
62,673 105,947 No (4,327) (4,327) 101,620 101,620 101,620 (32,010) (10,162) 59,448
$ $ $ $ $ $ $ $ $ $ $ $ $ $
62,360 106,709 No (4,456) (4,456) 102,252 102,252 102,252 (32,209) (10,225) 59,818
$ $ $ $ $ $ $ $ $ $ $ $ $ $
62,048 107,499 Yes (4,590) (60,000) (64,590) 42,909 42,909 42,909 (13,516) (4,291) 25,102
$ $ $ $ $ $ $ $ $ $ $ $ $ $
46,580 No (4,728) (4,728) 41,852 41,852 41,852 (13,183) (4,185) 24,484
No
No
No
No
CASH FLOW STATEMENT Cash From Operations
Net Income Federal Depreciation Expense Cash Flow From Operations
(64,316) $ 187,000 $ 122,684 $
(136,968) $ 299,200 $ 162,232 $
(58,886) $ 179,520 $ 120,634 $
(11,908) $ 107,712 $ 95,804 $
(11,592) $ 107,712 $ 96,120 $
23,743 53,856 77,599
$ $ $
59,092 59,092
$ $ $
59,448 59,448
$ $ $
59,818 59,818
$ $ $
25,102 25,102
$ $ $
24,484 24,484
$ $ $
25,078 25,078
$ $ $
25,686 25,686
$ $ $
26,309 26,309
$ $ $
26,948 26,948
Cash From Investing
Installed PV Cost One Time State Solar Investment Tax Deduction (Actual Cash Value) One Time Federal Solar Investment Tax Credit Cash Flow From Investing
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
-
$ $
-
$ $
-
$ $
-
$ $
-
$ $
-
$ $
-
$ $
-
$ $
-
$ $
-
$ $
-
$ $
-
$ $
-
$ $
-
$ $
-
Cash From Financing
Loan Disbursement Loan Repayment (Principle) Cash Flow From Financing Annual Cash Flow Cumulative Cash Flow
$
-
$
-
$ $
(693,000) $ (693,000) $
122,684 $ (570,316) $
162,232 $ (408,085) $
120,634 $ (287,451) $
95,804 $ (191,646) $
96,120 $ (95,526) $
77,599 $ (17,927) $
59,092 41,165
$ $
59,448 100,613
$ $
59,818 160,430
$ $
25,102 185,532
$ $
24,484 210,015
$ $
25,078 235,093
$ $
25,686 260,779
$ $
26,309 287,089
$ $
26,948 314,036
$
$ (693,000) $ 7
1 $ (570,316) $
2 $ (408,085) $
3 $ (287,451) $
4 $ (191,646) $
5 $ (95,526) $
6 $ (17,927) $
7 41,165 7
$ $
8 100,613
$ $
9 160,430
$ $
10 185,532
$ $
11 210,015
$ $
12 235,093
$ $
13 260,779
$ $
14 287,089
$ $
15 314,036
Simple Payback
Net Investment Simple Payback Year
$ $
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Solar Photovoltaic Project Simple Financial Model DEBT SCHEDULES Scenario A Loan: Debt Schedule Beginning Balance Debt Service Principle Interest Ending Balance
Year 1
$ $ $ $ $
Year 2
Year
$ $ $ $ $
Year 3
Year
$ $ $ $ $
Year 4
Year
$ $ $ $ $
Year 5
Year
$ $ $ $ $
Year 6
-
$ $ $ $ $
Year
Year 7
Year
$ $ $ $ $
Year 8
Year
$ $ $ $ $
Year 9
Year
$ $ $ $ $
Year 10
Year
$ $ $ $ $
Year 11
Year
$ $ $ $ $
Year 12
Year
$ $ $ $ $
Year 13
Year
$ $ $ $ $
Year 14
Year
$ $ $ $ $
Year 15
Year
$ $ $ $ $
Year
Disclaimer: This Unofficial Cash Flow Model is intended to provide non-residential entities that are considering the purchase and installation of solar energy equipment with a general understanding of possible financial implications of such purchase and installation. Those entities in purchase and installation of solar energy equipment are urged to consult their own tax and financial experts. The information contained in the Unofficial Cash Flow Model may not be relied on by anyone for any purposes. Furthermore, the information contained in this model does n Resources or the Commonwealth of Massachusetts, and reference to any specific method does not constitute an implied or expressed recommendation or endorsement of it. Neither the Department of Energy Resources nor the Commonw ealth of Massachusetts make any warranties completeness, or accuracy of any processes, methods or other information contained, described, disclosed, or referred to in this model.
Finally, neither the Department of Energy Resources nor the Commonwealth of Massachusetts makes any representation that the use of any product, apparatus, process, method, or other information will not infringe privately owned property rights and assumes no liability of any kin resulting from, or occurring in connection with, the use of information contained, described, disclosed, or referred to in this Unofficial Cash Flow Model.
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9
10
11
12
13
0.00%
0.00%
0.00%
0.00%
0.00%
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Year 16
Year 17
Year 18
Year 19
Year 20
211,263
210,207
209,156
208,110
$
52,663
$
53,971
$
55,312
$
56,687
$ $ $ $ $ $ $ $ $ $ $ $ $ $
52,663 No (5,481) (5,481) 47,182 47,182 47,182 (14,862) (4,718) 27,601
$ $ $ $ $ $ $ $ $ $ $ $ $ $
53,971 No (5,645) (5,645) 48,326 48,326 48,326 (15,223) (4,833) 28,271
$ $ $ $ $ $ $ $ $ $ $ $ $ $
55,312 No (5,815) (5,815) 49,498 49,498 49,498 (15,592) (4,950) 28,956
$ $ $ $ $ $ $ $ $ $ $ $ $ $
56,687 No (5,989) (5,989) 50,698 50,698 50,698 (15,970) (5,070) 29,658
207,069
$ $ $ $
58,096
$ $ $ $ $ $ $ $ $ $ $
58,096 Yes (6,169) (60,000) (66,169) (8,073) (8,073) (8,073) 2,826 807 (4,440)
$ $ $
27,601 27,601
$ $ $
28,271 28,271
$ $ $
28,956 28,956
$ $ $
29,658 29,658
$ $ $
(4,440) (4,440)
$
-
$
-
$
-
$
-
$
-
$ $
-
$ $
-
$ $
-
$ $
-
$ $
-
$ $
27,601 341,638
$ $
28,271 369,908
$ $
28,956 398,865
$ $
29,658 428,523
$ $
(4,440) 424,082
$
16
$
17
$
18
$
19
$
20
$
341,638
$
369,908
$
398,865
$
428,523
$
424,082
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Year 16 $ $ $ $ $
Year 17 -
Year
$ $ $ $ $
Year 18 -
Year
$ $ $ $ $
Year 19 -
Year
$ $ $ $ $
Year 20 -
Year
$ $ $ $ $
Year
erested in learning more about the financial implications of the t necessarily reflect the views of the Department of Energy or representations, expressed or implied, as to the usefulness,
or nature for any loss, injury, or damage directly or indirectly
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Definitions Back
Kilowatt-hours (kWh)
Unit of energy. This is a measure of how much energy is consume much electricity is produced by a solar PV system. The amount of electric meter.
Back
Solar System
The solar photovoltaic (PV) system. This includes your panels (mo utility.
Estimated Optimal Annual Generation (kWh)
Back optimal fixed south facing free from shading location System Size
Back kilowatts (kW)
The best case scenario for how much electricity a solar PV system electricity depending on several factors. For example, a system wil roof) than if they are on an axis that tracks the sun throughout the is able to face due south, the more it should produce. Tilt angle al latitude the more it will produce. An optimal system in Massachus a tilt of 42 degrees. Kilowatts are a measure of power. A kilowatt is 1,000 watts. In thi single solar PV panel might be rated at 180 watts. If a system use be 1800 watts, or 1.8 kW.
Back
Annual Net Capacity Factor
This is a ratio between the amount of energy produced by your sol production capability. A 12.8% net capacity factor is average for s the angle of the system, its orientation, and the amount of shading. day, 24 hours per day at the optimal tilt and orientation with no sha in other words, it would produce its rated output.
Back
Annual Production Degradation
Over the course of the life of the PV system, its production capabili Our default assumption is that this degradation will be 0.5% per ye
Back
Depreciation Life
Depreciation is the reduction in the value of an asset due to usage obsolescence or other factors. Depreciation life is the "useful life" system will provide an economic benefit.
Back
Electricity Revenue (Avoided Costs)
This is the price per kWh that you will save on your electricity bill u this is a state average price for electricity.
Back
Electricity Revenue (Avoided Costs) Annual Adjustor
This model assumes that the cost of electricity will increase at 5% costs will also increase at 5% a year.
Solar Renewable Energy Certificate (SREC) Auction Price
Solar Renewable Energy Certificates (SRECs), also known as gre environmental commodities in Massachusetts which represent pro generated from an eligible renewable energy resource. These cert traded so that the owner of the SREC can claim to have purchased $.285/kWh, which is the price owners will receive for their SRECs i Account.
SREC Auction Opt-In Term
The model uses a default term of 10 years. This term is based up qualified in 2010 will receive. All projects with an Opt-In Term of 1 their Opt-In Term by depositing them in the end of year Solar Credi expected to be a measure of last resort for projects that have not si required to purchase SRECs by the end of the compliance year.
Back
Back
Back Back
SREC Revenue Annual Adjustor SREC Contract Price
This models allows the value of RECs to change by this percentag The price of SRECs as agreed upon in a bilateral contract with a c
Back
SREC Contract Term
The term of the bilateral contract with a compliance entity or other
Back
Future Inverter Replacement Cost
A solar inverter is a component of a PV system that changes the di alternating current (AC) for use with home appliances or any AC lo the life of the PV panels and will likely need to be replaced during t This model assumes the default cost to replace the inverter will be
Back
Annual Generation (kWh)
This is the estimated amount of energy that your solar PV system
Total System Cost
Total System Cost includes all elements of the installation includin etc. In the case of taxable commercial entities, the Total System C equipment
Back
d by a home or facility. It is also a measure of how energy consumption or production is measured by an ules), inverter, and meter which connects you to the
will produce. PV systems will produce more or less ll produce less energy if the panels are fixed (e.g. to a ay. Another factor is orientation. The more the system o impacts production. The closer a system's tilt is to its tts that is fixed, faces due south (180 degrees) and has
case, it describes the size of the solar PV system. A 10 panels rated at 180 watts each, the system size will r PV system and its optimimum nameplate (labeled) lar PV systems in Massachusetts. This value varies by If a solar PV system had the sun shining on it every e then that system would have a 100% capacity factor,
y will decrease as it deteriorates to a degree over time. r. , passage of time, wear and tear, technological f the system, meaning the estimated length of time the ing this solar PV system. The default is $0.18/kWh as
er year, therefore your savings from avoided electricity
n tags, Solar Renewable Energy Credits, are tradable f that 1 megawatt-hour (MWh) of electricity was ificates may have a value and they can be sold and renewable energy. Their default value is set at sold through the Solar Credit Clearinghouse Auction n the length of the Auction Opt-In Term that all projects years will be eligible to sell SRECs generated during t Clearinghouse Auction Account. The Auction is igned bilateral contracts with compliance entities that are
each year mpliance entity or other entity purchasing SRECs.
ntity purchasing SRECs. rect current (DC) electricity from the PV array into d. The life of a solar PV system's inverter is less than e lifetime of the system which can be 25 years or more. $0.75/watt. ill produce in kilowatt hours (kWh) each year. design, equipment, labor, permitting, interconnection, ost should include Massachusetts sales tax on the
