Financial Model Documentation

SAM uses cash flow models to calculate the levelized cost of energy, net present value, payback period, and other financial metrics. When you create a case in SAM, you choose a financial model from eight options: Residential, commercial, commercial PPA, utility IPP, single owner, leveraged partnership flip, all equity partnership flip, or sale leaseback. The financial models are described in SAM's Help system.

The equations SAM uses to calculate the financial metrics are based on the definitions and methods described in the following handbook:

  • Short, W., Packey, D., Holt, T. (1995) A Manual for the Economic Evaluation of Energy Efficiency and Renewable Energy Technologies. National Renewable Energy Laboratory. NREL/TP-462-5173. (PDF 6.6 MB)

SAM's financial models for utility-scale power purchase agreement (PPA) projects are described in the following report:

  • Mendelsohn, M.; Kreycik, C.; Bird, L.; Schwabe, P.; Cory, K. (2012) The Impact of Financial Structure on the Cost of Solar Energy. National Renewable Energy Laboratory. NREL/TP-6A20-53086. (PDF 894 KB)

Spreadsheets

We have prepared these spreadsheets as tools to help you understand how SAM's financial models calculate the different metrics on the Results page.

LCOE and NPV Calculations Using Excel Formulas

These workbooks show how SAM calculates the levelized cost of energy (LCOE) and net present value (NPV) for all of the financial models. You can cut and paste the base case cash flow table from your SAM cases into the second worksheet (with the label "Cash Flow") of each workbook to verify the values in your analyses.

Payback Period Calculation for Residential and Commercial

The following spreadsheets show how SAM calculates the payback period for the Residential and Commercial financing options. You can copy and paste the cash flow from SAM's Results page into the second worksheet and see the results on the first worksheet.

Spreadsheet Versions of SAM's Residential and Commercial Financial Models

The following workbooks replicate four of SAM's financial models using Excel formulas.

Note that in SAM, for the residential financing option, you choose the Standard Loan or Mortgage loan type on the Financing page.

Spreadsheet Versions of SAM's Single Owner, Partnership Flip, Leveraged Partnership Flip and Sale Leaseback Financial Models

The following workbook contains spreadsheet versions of SAM's four cash flow models for power purchase agreement projects. The nomenclature is consistent with SAM 2014.1.14. The spreadsheets are intended to supplement the models' documentation in SAM's Help system.

Financial Data

NREL uses several resources to collect default financial information. One of them is the Renewable Energy Finance Tracking Initiative (REFTI). This data is the result of a periodic survey of the financial community.

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