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)
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 Calculations Using Excel Formulas
These workbooks show how SAM calculates the levelized cost of energy (LCOE) for all of the financial models.
- Residential and Commercial (Excel 26 KB)
- Single Owner, Partnership Flip, Sale Leaseback (Excel 35 KB)
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, Commercial, and Single Owner Financial Models
For the Residential, Commercial, and Single Owner financial models, if you are using a Windows version of SAM, you can create an Excel version of the model by clicking Send-to Excel with equations from the Cash Flow tab on the Results page. The following are examples of the workbooks generated in this way that you can use for reference if you are running a macOS or Linux version of SAM:
Spreadsheet Versions of SAM's Single Owner, Partnership Flip, Leveraged Partnership Flip and Sale Leaseback Financial Models
- PPA Financial Models (Excel 1.0 MB)