In SAM, residential and commercial projects buy and sell electricity at retail rates. They may be financed with a loan. These projects recover investment costs by selling electricity at rates established by an electricity service provider. SAM calculates metrics for these projects at the project level, assuming that a single entity develops, owns, and operates the project.

For residential and commercial projects, SAM calculates the project's levelized cost of energy, which represents the cost of installing and operating the system, including debt and tax costs, and accounting for incentives. The model also calculates the net present value of the after tax cash flow, and a payback period representing the number of years required for the cumulative after tax cash flow to cover the initial equity investment in the project.

Commercial projects may qualify for tax deductions under the Modified Accelerated Depreciation Schedule (MACRS) described in the United States tax code. SAM provides options for specifying custom depreciation schedules in addition to the MACRS mid-quarter and half-year schedules on the Depreciation page.

Residential and commercial projects are typically smaller than 500 kW, although SAM does not restrict system sizes, so it is possible to model any size system using either the residential or commercial financial model.

SAM's Electricity Rates page provides a range of options for specifying the retail electricity rate structure for a project. The rate structure may include any of the following:

  • Flat buy and sell rates (with or without net metering)
  • Time-of-use energy charges
  • Monthly demand charges (either fixed or time-of-use)
  • Tiered rates
  • Fixed monthly charges

For projects with demand charges and tiered rates, SAM requires electric load data, which is specified on the Electric Load page.