Utility and commercial PPA projects are assumed to sell electricity through a power purchase agreement at a fixed price with optional annual escalation and time-of-delivery (TOD) factors. For these projects, SAM calculates:
- Levelized cost of energy
- PPA price (electricity sales price)
- Internal rate of return
- Net present value
- Debt fraction or debt service coverage ratio
SAM can either calculate the internal rate of return based on a power price you specify, or calculate the power price based on the rate of return you specify.
We have prepared these spreadsheets as tools to help you understand how SAM's financial models for PPA projects work.