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.
The following YouTube playlist is for a video presentation of the PPA financial models when they were first added to SAM in 2013 as "Advanced Utility IPP Options." These were available in addition to SAM's original "Utility Independent Power Producer (IPP)" financial model. In 2015, we renamed the "Advanced" models to "Power Purchase Agreement (PPA)," and removed the original IPP model because the PPA Single Owner model has a better representation of project debt and an option for an IRR target year different from the analysis period that was not available for the "IPP" model. The descriptions in these videos are stilll relevant, but the SAM user interface design, model names, and mention of the old IPP model have changed in versions of SAM newer than SAM 2015.1.30.
- PPA Financial Model Presentation on YouTube
- Presentation slides (PDF 2.3 MB)
These sample spreadsheets are intended to help you understand how SAM's PPA financial models calculate financial metrics such as net present value (NPV), levelized cost of energy (LCOE), and internal rate of return (IRR).
The following Excel files were generated in SAM 2020.2.29 by clicking Send to Excel with equations from the Cash Flow tab on the Results page for the default PV case for each PPA financial model. They replicate SAM's calculations with Excel formulas using inputs from the SAM files. You can generate similar workbooks yourself from the Windows version SAM, or use these sample workbooks if you are using the Mac or Linux version of SAM, or not using SAM at all.
- PPA Single Owner cash flow model (XLSX 265 KB)
- PPA Leveraged Partnership Flip cash flow model (XLSX 278 KB)
- PPA All Equity Partnership Flip cash flow model (XLSX 273 KB)
- PPA Sale Leaseback cash flow model (XLSX 272 KB)
The following workbook is the original template that was used to develop SAM's PPA fianancial models. Some of the calculations in SAM have been updated since this 2011 workbook, but we have included it here in case it is useful as a historical reference.
- Original historical Excel template from 2011 for PPA Single Owner, Partnership Flip, and Sale Leaseback models (Excel 1.0 MB)