Financial Model Suggestions

  • Paul Gilman
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04 Jun 2020 23:14 - 05 Jun 2020 21:51 #8281 by Paul Gilman
Financial Model Suggestions was created by Paul Gilman
Hello everyone,

NREL is developing a work plan for a project to improve SAM's financial modeling capabilities. This work could include modifying existing models, adding new ones, or both. For a description of SAM's current financial models, see:

sam.nrel.gov/financial-models

We are already working on improvements to SAM's electricity bill calculator for behind-the-meter projects, and we do have some ideas for financial model fixes and enhancements , but would love to hear your suggestions. Is there a financial structure you would like to model in SAM that is not available in the latest version? Are there financial model inputs or results you would like us to add? Please let us know by posting a response to this post.

Thanks!
Paul and the SAM team.

p.s. We would prefer that you post your suggestion to the forum so other people can comment and respond, but if you'd prefer to make a This email address is being protected from spambots. You need JavaScript enabled to view it., please do.
Last edit: 05 Jun 2020 21:51 by Paul Gilman.

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  • schmidly
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08 Jun 2020 18:37 #8288 by schmidly
Replied by schmidly on topic Financial Model Suggestions
Thanks for creating this forum.  It's very timely.   Yes, I'd like to see a third party ownership model (host/developer) that includes an Energy-as-a-Service (EaaS) and Microgrid-as-a-Service (MaaS) financial model. I'd like to be able to choose what % of the total savings from the CAPEX investment to share with the host including a buy-down option for them, and then show the returns for both the host and the developer.   You can run this type of analysis right now, but it takes modifying the exported spreadsheet.  It'd be nice to run it within the SAM environment.  

And finally, it would also be great if we could run a solar+BESS+fuel cell resiliency/savings analysis of the same type within the SAM environment.  Thanks, Brian  

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  • kaiyer
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12 Jun 2020 16:50 - 15 Jun 2020 17:51 #8301 by kaiyer
Replied by kaiyer on topic Financial Model Suggestions
PPA Models:
==========

1) It would be good to have the PPA solver to solve for a multiple of the vector PPA input (provided by user in SAM)  to reach an IRR target. - Currently SAM solves for a single PPA rate

2) A schedule of customer buyout values (in $) for PPA's based on owner holding period return (input as a period 0 to buyout year IRR for each time period). At a minimum good to have these for buyout in years 6,10, 15, 20, 25 and term of PPA.

As an example:
SAM Inputs
SAM Output
Buyout Period Holding Period
67calculated output
107.5calculated output
This provides offtaker of PPA's a quick way to evaluate PPA offers including buyout values provided on the standard SEIA PPA form.

3) Solver to solve "Total Losses" in System Design in  PVWatts to solve for a user input  Energy Yield (kWh/kW) (override PVWatts estimate)
Last edit: 15 Jun 2020 17:51 by Paul Gilman.

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  • Paul Gilman
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15 Jun 2020 17:38 - 15 Jun 2020 17:40 #8302 by Paul Gilman
Replied by Paul Gilman on topic Financial Model Suggestions
Hi Brian,

Thank you for those suggestions. Would you be willing to share a copy of your modified spreadsheet with us? If you'd prefer not to share it on the forum, please This email address is being protected from spambots. You need JavaScript enabled to view it. instead.

Best regards,
Paul.
Last edit: 15 Jun 2020 17:40 by Paul Gilman.

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15 Jun 2020 17:53 #8303 by Paul Gilman
Replied by Paul Gilman on topic Financial Model Suggestions
Hi Kaiyer,

Thank you for the suggestions! I made a few formatting changes to your message to make it easier to read.

By "standard SEIA PPA form", to you mean of the documents posted here on the SEIA website?

https://www.seia.org/research-resources/model-leases-and-ppas

Best regards,
Paul.

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  • Paul Gilman
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25 Jun 2020 17:24 - 06 Jul 2020 22:15 #8356 by Paul Gilman
Replied by Paul Gilman on topic Financial Model Suggestions
One of the main limitations in using SAM to model power plants in another country is that we use a Value Added Tax scheme instead of a Sales Tax. This tax applies to the investment costs as well as to the revenues, while the sales tax only applies to the investment cost.

I have no problem applying the VAT to the Investments part, since I can input it as a sales tax. On the other hand, I'm having problems applying it to the Total Revenue part. I have already searched for a solution but found none which would solve the issue correctly. If there is already an available way to work around this issue I would thank you if you could let me know.

Having said this, my suggestion/request would be to implement a way to decide whether to use Sales Tax or Value Added Tax, since this would improve the model applicability in many other countries.

Here is a suggested workaround to model the 16% VAT in Mexico:

  1. Add a sales tax of 16% to match the 16% Value Added Tax. This inserts the VAT to the cash flow.
  2. Set the total depreciation basis to 86.2% to remove the VAT from the depreciation basis, since the VAT does not depreciate in the long term, as required by law. (Will probably differ from country to country)
  3. Add a IBI of 16%. Since the 16% VAT tax you paid is going to be in your favor when total taxes are calculated. (Will also probably differ from country to country)
  4. Add a State tax of 13.8%. Since the cash flows now have the VAT added to them, this will correspond to the VAT that will need to be paid.
Last edit: 06 Jul 2020 22:15 by Paul Gilman.

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