I have a system fully done up, but am getting weird values from the loan parameter. If there is 0 debt (No loan - 100% up front payment), the system shows an NPV of ~$16,000 which seems fine. But when I put in any value of debt, (lets say 100% @ 4% interest over 15 years), the NPV goes UP. This shouldn't be the case since income is the same, but we are paying more expenses (interest). Where is my error, or what am I missing??
For the Commercial financial model, SAM assumes that debt interest payments are tax deductible for both State and Federal tax purposes, so altough the scenario with debt has a higher annual debt payment cost, it also has lower tax liability. The model also only considers the value of electricity savings as income. The annual after-tax cash flow graph on the Summary tab of the results page will show a net negative cash flow (income) for the debt period because of the tax savings. You can explore tha cash flow in more detail on the Cash Flow tab.
