Negative NPV in PPA

Dear Paul,

Thanks for your reply!

Then for the single owner PPA financial model, why there is no payback period?

Best regards, 
Weng Pin.

Hi Weng Pin,

SAM does not calculate a payback period for the PPA financial models, including Single Owner. The reason is similar to my explanation above for the Third Party - Host / Developer model.

For the PPA financial models, the project earns revenue to cover project investment and operating costs and meet an internal rate of return (profit) requirement. For those models, the net present value (NPV), internal rate of return (IRR), power price (PPA price) provide information about whether the project is financially viable.

For the residential and commercial financial models, the system owner makes an initial investment that is recuperated by electricity bill savings, so the idea of a payback period makes more sense. 

Best regards,
Paul.