PPA Price

Hello - I notice that when I simulate my model for Utility-scale wind, the PPA price changes from one region to another and was wondering why it does this? For example, when I import weather data for Green Bay, WI it will spit out a PPA price that I didn't specify and then if I run another model with different weather data (but in a very similar area) the PPA changes drastically. Does anyone know what is happening here?

Hello,

By default, SAM's Single Owner financial model is in the "Specify IRR target" mode, which you can see on the Financial Parameters input page under "Solution Mode." In this mode, you specify a desired IRR (internal rate of return) target that you would like to achieve, and the project year you would like that target to be achieved, and SAM adjusts the PPA price to try to meet the target. When you change the weather file, you change the total annual output of the wind farm, which changes the annual revenue in the project cash flow and causes the PPA price to change.

If you want to run the model with a fixed PPA price so that the IRR changes with different annual output values, on the Financial Parameters input page, change the solution mode to "Specify PPA price." In that mode, the PPA price is fixed, and when you change the weather file, the IRR will change instead of the PPA price.

Best regards,
Paul.