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SAM Solar Model Recommends a Very Small System
14 Oct 2019 15:41 #7715
by Sara Mason
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14 Oct 2019 18:19 - 14 Oct 2019 18:19 #7720
by Paul Gilman
Replied by Paul Gilman on topic SAM Solar Model Recommends a Very Small System
Hi Sara,
In your analysis, the cash flow is determined by the value of electricity savings and project costs. Project costs consist of debt payments, operation and maintenance expenses, and annual insurance payments. Project costs increase with the system size. There are no taxes or incentives. The monthly load is much higher than the system's total monthly electricity production for the range of system sizes you are considering, so there are no net metering credits. The monthly electricity bill savings come from a reduction in energy charge and demand charges, which both vary with system size. There is a fixed $585.29 charge that does not vary with system size, but is much smaller than the total bill.
The following graph shows the annual-after tax cash flow for three system sizes from your .sam file. The net present value is calculated from the after-tax cash flow, so the graph gives a visual representation of the NPV. The 900 kW system has lower costs than the larger systems in the first 10 years, but then has lower savings in the later years. The 1800 kW system has higher savings in the later years, but higher costs in the earlier years. The balance of these costs and savings for the 1500 kW system results in the lowest NPV given the inflation and discount rates you assumed for your analysis.
Best regards,
Paul.
In your analysis, the cash flow is determined by the value of electricity savings and project costs. Project costs consist of debt payments, operation and maintenance expenses, and annual insurance payments. Project costs increase with the system size. There are no taxes or incentives. The monthly load is much higher than the system's total monthly electricity production for the range of system sizes you are considering, so there are no net metering credits. The monthly electricity bill savings come from a reduction in energy charge and demand charges, which both vary with system size. There is a fixed $585.29 charge that does not vary with system size, but is much smaller than the total bill.
The following graph shows the annual-after tax cash flow for three system sizes from your .sam file. The net present value is calculated from the after-tax cash flow, so the graph gives a visual representation of the NPV. The 900 kW system has lower costs than the larger systems in the first 10 years, but then has lower savings in the later years. The 1800 kW system has higher savings in the later years, but higher costs in the earlier years. The balance of these costs and savings for the 1500 kW system results in the lowest NPV given the inflation and discount rates you assumed for your analysis.
Best regards,
Paul.
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