Yearly Incentives for Host in PV Third Party TPO Host/Developer

Hi,

I am wondering if it is possible to assign Production Based Incentives to the host instead of the developer in a PV Third Party TPO Host/Developer setup? If not, is there a workaround to assign a new revenue stream to the host on an annual basis instead of the developer? 

Thanks for a your time,

Henry

Hi Henry,

The Host / Developer model assumes that all project costs and revenue go to the developer, including any incentives. The purpose of the model is to help a developer determine the PPA price required to cover costs and meet IRR requirements, and to see if that PPA price would be attractive to the host compared to not installing the renewable energy system: If the PPA price is greater than the host's indifference point, then the project would be economically attractive from the host perspective. The only information about the host that the model uses is the host electricity usage and electricity rate structure.

If part of the project benefit to the host is that it will receive a production-based incentive (PBI), you could treat that as an effective reduction in the host's indifference point, which would make the project more attractive to the host at a lower PPA price.

Best regards,
Paul.