Detailed Financial Model

I am using SAM for an internship so I'm still learning how to use some parts of the program. I've been using Helioscope to design and layout solar PV projects and SAM to create financial models for the projects, particularly the cash flows over time, as a detailed PV model with my firm acting as a third party, host-developer. However, after running the simulations and viewing the report, both the host and developer after-tax cash flows show the cost of the project in year zero as negative because SAM assumes that my firm is paying for the project, instead of the client paying for the cost of the project. This alters the cash flow projections and changes the length of time it will take for the system to pay for itself. How do I correct this problem on the report so that my firm does not cover the cost of construction. 

Hi Matthew,

Please see the Financial Parameters, Third Party Host / Developer topic in SAM's Help system. It describes the way the model works, which I think explains why the cash flows look as they do:

The Third Party Ownership - Host / Developer model calculates financial metrics a renewable energy system installed on a residential or commercial property. The property owner, or host, makes an agreement with a third party, or developer, who installs, operates, and owns the system. The system reduces the host's electricity bill, and the host makes payments to the developer for the power generated by the system at a fixed rate negotiated through a power purchase agreement or PPA.

Best regards,
Paul.

Thank you, Paul Gilman. This is helpful; I will focus on using the power purchase agreement to reduce the initial price of the system to the lowest possible cost in year zero, but the company that I'm working with makes an arrangement in which the client pays the full cost of the system up front (similar to a roof installation or any other type of commercial addition) and we receive the SRECs from the panels which we then sell, while they receive the electricity and the energy savings. Is there a way for me to I set up the TPO host-developer model so that the entire cost is already paid for in year zero, besides adjusting the PPA payments? 

Hi Matthew,

You should be able to do that by setting the installation cost on the System Costs page to zero, and accounting for the SRECs on the Incentives page.

However, if you use this approach, because the host indifference point does not account for the host's up-front-payment, it will not be a useful indication of whether the project is economically feasible from the host's perspective.

Best regards,
Paul.