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System Advisor Model (SAM)

State and Local Modules

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rhodojoycey
Topic Author

01 Apr 2021 17:03 #9416 by rhodojoycey

State and Local Modules was created by rhodojoycey

Hello NREL,

I am a municipal employee who is learning to use SAM to help our Town evaluate solar PV opportunities and proposals on municipal lands and buildings. I am interested in learning whether there are plans to develop financial modules that incorporate unique state incentives and local government's ability to levy escalating or non-escalating PILOT rates, as well as to borrow capital.

From a municipality perspective, it would be helpful to improve SAM's "Third Party Owner with Host" functionality to simulate and project the host's revenue and savings. The revenue would come from using a PILOT on any PPA arrangements, or on lease payments. Hosts would also want to look at long terms projected savings if the PPA price is lower than current utility rates.

Relatedly, municipal officials would also be interested in having a default PVWatts> Distributed > Municipal Owner setting that eliminated federal and state taxes and depreciation modules that would not apply to municipal governments, but added current average municipal bond interest rates local to the state or region for debt-financing.

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pgilman

05 Apr 2021 22:27 #9431 by pgilman

Replied by pgilman on topic State and Local Modules

Hi Joyce,

SAM's financial models should be flexible enough to model these types of projects:

To remove income tax and depreciation from the project, set the state and Federal income tax rates to zero.
Set debt interest rates to the appropriate bond rate.

SAM's Third Party - Host / Developer model is from the developer's perspective, and is useful for the developer to evaluate whether they can earn a suitable return on a PPA that costs less than the hosts electricity costs given a host's load and electricity rates.

The Third Party - Host model is from the host's perspective to help the Host evaluate whether a lease agreement or PPA is more cost effective. You can model the same project using each Third Party Ownership model to explore the different perspectives.

It might be helpful to create an example file using this approach to see what the limitations are to give us better insight into how to design a new financial model. Have you created any files that you would be willing to share for us to use for that purpose?

Best regards,
Paul.

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