Federal ITC Values

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msohebzaidi
Topic Author

06 Dec 2021 04:48 #10341 by msohebzaidi

Federal ITC Values was created by msohebzaidi

Hello Team,

I just wanted to check if there is a way in SAM financial modelling, where can alter the Federal incentives and not enter it as a fixed value?
As we know in the US, the Federal ITC are going to reduce for solar by 2020, therefore I was willing to check if I could take that reduction into account which will occur in the next 2 years of my financial analysis in SAM.
The problem here is, not taking into account the reduction in ITC can lead to incorrect NPV and Cash flow calculation for the life time of the project if simulated before 2022.
Could you please suggest alternatives or solution to this problem.

Thanks in advance.

Soheb

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pgilman

07 Dec 2021 00:31 #10344 by pgilman

Replied by pgilman on topic Federal ITC Values

Hi Soheb,

SAM applies the Federal ITC to Year 1 of the project cash flow (the first year the project earns revenue).

If you are modeling a project that will go into service after the ITC changes, you should use the value of the ITC that will be in effect when the project starts.

That also goes for project installation costs, and other cost and financial inputs. The values you use should be appropriate for the year the project will be installed.

Best regards,
Paul.

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msohebzaidi
Topic Author

07 Dec 2021 04:18 #10348 by msohebzaidi

Replied by msohebzaidi on topic Federal ITC Values

Thanks for the Quick Reply Paul. This makes sense.

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