PPA Rate Modeling

I am modeling a PPA rate that steps down by MWH usage. First 130,000 MWH per year gets a 7 cent/kwH rate. Any excess is 4 cent/kwH. There is a also a 2.5% escalator on each component. Can this be modeled in SAM?

SAM currently cannot model a PPA rate with MWH-based steps or tiers. You could export the hourly electrical output data from SAM to make revenue calculations outside of SAM.

SAM does model an annual PPA price escalation rate, but only for a single rate.

SAM can also model a PPA price with a set of time-of-delivery (TOD) adjustment factors -- that's not what you need here, but I did want to point out that capability.

I'll share this with the development team to consider adding as a new capability.

It would be helpful to know how common this kind of pricing arrangement is. Would anyone else be interested in this capability?

Best regards,
Paul.

These are variations that we see in Commercial Solar PPAs.
1) vector based rates. example: 9 cents per kwh for flat for 3 years, then escalating by 2% for 5 years, 2.5% there after for the remaining life of the PPA

2) Tiered Pricing PPAs: (Like example above), 130,000 MWH at 7 cents per kWh escalating at 2.5%, any excess production at 4 cents per kwh escalating at 2.5%

3) Completely custom schedule of PPA. In this case it escalates and then decreases.
eg per kwh
y1 9.5 cents
y2 10 cents
y3 10.2 cents
y4 10.6 cents
y5 10.4 cents
y6 10 cents
y7 9.8 cents
y8 ....

The best approach would be to be able to model in a custom rate vector like you have for O&M costs etc. It should be easy for the software to compute an LCOE number for the custom PPA rate vector.

Yes, I would be interested in greater PPA price/escalation customization. The different rates/escalations over time are pretty common.

Yes, in Chile one of the main clients for PV energy are mining. But usually can not have contracts for over 10 years. Then, there is the possibility of selling energy to the grid in year 11 at marginal cost or spot price.

Regards
Nesko

Thank you all for sending these suggestions for making SAM's financial models more applicable outside of the U.S. Please continue to make suggestions and we will try to implement some of them if we can get funding for that work.

Best regards,
Paul.