Community Solar Model - Double Counting Year Zero Benefits?

I am trying to understand how IBIs and CBIs are being used to calculate the "Issuance of Equity" and "Pre-Tax Cash Flow" values/schedules and unless I am misunderstanding, I think IBIs and CBIs are being double counted.

For example, in the image below, the Total Capital Costs (YELLOW) is ~$10M. The Total CBI (GREEN) is $4,265,600. The model is assuming that the CBI is being received early enough such that it can reduce the Issuance of Equity (BLUE) which makes sense. What I am struggling to understand is why the Total CBI is also being included in the Pre-Tax Cash Flow (PINK). If the CBI is being use as a CAPEX Source, I don't think it makes sense to also include it in the Equity Return (Pre-Tax Cash Flow) since the Equity provider is not receiving that value. That value is instead, as mentioned earlier, being used towards for CAPEX year 0.

I appreciate any guidance or explanation.

 

Hi Trevor,

The IBI and CBI appear in both the "Investing Activities" and "Financing Activities" to record their effect on those parts of the project cash flow. Under Investing Activities, the incentives are subtracted from the total installed and other initial costs to calculate the purchase of property. Under Financing Activities, the incentives are added to the issuance of equity. Because the pre-tax cash flow is the sum of operating, investing, and financing activity cash flows, the net effect is that these incentives are a benefit in Year zero of the pre-tax cash flow.

Best regards,
Paul.