Developer Metrics NaN and Host Metrics Negative

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Michael Caballero
Topic Author

14 Mar 2024 17:45 #12984 by Michael Caballero

Developer Metrics NaN and Host Metrics Negative was created by Michael Caballero

Hi Paul

I'm trying to create a solar plus storage microgrid that can handle a yearly power generation of 3.7 MW. After inputting the system parameters and simulating I'm receiving notes that the rate of return in NaN and the host revenue is negative:

IRR at end of analysis period is not a number (NaN). This can indicate that revenues are too low to cover costs, or that they are excessively high compared to costs.
IRR in target year is not a number (NaN). This can indicate that revenues are too low to cover costs, or that they are excessively high compared to costs.
Debt percent is 125.944. A debt percent greater than 100% may indicate that revenues are higher than necessary to cover project costs.

From the simulation I believe the nominal rate of the systems electricity is lower than the GSD rate I entered (though I'm still getting the hang of understanding the outputs) so I'm wondering if I made a mistake or if the size/cost of the system is just too big to be financially beneficial. I've attached the SAM file.

Thank so much for your help!

Best,
Michael

AAR Case 1.sam

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Paul Gilman

15 Mar 2024 17:08 #12987 by Paul Gilman

Replied by Paul Gilman on topic Developer Metrics NaN and Host Metrics Negative

Hi Michael,

There are a couple of of metrics indicating that the project is not economically feasible given your assumptions:

Developer IRR = NaN
Debt percent > 100%
Host NPV < 0

You can explore the cash flow details on the Cash Flow tab to better understand what the financial model is doing.

I would review the inputs on the Financial Parameters page to see if they are what you expect.

Discount rate represents value of alternative investment and is used to calculate the NPV.
DSCR (debt service coverage ratio) -- this value is typically one required by the loan provider. The DSCR option automatically sizes debt based on revenue available for debt service. If you aren't sure about DSCR, you can use the debt percent option to size the debt as a percentage of the total installed cost.

The following assumptions add cost to the project:

Debt closing cost, up-front fee, and construction financing cost are in addition to the total installed to calculate the total capital cost.
Reserve accounts are funded and disbursed throughout the analysis period.

Best regards,
Paul.

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Michael Caballero
Topic Author

15 Mar 2024 19:33 #12988 by Michael Caballero

Replied by Michael Caballero on topic Developer Metrics NaN and Host Metrics Negative

Hi Paul,

I changed the project term to debt percent and reduce the fed income tax from default and was able to get results with real values.
The goal of the study is to create a system that reduces grid energy utilization so the financials are secondary but I still wanted to get cost metrics and a reasonable LCOE per kWh to compare to the rates from the grid so this has helped.

Thanks!
Michael

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