Developer overhead vs. development fee

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Peter
Topic Author

19 Apr 2024 21:29 #13108 by Peter

Developer overhead vs. development fee was created by Peter

First, thank you for the great tool!
I'm new to PV financial modeling. I built a mock utility-scale PV project in my region in order to understand how a project pencils out financially.
The NPV was way in the red so I'm examining the assumptions to determine the cause is.

I noticed that there is a developer overhead of 2% (listed as 'Engineering + developer overhead) in the indirect costs, but also a 3% development fee in the Financial Parameters section. Are both of these costs typically relevant? If so, then how are they different?

I'm in New York state, so if someone has more specific numbers for these costs, that would help as well.

Thanks

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Paul Gilman

22 Apr 2024 17:09 #13118 by Paul Gilman

Replied by Paul Gilman on topic Developer overhead vs. development fee

Hi Peter,

The development fee on the Financial Parameters page for the partnership financial models is intended to represent a fee that is part of the negotiation between partners and is a profit to the developer. The engineering and developer overhead costs on the Installation Costs page is intended to represent costs associated with project development.

These costs are project-specific and may be defined differently for different projects.

The default values in SAM are likely out of date, but are a reasonable starting point.

Best regards,
Paul.

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