SAM Financial Model Inputs

Why is system output for year 1 shown as 100% or maybe a better question is How do I adjust the model so that year 1 output is either zero - during construction for larger projects or at a percentage that I input for smaller projects that may finish inside of the first year.

SAM assumes that the project begins operation in Year 1: The system starts generating electricity on January 1, and the project sells electricity and pays operating costs tarting in that year. The PPA financial models (Utility IPP, Single Owner, etc.) have a set of inputs on the Financing page to model construction financing costs. You can specify a construction period there for up to five construction loans. SAM calculates the construction financing cost and adds it to the project cost in Year 1. I think you should use hose inputs to account for your pre-commissioning costs.

That said, It is possible to adjust the system output on a year-by-year basis using the "Percent of annual output" variable on the Performance Adjustment page. Click the blue and grey button next to the variable, click Edit, and in the table of values enter a percentage for each year. If you enter a zero in the first row and 100% in the remaining rows, SAM will model the year 1 output as zero kWh. (See help topic for the Performance Adjustment page for more instructions on working with the annual schedule of values.)

This approach may result in a cash flow that works for your anlaysis, but will affect other metrics that SAM reports such as capacity factor and others that are Year 1 values.

Best regards,
Paul.

Thanks for the answer Paul. Perfect segue .... What are the terms for those "short term" construction loans - length of the loan?

Wouldn't the project costs be 90% construction costs? The reason that I ask that is that when I enter the financing data for modeling, I am assuming that the funds (in the appropriate draw down schedule) are available day 1 of year 1 for the construction of the project. I'm now curious as to what the SAM assumptions are. Is the construction period considered year 0 (as per output of SAM)? What does the debt fraction loan term and interest inputs apply to then, if not for the construction and commissioning of the project?

SAM assumes that the construction period is before year 1, and that construction financing is paid off in Year 0. You specify the construction loan period using the "Months Prior to Operation" input along with the construction loan interest rate and upfront fee. By default, SAM assumes that the construction loan is for 100% of the total installed cost, but you can change that to 90% or any other value.

To calculate the Year 0 project cost (the negative value in Year 0 of the project cash flow), SAM adds the total construction interest amount to product of the debt fraction (from the Financing page) and total installed cost (from the System Costs page). The loan parameters on the Financing page (debt fraction, loan term, loan rate) are for project debt that is repaid over the course of the project's lifetime.

In other words, the construction loan interest cost is rolled into the project Year 0 cost.

Best regards,
Paul.