IRR Help

I am working on a commercial PPA simulation. I confused why the debt fraction affects the IRR so much. Using a fixed cost per kWh, I get the following:

Debt Fraction IRR
0% 6.4%
25% 8.8%
75% 79.08%

Is the IRR calculated only based on the down payment on the loan?

Hello,
SAM calculates the internal rate of return (IRR) based on the total project after-tax cash flow, not only on the loan.
Increasing the debt fraction has two effects on the project cash flow: It decreases the initial investment in year 0, and increases the debt costs in Years 1 and later.
The relationship between the debt fraction and IRR is also affected by any incentives you include in your analysis. In your case, if your analysis includes an investment-based incentive or tax credit, it may be that at high debt fractions, the incentive is driving up the IRR.
In any case, these relationships are complex and can be counter-intuitive.
Here are some other discussions on this forum that might help you understand what is happening with your analysis:
  Why "Debt Fraction" Limits the LCOE?
  Debt Balance and Principal Amount
For more on SAM's financial metrics, see the Help system. Here's a link relevant topic in the copy of the Help system we've posted on the website:
  SAM Help: Financial Metrics Overview
Best regards,

Paul.