# Solar Energy Investment Calculation - Excel

Document Sample

```					Commonwealth Commercial Solar Photovoltaic Calculator (posted 4/06/09)
Commonwealth Solar Rebate Program 2008 Version 3.0

Commercial: Commonwealth Solar Rebate Matrix (\$/watt dc)
Incremental Capacity                   1 to 25 kW          > 25 to 100 kW > 100 kW to 200      > 200 kW to 500
(1,000 to 25,000 watts)                      kW                   kW
Base Incentive (\$/watt dc)                                     \$3.15             \$3.00               \$2.00             \$1.40
MA-Manufactured Components                                     \$0.15             \$0.15               \$0.15             \$0.15
Public Building Adder                                          \$1.00             \$1.00               \$1.00             \$1.00

Commercial: Commonwealth Solar Rebate Calculator

Total PV Project Size (watts dc)                                   25,000     Click here for Financial Model
Total PV Project Size for Rebate Calculation (500 kW cap)          25,000
MA-manufactured components                                        yes NO
Rebate (\$)                                                    \$82,500.00
Rebate (\$/watt dc) based on total project size            \$     3.30000

Key
Entry Cells
Calculation Cells (not for Entry)
Commercial Solar Photovoltaic Project Simple Financial Model (posted 4/06/09)
Commonwealth Solar Rebate Program 2008 Version 3.0
DATA ENTRY AND FINANCIAL SUMMARY
Key                                                                                                                                  Scenario Definitions
Entry Cells                                                                                                                        Scenario A: Non-Taxable Rebate - Assumes that the state rebate is non-taxable, but is subtracted from the cost basis for purposes of determining tax credits and accelerated depreciation.
Cells Draw Data from Another Worksheet
Calculation Cells (Not for Entry)                                                                                                  Scenario B: Taxable Rebate - Assumes that the state rebate is taxable, but is not subtracted from the cost basis for purposes of determining tax credits and accelerated depreciation.
Both Scenarios assume that the project owner can use both federal and state tax benefits
Select Taxable or Non-Taxable Entity                        Taxable             Taxable                                                                                                                      1              2               3              4            5       6          7             8             9              10      11      12       13
Non-Taxable                                          Tax Assumptions
Project and Customer Cost Assumptions                                                                                                    Federal Tax Rate                                                35%
Solar Photovoltaic System Size                                  25,000 Watts (DC STC)                                              State Tax Rate                                                  10%
Total System Cost/Watt                                \$          6.168 \$/Watt (DC STC)                                             Effective Tax Rate                                              42%
Total System Cost                                     \$   154,200.00                                                               Federal Tax Credit                                              30%
State Tax Deduction                                            100%
MTC Rebate Assumptions                                                                                                                   5 Year Accelerated Depreciation Schedule (MACRS)             60.00%         16.00%           9.60%           5.76%         5.76%   2.88%
Rebate\$ per/Watt                                      \$          3.300 \$/Watt (DC STC)                                             Depreciation                                                 60.00%         16.00%           9.60%           5.76%         5.76%   2.88%      0.00%         0.00%         0.00%          0.00%    0.00%   0.00%   0.00%
Total Rebate                                          \$         82,500                                                                 Asset Basis
Gross Cost                                     \$   154,200
Rebate                                         \$       -
Less 50% of Federal Tax Credit                 \$   (23,130)
Project Performance and Savings/ Cost Assumptions
Annual Net Capacity Factor                                       14.0% kW (DC STC) to kWh AC                                           Asset Basis                                         \$   131,070
Annual Production Degradation                                    0.50% %                                                       Financing Assumptions
Project Life                                                         25   Years                                                    % Financed w/ Cash                                             100%           Cash
Depreciation Life                                                    20   Years                                                    % Financed w/ Loan                                                0%
Electricity Revenue (Avoided Costs)                   \$           0.15    \$/kWh                                                    Loan Interest Rate                                            9.00%           Loan
Electricity Revenue (Avoided Costs) Annual Adjustor               3.0%    %                                                        Loan Period                                                        20 Years (must be equal to or less than project life)
Renewable Energy Certificate (REC) Revenue            \$           0.04    \$/kWh                                                    Net Cost                                                \$    71,700
REC Revenue Annual Adjustor                                       0.0%    %                                                        Loan                                                    \$       -
REC Revenue Term                                                      5   Years (must be equal to or less than project life)       Customer Discount Rate                                        3.00%
Annual Operations and Maintenance Cost Factor         \$          17.59    \$/kW/Year
Annual Operations and Maintenance Cost                \$            440    \$/Year
Annual Operations and Maintenance Adjustor                        3.0%    %                                                    Solar Project Financial Analysis Summary
Future Inverter Replacement Cost                      \$           0.71    \$/Watt (DC STC)                                          Net Present Value                                       \$    40,130
Inverter Life, Replace Every X Years                                 10   Year (must be equal to or less than project life)        Simple Payback (100% Cash only)                               Year 3
Estimated Return on Equity                                    18.5%
Scenario A: Guess Return on Equity                          10%

Disclaimer: This Unofficial Cash Flow Model is intended to provide non-residential entities that are considering the purchase and installation of solar energy equipment with a general
understanding of possible financial implications of such purchase and installation. Those entities interested in learning more about the financial implications of the purchase and installation of
solar energy equipment are urged to consult their own tax and financial experts. The information contained in the Unofficial Cash Flow Model may not be relied on by anyone for any purposes.
Furthermore, the information contained in this model does not necessarily reflect the views of the Massachusetts Technology Collaborative or the Commonwealth of Massachusetts, and
reference to any specific method does not constitute an implied or expressed recommendation or endorsement of it. Neither the Massachusetts Technology Collaborative nor the Commonwealth
of Massachusetts make any warranties or representations, expressed or implied, as to the usefulness, completeness, or accuracy of any processes, methods or other information contained,
described, disclosed, or referred to in this model. Finally, neither the
Massachusetts Technology Collaborative nor the Commonwealth of Massachusetts makes any representation that the use of any product, apparatus, process, method, or other
information will not infringe privately owned property rights and assumes no liability of any kind or nature for any loss, injury, or damage directly or indirectly resulting from, or
occurring in connection with, the use of information contained, described, disclosed, or referred to in this Unofficial Cash Flow Model.

Commercial Solar Photovoltaic Project Simple Financial Model (posted 4/06/09)
PRO FORMA AND PRODUCTION
Start-Up           Year                 Year                 Year                 Year               Year                Year               Year               Year               Year               Year                Year                Year                Year                Year                Year                Year                Year                Year                Year                Year
Project Output                                                                      0                1                    2                    3                    4                  5                   6                  7                  8                  9                  10                  11                  12                  13                  14                  15                  16                  17                  18                  19                  20
Annual Generation (kWh)                                                                                  30,660               30,507               30,354           30,202             30,051              29,901             29,752             29,603             29,455             29,308              29,161              29,015              28,870              28,726              28,582              28,439              28,297              28,156              28,015              27,875

FINANCIAL SCHEDULES
INCOME STATEMENT
Electricity Revenue (Avoided Cost)                                                          \$          4,599     \$          4,713     \$          4,830     \$     4,950        \$     5,073        \$      5,200        \$     5,329        \$     5,461        \$     5,597        \$     5,736         \$     5,878         \$     6,025         \$     6,174         \$     6,328         \$     6,485         \$     6,646         \$     6,811         \$     6,981         \$     7,154         \$     7,332
MTC Rebate                                                               \$        82,500
REC Revenue                                                                                 \$          1,226     \$          1,220     \$          1,214     \$    1,208         \$    1,202         \$       -           \$       -          \$      -           \$      -           \$       -           \$      -            \$      -            \$      -            \$      -            \$      -            \$      -            \$      -            \$      -            \$      -            \$       -
Total Revenue (Avoided Costs)                      \$       82,500     \$          5,825     \$          5,934     \$          6,045     \$    6,159         \$    6,276         \$     5,200         \$     5,329        \$    5,461         \$    5,597         \$     5,736         \$    5,878          \$    6,025          \$    6,174          \$    6,328          \$    6,485          \$    6,646          \$    6,811          \$    6,981          \$    7,154          \$     7,332
Replace Inverter?                                                                  No               No                   No                   No                   No                 No                  No                 No                 No                 No                 Yes                 No                  No                  No                  No                  No                  No                  No                  No                  No                  Yes
Operations & Maintenance Costs                                                            \$          (440)       \$        (453)       \$        (467)       \$     (481)        \$     (495)        \$      (510)        \$      (525)       \$     (541)        \$     (557)        \$      (574)        \$     (591)         \$     (609)         \$     (627)         \$     (646)         \$     (665)         \$     (685)         \$     (706)         \$     (727)         \$     (749)         \$      (771)
Inverter Replacement Cost                                                                 \$           -          \$         -          \$         -          \$      -           \$      -           \$       -           \$       -          \$      -           \$      -           \$   (17,750)        \$      -            \$      -            \$      -            \$      -            \$      -            \$      -            \$      -            \$      -            \$      -            \$   (17,750)
Total Operating Expenses                     \$           -    \$          (440)       \$        (453)       \$        (467)       \$     (481)        \$     (495)        \$      (510)        \$      (525)       \$     (541)        \$     (557)        \$   (18,324)        \$     (591)         \$     (609)         \$     (627)         \$     (646)         \$     (665)         \$     (685)         \$     (706)         \$     (727)         \$     (749)         \$   (18,521)
EBITDA                      \$        82,500  \$         5,386        \$       5,481        \$       5,578        \$    5,678         \$    5,781         \$     4,690         \$     4,804        \$    4,920         \$    5,040         \$   (12,588)        \$    5,288          \$    5,416          \$    5,547          \$    5,682          \$    5,820          \$    5,961          \$    6,106          \$    6,254          \$    6,405          \$   (11,189)
Federal Depreciation Expense                                                              \$       (78,642)       \$     (20,971)       \$     (12,583)       \$   (7,550)        \$   (7,550)        \$    (3,775)        \$       -          \$      -           \$      -           \$       -           \$      -            \$      -            \$      -            \$      -            \$      -            \$      -            \$      -            \$      -            \$      -            \$       -
EBIT                     \$        82,500 \$        (73,256)       \$     (15,491)       \$      (7,005)       \$   (1,872)        \$   (1,769)        \$       915         \$     4,804        \$    4,920         \$    5,040         \$   (12,588)        \$    5,288          \$    5,416          \$    5,547          \$    5,682          \$    5,820          \$    5,961          \$    6,106          \$    6,254          \$    6,405          \$   (11,189)
Interest Expense                                                                          \$           -          \$         -          \$         -          \$      -           \$      -           \$       -           \$       -          \$      -           \$      -           \$       -           \$      -            \$      -            \$      -            \$      -            \$      -            \$      -            \$      -            \$      -            \$      -            \$       -
EBT                     \$        82,500 \$        (73,256)       \$     (15,491)       \$      (7,005)       \$   (1,872)        \$   (1,769)        \$       915         \$     4,804        \$    4,920         \$    5,040         \$   (12,588)        \$    5,288          \$    5,416          \$    5,547          \$    5,682          \$    5,820          \$    5,961          \$    6,106          \$    6,254          \$    6,405          \$   (11,189)
Federal taxes saved/(paid)                                               \$       (25,988) \$        25,828        \$       5,614        \$       2,647        \$      854         \$      821         \$      (156)        \$    (1,513)       \$   (1,550)        \$   (1,588)        \$     4,406         \$   (1,666)         \$   (1,706)         \$   (1,747)         \$   (1,790)         \$   (1,833)         \$   (1,878)         \$   (1,923)         \$   (1,970)         \$   (2,018)         \$     3,916
State taxes saved/(paid) [can not deduct federal depreciation expense]   \$        (8,250) \$          (539)       \$        (548)       \$        (558)       \$     (568)        \$     (578)        \$      (469)        \$      (480)       \$     (492)        \$     (504)        \$     1,259         \$     (529)         \$     (542)         \$     (555)         \$     (568)         \$     (582)         \$     (596)         \$     (611)         \$     (625)         \$     (641)         \$     1,119
Net Income                     \$        48,263 \$        (47,967)       \$     (10,425)       \$      (4,916)       \$   (1,586)        \$   (1,526)        \$       290         \$     2,810        \$    2,878         \$    2,948         \$    (6,923)        \$    3,093          \$    3,168          \$    3,245          \$    3,324          \$    3,405          \$    3,487          \$    3,572          \$    3,658          \$    3,747          \$    (6,154)

CASH FLOW STATEMENT
Cash From Operations
Net Income                                                          \$        48,263    \$     (47,967) \$           (10,425) \$              (4,916) \$        (1,586) \$          (1,526) \$              290        \$     2,810        \$     2,878        \$     2,948        \$    (6,923) \$            3,093         \$     3,168         \$     3,245         \$     3,324         \$     3,405         \$     3,487         \$     3,572         \$     3,658         \$     3,747         \$    (6,154)
Federal Depreciation Expense                                        \$           -      \$      78,642 \$             20,971 \$               12,583 \$          7,550 \$            7,550 \$             3,775        \$       -          \$       -          \$       -          \$       -    \$              -           \$       -           \$       -           \$       -           \$       -           \$       -           \$       -           \$       -           \$       -           \$       -
Cash Flow From Operations                       \$        48,263    \$      30,675 \$             10,546 \$                7,667 \$          5,964 \$            6,024 \$             4,065        \$     2,810        \$     2,878        \$     2,948        \$    (6,923) \$            3,093         \$     3,168         \$     3,245         \$     3,324         \$     3,405         \$     3,487         \$     3,572         \$     3,658         \$     3,747         \$    (6,154)

Cash From Investing
Installed PV Cost                                               \$          (154,200)
\$
One Time State Solar Investment Tax Deduction (Actual Cash Value)            10,794
One Time Federal Solar Investment Tax Credit                    \$            46,260
Cash Flow From Investing                   \$           (97,146) \$              -       \$            -       \$            -       \$          -       \$          -       \$           -       \$          -       \$          -       \$          -       \$          -        \$          -        \$          -        \$          -        \$          -        \$          -        \$          -        \$          -        \$          -        \$          -        \$          -

Cash From Financing
Loan Disbursement                                                   \$              -
Loan Repayment (Principle)                                                             \$            -       \$            -       \$            -       \$          -       \$          -       \$           -       \$          -       \$          -       \$          -       \$          -        \$          -        \$          -        \$          -        \$          -        \$          -        \$          -        \$          -        \$          -        \$          -        \$          -
Cash Flow From Financing                         \$              -   \$            -       \$            -       \$            -       \$          -       \$          -       \$           -       \$          -       \$          -       \$          -       \$          -        \$          -        \$          -        \$          -        \$          -        \$          -        \$          -        \$          -        \$          -        \$          -        \$          -

Annual Cash Flow                                                         \$       (48,884) \$        30,675 \$               10,546 \$               7,667     \$     5,964        \$     6,024        \$      4,065        \$     2,810        \$     2,878        \$     2,948        \$    (6,923) \$            3,093         \$     3,168         \$     3,245         \$     3,324         \$     3,405         \$     3,487         \$     3,572         \$     3,658         \$     3,747         \$    (6,154)
Cumulative Cash Flow                                                     \$       (48,884) \$       (18,208) \$              (7,662) \$                  5     \$     5,969        \$    11,993        \$     16,058        \$    18,868        \$    21,746        \$    24,695        \$    17,771 \$            20,864         \$    24,033         \$    27,278         \$    30,602         \$    34,006         \$    37,494         \$    41,065         \$    44,724         \$    48,471         \$    42,317

Simple Payback                                                                              \$                1   \$                2   \$                3   \$              4   \$              5    \$              6   \$              7   \$              8   \$              9   \$              10   \$              11   \$              12   \$              13   \$              14   \$              15   \$              16   \$              17   \$              18   \$              19   \$              20
Net Investment                                                           \$       (48,884) \$       (18,208) \$              (7,662) \$                    5   \$     5,969        \$    11,993        \$     16,058        \$    18,868        \$    21,746        \$    24,695        \$    17,771         \$    20,864         \$    24,033         \$    27,278         \$    30,602         \$    34,006         \$    37,494         \$    41,065         \$    44,724         \$    48,471         \$    42,317
Simple Payback Year                     3                                                               3

Commercial Solar Photovoltaic Project Simple Financial Model (posted 4/06/09)
DEBT SCHEDULES
Year           Year           Year           Year           Year           Year           Year            Year            Year           Year           Year           Year           Year           Year           Year           Year           Year           Year           Year           Year
Scenario A Loan: Debt Schedule                                          1              2              3              4              5              6              7               8               9              10             11             12             13             14             15             16             17             18             19             20
Beginning Balance                                                  \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -    \$           -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -
Debt Service                                                       \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -    \$           -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -
Principle                                                          \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -    \$           -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -
Interest                                                           \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -    \$           -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -
Ending Balance                                                     \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -    \$           -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -   \$          -

Year           Year           Year           Year           Year           Year           Year            Year            Year           Year           Year           Year           Year           Year           Year           Year           Year           Year           Year           Year
Disclaimer: This Unofficial Cash Flow Model is intended to provide non-residential entities that are considering the purchase and installation of solar energy equipment with a general understanding of possible financial implications of such purchase and installation. Those entities
interested in learning more about the financial implications of the purchase and installation of solar energy equipment are urged to consult their own tax and financial experts. The information contained in the Unofficial Cash Flow Model may not be relied on by anyone for any
purposes. Furthermore, the information contained in this model does not necessarily reflect the views of the Massachusetts Technology Collaborative or the Commonwealth of Massachusetts, and reference to any specific method does not constitute an implied or expressed
recommendation or endorsement of it. Neither the Massachusetts Technology Collaborative nor the Commonwealth of Massachusetts make any warranties or representations, expressed or implied, as to the usefulness, completeness, or accuracy of any processes, methods or other
information contained, described, disclosed, or referred to in this model.

Finally, neither the Massachusetts Technology Collaborative nor the Commonwealth of Massachusetts makes any representation that the use of any product, apparatus, process, method, or other information will not infringe privately owned property rights and assumes no liability of
any kind or nature for any loss, injury, or damage directly or indirectly resulting from, or occurring in connection with, the use of information contained, described, disclosed, or referred to in this Unofficial Cash Flow Model.

Definitions
Unit of energy. This is a measure of how much energy is consumed by a home o
Back   Kilowatt-hours (kWh)           much electricity is produced by a solar PV system. The amount of energy consu
electric meter.

The solar photovoltaic (PV) system. This includes your panels (modules), inverter
Back   Solar System                   utility.

Estimated Optimal Annual       The best case scenario for how much electricity a solar PV system will produce.
Generation (kWh)               electricity depending on several factors. For example, a system will produce less
roof) than if they are on an axis that tracks the sun throughout the day. Another fa
Back
is able to face due south, the more it should produce. Tilt angle also impacts prod
optimal fixed south facing     latitude the more it will produce. An optimal system in Massachusetts that is fixed
free from shading location     a tilt of 42 degrees.

System Size                    Kilowatts are a measure of power. A kilowatt is 1,000 watts. In this case, it descr
Back                                  single solar PV panel might be rated at 180 watts. If a system uses 10 panels rat
kilowatts (kW)                 be 1800 watts, or 1.8 kW.
This is a ratio between the amount of energy produced by your solar PV system a
production capability. A 12.8% net capacity factor is average for solar PV system
Back   Annual Net Capacity Factor     the angle of the system, its orientation, and the amount of shading. If a solar PV
day, 24 hours per day at the optimal tilt and orientation with no shade then that sy
in other words, it would produce its rated output.

Annual Production              Over the course of the life of the PV system, its production capability will decrease
Back
Degradation                    Our default assumption is that this degradation will be 0.5% per year.

Depreciation is the reduction in the value of an asset due to usage, passage of ti
Back   Depreciation Life              obsolescence or other factors. Depreciation life is the "useful life" of the system,
system will provide an economic benefit.
Electricity Revenue (Avoided   This is the price per kWh that you will save on your electricity bill using this solar P
Back
Costs)                         this is a state average price for electricity.

Electricity Revenue (Avoided   This model assumes that the cost of electricity will increase at 5% per year, there
Back
Costs) Annual Adjustor         costs will also increase at 5% a year.

Renewable Energy Certificates (RECs), also known as green tags, Renewable En
Renewable Energy               Certificates (TRCs), are tradable environmental commodities in the United States
Back
Certificate (REC) Revenue      hour (MWh) of electricity was generated from an eligible renewable energy resour
and they can be sold and traded so that the owner of the REC can claim to have p

REC Revenue Annual
Back                                  This models allows the value of RECs to change by this percentage each year
Back   REC Revenue Term               RECs can be sold under contracts and the model uses a default term of 5 years f
A solar inverter is a component of a PV system that changes the direct current (D
Future Inverter Replacement    alternating current (AC) for use with home appliances or any AC load. The life of
Back
Cost                           the life of the PV panels and will likely need to be replaced during the lifetime of th
This model assumes the default cost to replace the inverter will be \$0.75/watt.
Back   Annual Generation (kWh)   This is the estimated amount of energy that your solar PV system will produce in

Total System Cost includes all elements of the installation including design, equip
Back   Total System Cost         etc. In the case of taxable commercial entities, the Total System Cost should incl
equipment
y is consumed by a home or facility. It is also a measure of how
he amount of energy consumption or production is measured by an

r panels (modules), inverter, and meter which connects you to the

ar PV system will produce. PV systems will produce more or less
a system will produce less energy if the panels are fixed (e.g. to a
oughout the day. Another factor is orientation. The more the system
Tilt angle also impacts production. The closer a system's tilt is to its
Massachusetts that is fixed, faces due south (180 degrees) and has

watts. In this case, it describes the size of the solar PV system. A
system uses 10 panels rated at 180 watts each, the system size will

d by your solar PV system and its optimimum nameplate (labeled)
verage for solar PV systems in Massachusetts. This value varies by
nt of shading. If a solar PV system had the sun shining on it every
n with no shade then that system would have a 100% capacity factor,

ction capability will decrease as it deteriorates to a degree over time.
0.5% per year.

due to usage, passage of time, wear and tear, technological
"useful life" of the system, meaning the estimated length of time the

ectricity bill using this solar PV system. The default is \$0.18/kWh as

rease at 5% per year, therefore your savings from avoided electricity

s green tags, Renewable Energy Credits, or Tradable Renewable
modities in the United States which represent proof that 1 megawatt-
ble renewable energy resource. These certificates may have a value
he REC can claim to have purchased renewable energy.

is percentage each year

s a default term of 5 years for REC sales.
hanges the direct current (DC) electricity from the PV array into
or any AC load. The life of a solar PV system's inverter is less than
aced during the lifetime of the system which can be 25 years or more.
verter will be \$0.75/watt.
PV system will produce in kilowatt hours (kWh) each year.

tion including design, equipment, labor, permitting, interconnection,
tal System Cost should include Massachusetts sales tax on the

```
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
 views: 95 posted: 8/22/2011 language: English pages: 8
Description: Solar Energy Investment Calculation document sample
How are you planning on using Docstoc?