Financial model
Budget: $30 – $250 USD
Build a simple solar project 20-year projection model.
● Assumptions: ○ ○ ○ 500 kW system, generates 650,000 kWh per year
■ Assume this decreases by 0.5% each year $0.20 earned per kWh
■ Assume this increases by 2% each year 20 year project life
■ $3.00 per watt upfront cost
■ $10,000 total operations cost per year
■ In Year 10, $100,000 one-time inverter replacement cost
● Guidelines
○ Start with revenues earned from the power generation and subtract annual operating costs
○ Include the initial upfront costs and the one-time inverter replacement cost in Year 10
○ Be mindful of kW vs. kWh and kW vs. watt
● Calculate the IRR of the cash flows (feel free to use a direct Excel
● Assumptions: ○ ○ ○ 500 kW system, generates 650,000 kWh per year
■ Assume this decreases by 0.5% each year $0.20 earned per kWh
■ Assume this increases by 2% each year 20 year project life
■ $3.00 per watt upfront cost
■ $10,000 total operations cost per year
■ In Year 10, $100,000 one-time inverter replacement cost
● Guidelines
○ Start with revenues earned from the power generation and subtract annual operating costs
○ Include the initial upfront costs and the one-time inverter replacement cost in Year 10
○ Be mindful of kW vs. kWh and kW vs. watt
● Calculate the IRR of the cash flows (feel free to use a direct Excel