Documentation Product guides Prospect app

Inputs for project finance calculations

The inputs used for the calculations on the “Finance” section are also editable, otherwise default values will be used for the calculation. For changing these settings, the user can do it from the tab “Inputs”. The changes will be applied automatically and new results will be shown in the chart and tables on the top.

The editable fields in this section are divided into four groups:

  • Price of electricity. Choose the price scheme from the drop-down (available options are Feed-in tariff, Power Purchase Agreement, and Net metering) and adjust the amount of Self-consumption.

  • System installation costs. Indicate the System installation costs, Solar incentives and details of the Loan.

  • Operational costs. Adjust the expected annual Operational costs and total Inverter replacement costs.

  • PV system configuration. Indicate the years of operation. The rest of the details will be taken from the current PV configuration.

Finance 1

How are project numbers calculated (OPEX, ROI, LCOE, IRR...)?

Prospect's Finance calculator was designed with the help of our financial advisers, and we are currently working to bring more development to the tool. This is how each term is calculated:

  • OPEX default values are based on common assumptions and they can be adjusted in the same web inputs. 
  • ROI is calculated based on standard methodology: Total nominal project profit / Total nominal project revenue. Profit formula is also very simple: Total nominal project revenues - Total nominal project costs.
  • LCOE is calculated as: Discount total project energy revenues / Discounted total project costs.
  • IRR is calculated based on the discounted cash flow as opposed to the actual cash flow. We are looking to update the calculation methodology so that the IRR is calculated on nominal values and not discounted; otherwise it might not reflect the best outcome with regard to actual cash flow.

Does the finance calculation include module degradation?

Prospect includes the effect of degradation in the finance section using two factors you can adjust from the configuration settings:

  • Degradation rate on the first year
  • Degradation rate for next years, until the end of PV plant’s lifetime