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Thabiso KaliEnergy engineer · CEM

For finance, commercial and investment people

Solar PPA project-finance calculator

An annual, nominal-rand model of a rooftop solar plant owned by a project company and paid through a power purchase agreement. The reference case is the one in the solar PPA case study, and the matching Excel workbook gives the same answers.

Inputs

Pre-filled with the reference case (the same inputs as the Excel model). Results update as you type. Jump to results

Plant
kWp
kWh/kWp/yr
%/yr
Costs and revenue
R/Wp
R/kWp/yr
R/kWh
%/yr
%/yr

Escalates opex.

years
Senior debt
% of capex
%
years

Level annuity, paid annually in arrears. Capped at the PPA term.

Tax and returns
%
%

Results

Equity IRR 20.0%, project IRR 15.6%, minimum DSCR 1.27x, LCOE R1.04 per kWh.

Equity IRR
20.0%
Post-tax, levered
Project IRR
15.6%
Post-tax, unlevered
Minimum DSCR
1.27x
Over 10 debt years
Average DSCR
1.52x
Over the debt tenor
Equity NPV
R1.50m
At 16.0%
LCOE
R1.04/kWh
At 10%, pre-tax
Equity payback
Year 7
Cumulative cash ≥ 0
Year-1 generation
1,650MWh
1,650 kWh/kWp

Funding: capex R12,000,000 = senior debt R7,800,000 + equity R4,200,000. Debt service R1,352,342 a year for 10 years.

Equity cash flow by year

Rand, nominal. Year 0 is the equity contribution; the step up follows the final loan repayment. Hover a bar for its value; every value is in the table below.

−R4m−R2mR0R2mYear 0: equity cash flow −R4,200,0000Year 1: equity cash flow R365,158Year 2: equity cash flow R450,5112Year 3: equity cash flow R540,106Year 4: equity cash flow R634,1534Year 5: equity cash flow R732,874Year 6: equity cash flow R836,5026Year 7: equity cash flow R945,279Year 8: equity cash flow R1,059,4628Year 9: equity cash flow R820,084Year 10: equity cash flow R625,27410Year 11: equity cash flow R2,036,365Year 12: equity cash flow R2,137,56412Year 13: equity cash flow R2,243,793Year 14: equity cash flow R2,355,30114Year 15: equity cash flow R2,472,350Year 16: equity cash flow R2,595,21616Year 17: equity cash flow R2,724,188Year 18: equity cash flow R2,859,56918Year 19: equity cash flow R3,001,678Year 20: equity cash flow R3,150,85020−R4.2mR3.2mYear
SensitivityWhich inputs move the answer most (tornado)Show
Compare scenariosSave inputs and see them side by sideOpen

Up to 4. Kept on this page until you leave it; use “Copy link with inputs” to keep one for later.

OutputReferenceCurrent inputs
Equity IRR20.0%20.0%
Project IRR15.6%15.6%
Minimum DSCR1.27x1.27x
Equity NPVR1.50mR1.50m
LCOER1.04/kWhR1.04/kWh
Equity paybackYear 7Year 7
Changed from referenceNoneNone

Annual cash flow

R'000 unless stated. DSCR = CFADS ÷ (interest + principal). Scroll sideways for all columns.

YearGeneration
MWh		Tariff
R/kWh		RevenueOpexEBITDAInterestPrincipalTax
(levered)		CFADSDSCREquity
cash flow		Cumulative
equity		Project
cash flow
0––––––––––−4,200−4,200−12,000
11,6501.151,897−1801,717−897−45501,7171.27365−3,8351,717
21,6421.211,992−1891,803−845−50801,8031.33451−3,3841,803
31,6341.282,091−1981,892−786−56601,8921.40540−2,8441,892
41,6251.352,195−2081,986−721−63101,9861.47634−2,2101,986
51,6171.422,304−2192,085−649−70402,0851.54733−1,4772,085
61,6091.502,419−2302,189−568−78502,1891.62837−6412,189
71,6011.592,539−2412,298−477−87502,2981.709453051,765
81,5931.672,665−2532,412−377−97602,4121.781,0591,3641,761
91,5851.762,798−2662,532−265−1,088−3592,1721.618202,1841,848
101,5771.862,937−2792,657−139−1,213−6801,9781.466252,8091,940
111,5691.963,083−2932,790––−7532,036–2,0364,8462,036
121,5612.073,236−3082,928––−7912,138–2,1386,9832,138
131,5542.193,397−3233,074––−8302,244–2,2449,2272,244
141,5462.313,566−3393,226––−8712,355–2,35511,5822,355
151,5382.433,743−3563,387––−9142,472–2,47214,0552,472
161,5302.573,929−3743,555––−9602,595–2,59516,6502,595
171,5232.714,125−3933,732––−1,0082,724–2,72419,3742,724
181,5152.864,330−4133,917––−1,0582,860–2,86022,2342,860
191,5083.014,545−4334,112––−1,1103,002–3,00225,2353,002
201,5003.184,771−4554,316––−1,1653,151–3,15128,3863,151
Download the Excel model (.xlsx)

Built from the same specification as this calculator, so you can trace every number.

Method

Generation
E_y = size × specific yield × (1 − degradation)^(y − 1)
Revenue, opex, EBITDA
revenue = E_y × tariff × (1 + esc)^(y − 1), opex escalates at CPI, EBITDA = revenue − opex
Debt
level annuity over the tenor, paid annually in arrears from year 1
Tax
full capex deducted in year 1; assessed losses carried forward indefinitely
The levered view deducts interest; the unlevered view (for project IRR) does not.
Cover ratio
CFADS = EBITDA − tax, DSCR = CFADS ÷ (interest + principal)
Equity
−equity at year 0, then CFADS − debt service; payback is the first year cumulative cash ≥ 0
LCOE
(capex + PV of opex) ÷ PV of generation, both at 10%
Sensitivity (tornado)
output with input × (1 − f) and × (1 + f), one input at a time
At ±10% on tariff and capex this reproduces the workbook's own sensitivity table exactly.

Assumptions

  • Annual periods, nominal rand, capex spent at year 0 with no construction period.
  • Section 12B: 100% of capex deducted in year 1 (PV up to 1 MW). Above 1 MW the allowance is 50/30/20; the section 20 cap on assessed losses is not applied.
  • No residual value, DSRA, inverter replacement or VAT; the PPA term is the model horizon.
  • In the sensitivity, capex flexes debt with it (gearing held at the debt share), as in the workbook.

Sources

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