Introduction to Economic Parameters and Configuration Methods

The Financials settings allow users to set up baseline economic parameters for solar projects. These inputs are used to calculate long-term return on investment (ROI), net present value (NPV), and generate financial reports for clients.

The configuration parameters are grouped into five key areas:

a. Currency

Sets the local currency baseline for all financial calculations and reports.

Currency: Choose the standard currency used in the target country or region (e.g., ARS - $ as shown in the image).

b. Electricity Prices

Defines utility rates and future trends to accurately calculate utility bill savings.

Export Rate ("Sell" Price): The price received for selling surplus solar electricity back to the grid.
Import Rate ("Buy" Price): The standard price paid to buy electricity from the grid.
Estimated Growth Rate of Electricity Price (%/Year): The expected annual inflation or increase rate of utility prices.

c. Life Cycle Management

Defines long-term operational horizons and ongoing maintenance costs.

System Lifespan (Year): The total number of years the solar system is expected to operate and perform financial analysis.
Annual O&M Cost ($)/W: The average annual operation and maintenance costs per kW (DC) installed.
Inverter Lifespan (Year): The expected operating years of the inverter before it requires replacement.
Inverter Replacement Cost ($)/kW: The estimated cost per kW (AC) to replace an expired inverter.

d. Asset Management

Controls advanced financial evaluation metrics.

Net Present Value Discount Rate (%): The interest rate used to calculate the present value of future cash flows, directly impacting NPV and LCOE (Levelized Cost of Electricity) calculations.
Whether to Pay National Tax: Toggles whether national income tax applies to the revenue generated from selling electricity to the grid.

e. Loan Management

Incorporates financing structures if the system is not paid for completely upfront.