Solar Energy Financial Model (10 Year Financial Forecast)

Featuring specific Solar Energy metrics you can track (Solar System Size in kWp, Total Electricity Generated in kWh, Volume of Electricity Sold by Revenue Stream (Power Purchase Agreements (PPA), Feed-in Tariffs (FiTs), Other), Pricing by Revenue Stream (PPA, FiT, Other) and Energy Sales by Revenue Stream (PPA, FiT, Other), Other Income (Investment Tax Credit (ITC), Production Tax Credit (PTC) and more), users will easily be able to navigate the model with all input fields highlighted in Blue font. These models are designed to be the perfect financial tool for business owners to use to make decisions for their company and also to provide investors with a snapshot of how the business is currently performing and what the forecasts look like.

Revenue Assumptions

It starts with basic model questions about the start date of the model, the tax rate assumption, the project life of the solar farm (years), and the project start date. Revenue assumptions are the anticipated factors that drive a company’s income generation over a specific period. These assumptions form the basis for financial projections and are crucial for planning and decision-making. In our model we have included detailed inputs on Solar System Size in kWp, Total Electricity Generated in kWh, Volume of Electricity Sold by Revenue Stream (Power Purchase Agreements (PPA), Feed-in Tariffs (FiTs), Other), Pricing by Revenue Stream (PPA, FiT, Other) and Energy Sales by Revenue Stream (PPA, FiT, Other), Other Income (Investment Tax Credit (ITC), Production Tax Credit (PTC).

Operating Expenses Assumptions

Operating expense assumptions are typically based on historical data, industry benchmarks, market trends, and management’s judgment. They are crucial for estimating the business’s total cost and determining profitability. Like revenue assumptions, it’s important to regularly review and adjust operating expense assumptions to reflect changes in the business environment and ensure the accuracy of financial forecasts. In our model, we have included detailed inputs on Solar Energy Staff Costs (Executive Team (CEO), Operations Team (Site Manager, Operations Manager), Technical & Engineering Team (Solar Technician/Installer, Electrical Engineer, Maintenance Technician, Field Technician), Finance & Administration Team (Data Analyst, Accountant, Administrative Assistant) and Other Staff relevant to the operations (Environmental and Safety Specialist, Security Personnel, Other). We have also included Other Operational Expense items driven by a % of Revenue assumed, including Operations and Maintenance Costs, Insurance, Property Taxes, Administrative Costs, and Other costs.

Funding and Other Assumptions

Capital expenditure (Capex) assumptions refer to the anticipated investments a company plans to make in long-term assets, such as property, plant, equipment, and technology, over a specific period. These assumptions are crucial for financial planning, budgeting, and forecasting, impacting the company’s cash flow, profitability, and growth prospects. We have included Initial cost assumptions for the main items likely to be on a company’s Capex sheet. Some of the items are driven by the cost per MW (where we have provided a cost assumption field) these include Solar Panels and Modules, Inverters, Mounting and Racking Systems, Electrical Components and Wiring, Permitting and Regulatory Costs, Labor and Installation. Outside these items, we have also included Site Preparation and Land Costs, Commission and Testing, Operational and Maintenance, and Other Contingency and Miscellaneous Costs as assumption fields. There is also a Use Of Funds assumption list with a corresponding bar chart included. We have also included Capital Structure Funding assumptions (i.e., 30% funded by Equity, 70% by Debt, which you can modify) and assumptions on any further equity investments made and initial cash position.

Monthly Projections (10-year period)

We have broken down projections on a Month-by-month basis when projecting income statements, balance sheets, and cash flow statements. The monthly projections are provided over a 10 year time frame. This is particularly useful for businesses looking at month-on-month trends and insights in the business, which leads to better decision-making and also better budgeting should there be a need to either raise more capital, pursue growth opportunities from excess capital or pay down interest-bearing debt. Monthly projections also help a business ascertain what performance may be seasonal in nature when looking at growth projections on a month-over-previous-years-month basis.

Annual Projections (10 year period)

The model has Annualized Financial Projections of Income Statement, Balance Sheet and Cash Flow Statement over a 10 year time frame. Annual projections provide an excellent overview of expected revenues, expenses, profits, cash flow, and other key financial metrics for the upcoming year. Annual projections are essential for strategic planning, budgeting, fundraising, and performance evaluation for any company at any stage of their business cycle.

Solar Energy Metrics & Ratios

Solar-specific metrics (Size of Solar System in kWp, Total Amount of Electricity Generated by the Solar Power System (kwH), Volume metrics for PPA, FiTs, and Other Revenue, Pricing metrics for PPA, FiTs, and Other Revenue and Revenue metrics for PPA, FiTs, and Other Revenue), Profitability Metrics, Liquidity Ratios provided.

Summary of Financial Statements (10 year period)

Summarized Financial Statements over a 10 year time frame helps for better snapshots of financial performance. Income Statement, Balance Sheet and Cash Flow Statement all provided.

Charts

Solar Energy specific Charts are available, including Solar Revenue by Revenue Stream, Cashflow Summary, Assets vs Liabilities, and Profitability Analysis.

DCF Valuation

We have included a Discounted Cash Flow (DCF) Valuation model showing the Business’s Net Present Value (NPV) based on a series of growth rates and assumptions. Weighted Average Cost of Capital Assumptions is also provided, including Risk-Free rate, Beta, Risk Premium, and Equity Risk Premium. A DCF valuation is a method used to estimate the value of an investment, business, or asset by discounting its expected future cash flows to present value. It is based on the principle that the value of an investment is determined by the present value of its future cash flows. The DCF valuation technique is widely used in finance, investment analysis, and corporate finance for making investment decisions, determining the fair value of securities, and evaluating the worth of businesses.

Depreciation Schedule

The Detailed Depreciation Schedule shows additions/disposals to the business’s Fixed Asset Register. Sections are included for Land, Buildings, Equipment, and Others.

Debt Schedule

Debt schedule provided with interest rate assumptions and payback period assumptions included.

Equity Schedule

Equity schedule provided with assumptions on all investments into the business by investors or owners.