PART 4 The Energy company of the future: Use case - photovoltaic powerplant - calculating predicted annual production and ROI

Calculating predicted annual production

To determine whether a project is of interest, we must perform a return-on-investment analysis to help us evaluate whether a project is profitable or not. 

To complete the return-on-investment analysis, we need the following data:

• the final price, 
• predicted average annual performance
• the average electricity price, including all charges & fees related to energy

Global Solar Atlas – actual horizon and sun path for location site

Global Solar Atlas – actual predicted powerplant output calculated for a specific location

Predicted powerplant output is calculated based on average weather conditions, varying between years. So, we must consider that when evaluating powerplant performance in real life. We must normalise actual powerplant output to existing weather conditions to get correct KPI results.

Calculating ROI

To determine whether a project is of interest, we must perform a return-on-investment analysis to help us evaluate whether a project is profitable or not. To complete the return-on-investment analysis, we need the following data:

• the final price, 
• predicted average annual performance 
• the average electricity price, including all charges & fees related to energy

We start the simple return on investment analysis by calculating predicted annual income. We do that by multiplying expected annual production with an electricity price that includes all relevant charges & fees.

Predicted annual production and income.

After getting the predicted annual income, we incrementally lower the purchase price to that amount over the years. We can also consider energy price trends, increase the projected energy price over the years, and shorten the investment return period.

Example: 

Simple return on investment analysis

Projection of 30% price increase over 20 years and return on investment rate

List of  documentation that needs to be completed

Based on the selections made in previous sections (country, ESCO category, equipment, subsidies, etc.), we provide a list of all the documents required by the authorities to be filled out by the client and co-owners.

Example: 

List of documents mandatory for the installation of the photovoltaic powerplant in Slovenia 

• a signed unified authorisation for the distribution system operator (SODO Enotno pooblastilo) 
• a signed application for an electrical distributor (SODO Enotna vloga) 
• Eko sklad: application for subsidy • Eko sklad: credit application for specialised eco-projects. 

The documents required by the authorities could be added to the offer as an appendix and should be returned with the signed agreement.

Preparing the final offer and signing the contract

After we have completed all the preliminary steps – we include all content and pre-fulfilling the agreement with all the customer‘s data, so all they must do is sign the contract (download, sign, then upload a signed copy). If the customer possesses a digital certificate, they can sign documents digitally.

Inquiry to the network operator for connection possibility 

After receiving all the required information, signed documents, and authorisation, we send an In-quiry to the distribution system operator, applying for permission and conditions to connect to the grid. 

• a signed unified authorisation for the distribution system operator (SODO Enotno pooblastilo) 
• a signed application for an electrical distributor (SODO Enotna vloga)

The distribution system operator must check the feasibility of connecting the powerplant to a specified site. Then they reply within the legal timeframe. In the meantime, we can audit the loca-tion and prepare a final offer and all the necessary paperwork.

Preparing inquiry documentation for the distribution system operator.