Q0027
Two solar farms with the same MW rating can have very different energy production, connection costs, land costs, financing, construction risk and electricity prices. Project value depends on lifetime net cash flow—not nominal capacity.
Comparing projects using only installed MW or headline construction cost can direct capital toward a weaker site. Investors need to compare the quantity, timing and certainty of saleable electricity against the complete lifecycle cost and risk.
Two identically sized plants may receive different revenue because of:
The Energy Commission announced revised CRESS system-access charges of 20 sen/kWh for firm supply and 40 sen/kWh for non-firm supply during the applicable regulatory period. This illustrates how commercial structure can materially affect project economics. Energy Commission CRESS charge revision
A 100 MW plant does not generate a fixed quantity of energy. Output varies with:
A project generating 5% more saleable energy over decades may be worth substantially more even if its installed capacity is identical.
One plant may connect through a short line to a suitable substation. Another may require:
A cheaper parcel of land can become the more expensive project once grid infrastructure is included.
Relevant differences include:
Projects may use different:
A lower initial equipment price may bring lower yield, greater degradation or higher maintenance.
Economics can change materially because of:
A project completed earlier begins earning sooner. Delays create:
Different ownership and financing structures can produce different after-tax returns even where plant-level performance is similar.
Compare projects using:
Without project-level diligence:
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