System Costs

Indirect Capital Costs

An indirect cost is typically one that cannot be identified with a specific piece of equipment or installation service, and may include all other costs that are built into the price of the system, such as profit, overhead, and shipping costs. Depending on the purpose of your analysis, you may decide to distribute profit among the direct cost categories or include them as a single value in an indirect category.

Note: Because Solar Advisor uses only the total installed cost value in cash flow calculations, how you distribute costs among the different indirect capital cost categories does not affect the final results.

Variable	Description	Units
Engineer, Procure, Construct	Costs associated with design and construction of the project, calculated as the sum of a percentage of Total Direct Cost and a fixed cost.	% and $
Project, Land, Miscellaneous	Costs associated with profit, overhead (including marketing), permitting, or shipping, calculated as the sum of a percentage of Total Direct Cost and a fixed cost.	% and $
Sales Tax	Percentage of direct costs to which sales tax applies, calculated by multiplying Total Direct Cost by the sales tax rate from the Financials page and the percentage that you specify.	%
Total Indirect Cost	The sum of Engineer-Procure-Construct costs, Project-Land-Miscellaneous costs, and sales tax.	$

Total Installed Cost

The total installed cost is the project's investment cost that applies in year zero of the project cash flow. Solar Advisor uses this value to calculate loan amounts and debt interest payments based on inputs on the Financing page, and to calculate tax credit and incentive payment amounts for incentive based tax credits and incentives defined on the Tax Credit Incentives page and Payment Incentives pages.

Variable	Description	Units
Total Installed Cost	The sum of total direct cost and total indirect cost.	$
Total Installed Cost per Capacity	Total installed cost divided by the total system capacity in Watts-DC of array capacity for PV systems and electric kilowatts of power block nameplate capacity for CSP systems. This value is provided for reference only and not used in cash flow calculations.	$/Wdc or $/kW

Operation and Maintenance Costs

Operation and Maintenance (O&M) costs represent annual expenditures on equipment and services that occur after the system is installed. Solar Advisor allows you to enter O&M costs in three ways: Fixed annual, fixed by capacity, and variable by generation. O&M costs are reported on the project cash flow.

For each O&M cost category, you can specify an annual escalation rate to represent an expected annual increase in O&M cost above the annual inflation rate specified on the Financing page. For an escalation rate of zero, the O&M cost in years two and later is the year one cost adjusted for inflation. For a non-zero escalation rate, the O&M cost in years two and later is the year one cost adjusted for inflation plus escalation.

For expenses such as component replacements that occur in particular years, you can use an annual schedule to assign costs to individual years. See below for details.

O&M Cost Category	Description	Units
Fixed Annual Cost	A fixed annual cost applied to each year in the project cash flow.	$/yr
Fixed Cost by Capacity	A fixed annual cost proportional to the array capacity in DC kilowatts.	$/kWdc-yr
Variable Cost by Generation	A variable annual cost proportional to the system's total annual electrical output in AC megawatt-hours. The annual output depends on either the performance model's calculated first year value and the degradation rate specified on the Annual Performance page, or on an annual schedule of costs, depending on the option chosen.	$/MWh-yr
Fossil Fuel Cost	The cost per million British thermal units for fuel. Solar Advisor uses the conversion factor 1 MWh = 3.413 MMBtu. Applies only to the generic fossil, CSP trough, and CSP tower systems. The photovoltaic and CSP dish models ignore the fuel cost input variable. (When the fossil fill fraction variable on the Thermal Storage page for troughs or towers is greater than zero, the systems consume fuel for backup energy.)	$/MMBtu