top of page
Solar Panels

Creating a Solar ProForma

Solar Panel Roof

ProForma Explained

A proforma is a financial model used to estimate the potential performance of a utility-scale solar energy project. The following steps can be used to create a proforma for a utility-scale solar energy project:

  • Define the scope of the project: Start by defining the scope of the project, including the size of the solar energy system, the location, and the type of system (e.g. ground-mounted, rooftop, etc.). This information will be used to estimate the cost of the project and the expected energy production.

  • Establish the project costs: Establish the cost of the project, including the cost of the equipment, installation, and any other associated costs. Use industry averages or quotes from suppliers to estimate the cost of the equipment and installation.

  • Determine energy production: Determine the expected energy production of the solar energy system based on the size of the system and the location. Use a solar irradiance calculator or consult with a solar energy consultant to estimate the expected energy production.

  • Establish the projected revenue: Establish the projected revenue by determining the price at which the energy will be sold. For utility-scale projects, this may be the rate offered by the utility company. For commercial projects, this may be the rate paid by the customer.

  • Establish operating expenses: Establish the operating expenses for the project, including maintenance and repair costs, insurance costs, and any other ongoing expenses.

  • Calculate the net cash flow: Calculate the net cash flow for the project by subtracting the operating expenses from the revenue.

  • Determine the project payback period: Determine the project payback period by dividing the initial investment by the annual net cash flow.

  • Evaluate the project return on investment (ROI): Evaluate the project return on investment (ROI) by dividing the net cash flow by the initial investment.

  • Incorporate uncertainty: Incorporate uncertainty into the model by considering the potential impact of factors such as energy production, revenue, and operating expenses. This can be done using sensitivity analysis or Monte Carlo simulation.

  • Refine and update the model: Refine and update the model as needed based on additional information and changes to the project.

Creating a proforma for a utility-scale solar energy project can be a complex process, but it is an important tool for evaluating the potential performance of the project and making informed decisions about investment.

development@solarmason.com

bottom of page