This summer, we unveiled an exciting new approach to proposal generation, where we put the power in YOUR hands to design your proposals based on a set of modular, configurable components. Today we updated several of the components to give you even MORE control, and to make them more accurate and more flexible to match real-world scenarios.
Many of the components show the "lifetime profit" of the PV system. Some of you prefer to define the "lifetime" in different ways, based on your customer, the equipment you're using, how the system is being financed, etc. From the start, you've had the ability to customize those components, and specify the lifetime (30 years, 20 years, etc.). Today, to offer even greater accuracy and control, we now allow you to specify the following:
- # of SREC years (how many years you're projecting that SRECs will be earned from the PV system)
- energy degradation (the percentage by which the solar modules will degrade from each year to the next, over their lifetime)
You'll now notice these customizable settings in many of the components, including the Cash Flow Table, the Lifetime Graph components (for all financing types -- cash, lease, loan, and PPA), the Cost Breakdown component (for cash proposals), and the Production Summary (typically shown on the first page, below the cost breakdown and the pie chart).
Now, give yourself a pat on the back if, after reading that last paragraph, you thought, "The Production Summary? But that only shows two lines: percentage of electricity replaced by solar, and total kWh generated per year. Since it's not doing lifetime calculations, why does it need these new settings?"
The reason is: we've added a new, optional line to the Production Summary component: Cost of Solar Energy --expressed in $ per kWh, over the lifetime of the system. Yes, we're talking about Levelized Cost of Energy (LCOE)!
Our approach to calculating LCOE is very straightforward (like everything else about the ModSolar Platform, we don't want to introduce additional complexity unless we absolutely have to). We calculate the total cost of ownership over the lifetime of the system -- including up-front costs, financing payments, etc., minus any tax credits, performance based incentives, SRECs received, etc. -- divided by the total energy produced by the PV system over its lifetime, taking degradation into account. (We are not considering advanced factors such as ongoing operation and maintenance, replacement cost of inverters, or present value of money calculations --- again, we wanted to keep it simple.)
So . . . be sure to check out the new customizable settings in the components, and familiarize yourself with the ways that you can make your proposals even more detailed and more accurate!
(One important note: the customizable settings are in each individual component. So, you need to make sure that your values for the settings are CONSISTENT across all components -- if system lifetime, SREC years, or degradation factor vary from component to component, your proposals will not be accurate. We're working on making these settings "global" (proposal-wide), so this concern is only temporary until we make that change.)
And one final note: The new LCOE line in the Production Summary is a small glimpse of new, powerful components that we're working on, to make it very easy for your prospects to see the benefit of "going solar," versus continuing to buy all their electricity from the utility company, and even compare an up-front cash purchase with financing the system. Stay tuned for more announcements!