In project finance, understanding how debt sizing works is a foundational skill — especially in renewable energy deals where production output is uncertain. One of the most commonly tested —...
Can You Pass This Project Finance Modeling Test? Suppose you're preparing for interviews in infrastructure finance, private equity, or investment banking. In that case, chances are you’ll face...
The renewable energy sector, a rapidly evolving landscape of innovation and sustainability, also presents unique challenges and opportunities in the realm of financing. This in-depth article delves into...
In the renewable energy sector, evaluating project viability and performance hinges on understanding Key Performance Indicators - KPIs for renewable energy projects. These metrics are vital for...
In the evolving landscape of renewable energy, Power Purchase Agreements (PPAs) play a critical role. Understanding the nuances between different PPA structures, such as a pay-as-produced PPA and a...
How to model P50, P75, P90, P99, or any other P-value is a fundamental skill for anyone building bankable renewable energy project finance models. These statistical confidence levels aren’t just...
Renewable energy projects depend on federal tax incentives to drive down capital costs and improve project returns. The debate of ITC vs PTC is a crucial one for developers and finance professionals alike....
The U.S. renewable energy market relies on innovative financing tools to unlock the full potential of federal incentives. Tax Equity is one such tool that monetizes federal tax credits and depreciation...
In the evolving landscape of renewable energy project finance, a deep understanding of financing instruments is crucial for both aspiring analysts and seasoned professionals. One such instrument known...
Introduction: What Is an Energy System — and Why Should You Care?What is an energy system? It’s a question that often goes unanswered in many business and finance discussions around electricity,...
Imagine securing a long-term power purchase agreement for a new wind or solar project, only to discover that your actual revenue fluctuates wildly due to unpredictable grid congestion costs and transmission...
Mini-perm ("MP") loans play a strategic role in project finance, particularly for large-scale infrastructure and energy projects. These loans offer a shorter-term financing solution that bridges the initial...
A Letter of Credit (LoC) is a financial commitment issued by a bank on behalf of its client, guaranteeing payment to a seller under specified conditions. Serving as a cornerstone of global trade, it...
A Power Purchase Agreement (PPA) is a foundational instrument in the energy sector, especially within the realm of renewable energy. PPAs serve as crucial contracts between electricity generators and...
When diving into the world of electricity, renewable energy, or grid systems, one fundamental distinction often causes confusion: energy vs power. Although many use the terms interchangeably, from a...
This Financial Model User Guide supplements the underlying financial model and video courses by Renewables Valuation Institute.Students and users of the financial model can gain maximum value from using...
The world of renewable energy financing is witnessing a significant transformation thanks to the advent of green bonds. These financial instruments are not only reshaping how investments are made in...
Financial modeling and valuation of a wind farm or solar plant - is the fair valuation simply the price paid for the asset, or do investors view the value of a renewable energy asset differently? When...
Solar project finance is the process of obtaining funding for the development, construction, and operation of a solar energy project. It involves creating a solar project finance model that outlines the...
Renewable energy project finance modeling is a financial analysis technique used to evaluate the feasibility and profitability of renewable energy projects such as wind, solar, hydro, geothermal, and biomass....
An ESG (Environmental, Social, and Governance) analyst is responsible for analyzing and evaluating companies or investments based on ESG criteria. The primary goal of an ESG analyst is to determine the...
In the center of a project finance deal, there is typically a Special Purpose Vehicle (SPV), which is a separate legal entity established solely for the purpose of the project. The SPV is created to...
Guarantees of Origin (GoOs or GOs) are electronic certificates that provide information about the source of electricity generation. They are used in many countries as a means of verifying and tracking the...
Building an advanced project finance model in Excel can be a challenging but rewarding experience that will enhance your financial modeling skills and set you apart from your peers. By reading and applying...
What is project finance? Project finance is a financing structure that provides funding for a specific project, typically a large-scale infrastructure or capital-intensive project. In project finance, the...
EPC stands for Engineering, Procurement, and Construction, and an EPC agreement in a renewable energy context refers to a contract between a developer and a contractor in which the contractor agrees to...
Renewable energy refers to energy sources that are replenished naturally and can be sustained indefinitely, such as wind, solar, hydro, and geothermal energy. What exactly is renewable energy? Renewable energy...
In a project finance deal, the seasonality of renewable energy revenues has a significant impact on monthly cashflows. Consequently, seasonality needs to be considered in a best-practice financial model...
AC vs DC - for renewable energies, the difference between AC (Alternating Current) and DC (Direct Current) lies in their respective suitability for different stages of the energy generation,...
The Major Maintenance Reserve Account (MMRA) ensures that during certain operational years with lumpy capital expenditures, a project can be maintained without raising further capital. This requires...
NORMINV Function in Excel: Returns the inverse of the normal cumulative distribution considering two inputs - the specified mean and standard deviation. What is the NORMINV function? The NORM.INV function...
Degradation reduces the electricity output of solar panels over time. These losses must be considered when building a financial model for a solar plant. What exactly is degradation? Nowadays, high-quality solar...
The debt service coverage ratio (DSCR) determines how much the cash flow available for debt service (CFADS) exceeds the total scheduled debt service, i.e., debt principal and interest, in any given...
The Debt Service Reserve Account (DSRA) protects a lender against an unexpected decrease in cash flow available for debt service (CFADS). The DSRA ensures that the debt provider receives the debt service...
How to value a wind farm or solar plant - is the fair valuation simply the price paid for the asset, or do investors view the value of a renewable energy asset differently? When approaching 100 different...
A project finance analyst is a professional who specializes in analyzing and evaluating financial data related to large-scale projects, such as infrastructure, energy, or real estate developments....
Building a financial model in Excel can be a challenging but rewarding experience that will enhance your financial modeling skills and set you apart from your peers. By reading and applying the concepts of...
What companies are in the finance field? There is a multitude of companies in the finance field, ranging from large banks to small financial technology startups. Some examples of the largest companies in...
How to consider seasonality in Excel? In project finance, seasonality refers to the impact of seasonal variations on the cash flows generated by a project. This is particularly relevant for projects in...
Since the end of 2021, electricity prices in Europe are surging to highs never seen before - is it all to be blamed on rising gas prices, or may there be a systemic failure in how electricity prices are...
Bilaterally concluded power purchase agreements ("PPAs") are becoming increasingly popular in the renewables industry; thus, knowing how to model PPA offtake agreements becomes critical. In addition, many...
Sculpted debt according to a target debt service coverage ratio (DSCR) is essential to maximizing project financing and thus equity return. While traditional debt repayment structures like an annuity or a...
What are full load hours? First of all, there are 8,760 hours in one year. This is a very important number within the renewables industry. If we go back to our solar plant in California, you might think...
While the units kW and kWh may seem very similar, they are two fundamentally different things, especially when it comes down to modeling a renewable energy investment. Still, many people in the renewables...
