Understand the key financial metrics calculated by SolarQuant.
Project IRR (Internal Rate of Return)
The Project IRR represents the expected annual return on the total project investment, before considering financing structure.
What it means : Higher is better. Investors typically want 12-18% for solar projects.
Equity IRR
The return on the equity portion of the investment, after accounting for debt service.
What it means : Usually higher than Project IRR due to leverage. Target ranges vary by investor risk appetite.
Payback Period
The time required to recover the initial investment from project cash flows.
What it means : Shorter is better. Most investors want payback within 5-7 years.
Net Present Value (NPV)
The present value of all future cash flows minus the initial investment.
What it means : Positive NPV indicates a worthwhile investment.
LCOE (Levelized Cost of Energy)
The average cost per unit of energy over the project lifetime.
What it means : Lower LCOE makes projects more competitive.
How We Calculate These
SolarQuant uses a detailed financial model incorporating: - Revenue from energy sales - Operating expenses - Debt service schedules - Tax effects and depreciation - Terminal value assumptions