Modelling SREC Variable and Holdback Fees 🇺🇸

There are a number of possible fees that are associated with SREC solutions that are provided by third parties. This article outlines a solution to model these in OpenSolar. There are three main fees which are presented here: 

% Fees

$/kW Fees

Holdback Fees

After they are created you will need to apply them in Studio. 

How to Apply Fees in Studio

% Fees

These can be modelled using in Control by creating the fee as an Other Component. Go to Control>Design and Hardware>Other Components>Create>Enable Additional costs. 

This is done for each system size range (i.e. 0-10kW, 10-25kW etc.). 

Calculating the Value field is done by the following formula:

$/kW =  (AC/DC ratio * Fee Percentage * Current Block Price of REC * 16.42% * 8760 [hr/year] * 15 [years] ) / 1000

So for this example (assuming an AC/DC ratio of 0.88): 

$/kW =  ( 0.88 * 10% * 85.1 * 16.42% * 8760 [hr/year] * 15 [years] ) / 1000 = 161.6 $/kW

How these fields are filled out is shown below assuming that there is a 10% fee for 0-10kW systems. 

$/kW Fees 

The $/kW fees can be calculated and entered in a similar way. 

Assuming that there is a $10/kW fee then you can simply create an Other Component which has the following inputs, where the value is $10/kW fee multiplied by the AC/DC ratio (assuming 0.88 here):

Holdback Fees

This fee will create some changes to your incentive modelling. 

For example, if there is a 5% holding fee which is paid back in year 15 then you will need to multiple each of the incentive amounts by 0.95 in order to reduce them by 5%. 

$/kW =  (AC/DC ratio * Fee Percentage * Current Block Price of REC * 16.42% * 8760 [hr/year] * 15 [years] ) / 1000

Assuming an AC/DC ratio of 0.88:

$/kW =  (0.88 * 5% * 85.1 * 16.42% * 8760 [hr/year] * 15 [years] ) / 1000 = 80.78 $/kW

To model the payback then you can create an Other Component which has the following inputs:

This will mean that the Holdback fee is paid out at the end of year 15. 

Applying Fees in Studio

In order to apply the fees in Studio, you will simply need to choose the applicable fee in the left hand sidebar underneath Other components. 

Simply apply them to project as shown in the image below: