3 replies to this topic

[sunnysky]

Some carefully calculated examples can be found in the below article.

 

http://sc.stock.cnfo...147177,00.shtml

 

     1. Central power station

 

​Assumptions:  Cost = 8.76 Y/W, % Financed = 70%, Loan Rate = 6.55%,

                       Hours of Operation per Year,  I = 1500, II = 1400, III = 1300

Internal Rate of Return for the three regions (divided based on available sun resources):  I = 11.77%, II = 11.24%, III = 10.46%

 

      2, Distributed power generation

 

Assumptions:  Cost = 9.76 Y/W, % Self-Use= 90%, Prevailing Electricity Price = 0.80 Y/KWH,

                       Grid-Bound Electricity Price = 0.44 Y / KWH

Internal Rate of Return:  11.11%

 

The FiT for distributed generation is 0.42 Y/KWH. So I think when generous regional and local subsidies are factored in,  the IRR should be sunstantially higher than 11.11%.

[joshchang]

A big variable in calculating irr in china is the cost of capital (loan interest rate). There is no long term (20 to 25 years) fixed rate loan designed for solar plants borrowing. Plug in differt interest rate (4% to 8%), you will have a big range for irr. Hope long term financing situation can improve in the future.

[sunnysky]

Yes, the sensitivity of IRR to the loan rate is calculated to be equal to 0.70 - 3.0 percentage point for every 1% increment of loan rate. 

[sunnysky]

The estimate for IRR for a PV project in China has many variables. Here is a more optimistic example.  The calcuation is done for QingHai province in Region I. Loan rate is the same, 80% financed, and assuming 1600 hours per year power generation time. Not sure about the build cost assumption,

 

 

​Assumptions:  Cost = ? Y/W, % Financed = 80%, Loan Rate = 6.55%,

                       Hours of Operation per Year,  I = 1600

Internal Rate of Return for the three regions (divided based on available sun resources):  I = 20%

 

If the capacity is 100 MW, yearly income from electricity generated is 144 million yuan and profit margin will be 25%. 

 

http://solar.ofweek....3-28735382.html