DISCLAIMER

The purpose of this financial model is to provide guidance on potential costs for Renewable Energy installations
(<100KW) installations. The eThekwini Municipality makes no warranty – implied or expressive – with respect to
appropriateness of any information contained in this Model. The eThekwini Municipality undertakes no duty to or
on this document. It is the Model user´s responsibility to thoroughly check that the assumptions are appropriate f
Model.
Basic information on the financial model:
• 20 year project lifespan
• Time of use electricity tariffs are not covered
• Mix of debt and equity finance structures possible
• Tax impact on profits and loss included (5 year straight line write-off)

How to operate the model

• Change project parameter in Summary sheet. Only yellow fields can be changed
• The other sheets operate the underlying calculations and can be viewed but not changed
• The blue fields in the Summary sheet present the results
• The input fields are separated in 5 categories

Input Fields in Summary sheet

Output: describes how much electricity the plant will be generating and where the electricity will be used
• Total capacity in kWp DC
• Annual insolation in kWh/m2
• Performance ratio of the system
• Annual degradation of the modules
• Percent self-use. This describes how much of the electricity produced will be used by the customer. The balance of the electri

Income and rates: describes how much the plant will earn either through avoided spending or sell to grid
• Customer tariff: the tariff the customer pays for his electricity. Time of use variation is not covered in this model
• Feed in Tariff: the tariff the customer will receive for the electricity sold into the grid
• Carbon credit: if applicable in R/kWh
• Tax rate: for corporate customer. Can be set to 0% for private customer
• Inflation adjustment: this is used on all tariffs and operational cost

Investment & installation: captures all upfront cost

• Turnkey EPC
• Grid connection. If included in Turnkey EPC, set this to R0
• Project development: all cost to prepare for the installation
• Other initial cost if applicable
• Decommission: if applicable, cost after 20 years

Expenses: captures all recurring cost throughout the lifetime of the investment
• Upkeep: yearly cost to operate and maintain the plant
• Allowance for component change as average over the 20 years
• Rooftop lease if applicable
• Insurance premium as % of initial investment

Finance structure: describes how the investment is being financed

• Senior Debt Leverage: % of bank finance. The resulting equity finance will be computed automatically. If no bank finance, set
• Cost of Debt Funding
• Maturity of debt funding in years
Ratios:
• Project Return Post Financing and Tax: This describes the return (interest) the investment earns over the 20 year period in %
• Pay Back: After how many years the investment has earned its initial capital outlay. Only in full year increments
 FINANCIAL MODEL ROOFTOP PV
Output
Total capacity 10 kWp
Annual insolation 1,890 kWh/m2
Performance ratio 83.0% Cash flow Waterfall
Annual degradation 0.30% 80,000
Yearly production (first year) 15,687 kWh 70,000
Percent self use 95%
60,000

Rand
Income and rates 50,000
Customer tariff (avoided electricity) 1.35 R/kWh 40,000
Feed in Tariff 0.65 R/kWh 30,000
Carbon credit 0 R/kWh
Tax Rate 28% 20,000
Inflation adjustment 7% per annum 10,000
0
Investment & installation 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2
Turnkey EPC 18,000 R/kWp Year
Grid connection 0 R
Project development 1,000 R
Other initial cost
Decommission
0
0
R
R/kWp
Pay Back Period in years
300,000
Expenses 250,000
Upkeep (first year) 400 R/kWp/annum 200,000

SA Rand
Allowance for component change (first year) 1,000 R/annum
Rooftop lease 0 R/annum 150,000
Insurance premium 0.8% of initial invest 100,000
50,000
Finance structure
Total investment 181,000 R 0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Senior Debt Leverage (% bank finance) 10% -50,000
Total debt 18,100 R
Cost of Debt Funding 11% -100,000
Maturity 6 years -150,000
Equity 90% -200,000
Total equity 162,900 R

Ratios
Project Return Post Financing and Tax 10.5%
ROI (Return on Investment) 10 years

ASTRUM ENERGY
sh flow Waterfall

Equity Payout
Debt Service
Tax Payments
OPEX

8 9 10 11 12 13 14 15 16 17 18 19 20 21
Year

Back Period in years

6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

ASTRUM ENERGY
Estimated cash flows
Cash In (Out)
Rand 1 2 3 4 5 6 7 8 9 10 11
Investment
Investment -181,000 0 0 0 0 0 0 0 0 0 0
Decommission 0 0 0 0 0 0 0 0 0 0 0
Total investment -181,000 0 0 0 0 0 0 0 0 0 0

Taxable earnings
Revenue
Energy produced (kwh) 15,687 15,640 15,593 15,546 15,499 15,452 15,405 15,358 15,311 15,263 15,216
Self use (kWh) 14,903 14,858 14,813 14,769 14,724 14,679 14,634 14,590 14,545 14,500 14,456
Feed in (kWh) 784 782 780 777 775 773 770 768 766 763 761
Customer tariff (R/kWh) 1 1 2 2 2 2 2 2 2 2 3
Feed in tariff (R/kWh) 1 1 1 1 1 1 1 1 1 1 1
Carbon credit (R/kWh) 0 0 0 0 0 0 0 0 0 0 0
Total revenue 20,628 22,006 23,476 25,043 26,715 28,498 30,400 32,429 34,593 36,901 39,362

Expenses
O&M -4,000 -4,280 -4,580 -4,900 -5,243 -5,610 -6,003 -6,423 -6,873 -7,354 -7,869
Facilities management -1,000 -1,070 -1,145 -1,225 -1,311 -1,403 -1,501 -1,606 -1,718 -1,838 -1,967
Land lease 0 0 0 0 0 0 0 0 0 0 0
Insurance premium -1,448 -1,448 -1,448 -1,448 -1,448 -1,448 -1,448 -1,448 -1,448 -1,448 -1,448
Depriciation -36,200 -36,200 -36,200 -36,200 -36,200 0 0 0 0 0 0
Interest on debt -1,991 -1,739 -1,460 -1,150 -806 -424 0 0 0 0 0

EBIT -166,820 15,208 16,303 17,470 18,713 20,038 21,449 22,952 24,554 26,260 28,078

Taxable operating income -24,011 -46,742 -68,099 -87,979 -106,271 -86,658 -65,209 -42,257 -17,703 8,557 28,078
Operating income taxes 0 0 0 0 0 0 0 0 0 -2,396 -7,862

Net operating cash flows 12,189 13,469 14,843 16,320 17,907 19,614 21,449 22,952 24,554 23,864 20,216

Net cash flows -168,811 13,469 14,843 16,320 17,907 19,614 21,449 22,952 24,554 23,864 20,216

Debt principal -2,287 -2,539 -2,818 -3,128 -3,472 -3,854 0 0 0 0 0

Earnings after tax and capital service -171,098 10,930 12,025 13,192 14,435 15,759 21,449 22,952 24,554 23,864 20,216
ROI -171,098 -160,168 -148,143 -134,952 -120,517 -104,758 -83,309 -60,357 -35,803 -11,939 8,277

Opex 6,448 6,798 7,173 7,573 8,002 8,461 8,952 9,477 10,039 10,640 11,284
Tax 0 0 0 0 0 0 0 0 0 2,396 7,862
Debt Service 4,278 4,278 4,278 4,278 4,278 4,278 0 0 0 0 0
Cash to Equity 9,902 10,930 12,025 13,192 14,435 15,759 21,449 22,952 24,554 23,864 20,216
Total Revenue 20,628 22,006 23,476 25,043 26,715 28,498 30,400 32,429 34,593 36,901 39,362
 12 13 14 15 16 17 18 19 20 21

0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0

15,169 15,122 15,075 15,028 14,981 14,934 14,887 14,840 14,793

14,411 14,366 14,321 14,277 14,232 14,187 14,143 14,098 14,053
758 756 754 751 749 747 744 742 740
3 3 3 3 4 4 4 5 5
1 1 2 2 2 2 2 2 2
0 0 0 0 0 0 0 0 0
41,987 44,787 47,773 50,957 54,353 57,975 61,838 65,958 70,351

-8,419 -9,009 -9,639 -10,314 -11,036 -11,809 -12,635 -13,520 -14,466

-2,105 -2,252 -2,410 -2,579 -2,759 -2,952 -3,159 -3,380 -3,617
0 0 0 0 0 0 0 0 0
-1,448 -1,448 -1,448 -1,448 -1,448 -1,448 -1,448 -1,448 -1,448
0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0

30,015 32,078 34,275 36,616 39,110 41,766 44,596 47,610 50,820

30,015 32,078 34,275 36,616 39,110 41,766 44,596 47,610 50,820 0

-8,404 -8,982 -9,597 -10,253 -10,951 -11,695 -12,487 -13,331 -14,230 0

21,611 23,096 24,678 26,364 28,159 30,072 32,109 34,279 36,591

21,611 23,096 24,678 26,364 28,159 30,072 32,109 34,279 36,591 0

0 0 0 0 0 0 0 0 0 0

21,611 23,096 24,678 26,364 28,159 30,072 32,109 34,279 36,591 0

29,888 52,984 77,662 104,026 132,185 162,257 194,366 228,645 265,236

11,972 12,709 13,497 14,341 15,243 16,209 17,242 18,348 19,531 0

8,404 8,982 9,597 10,253 10,951 11,695 12,487 13,331 14,230 0
0 0 0 0 0 0 0 0 0 0
21,611 23,096 24,678 26,364 28,159 30,072 32,109 34,279 36,591 0
41,987 44,787 47,773 50,957 54,353 57,975 61,838 65,958 70,351 0
 0 1 2 3
Capital service
Debt Capital 18,100 15,813 13,274 10,455
Interest (1,991) (1,739) (1,460)
Principal (2,287) (2,539) (2,818)
Straight Line Repayment (4,278) (4,278) (4,278)
 4 5 6 7 8 9

7,327 3,854 0 0 0 0
(1,150) (806) (424) 0 0 0
(3,128) (3,472) (3,854) 0 0 0
(4,278) (4,278) (4,278) 0 0 0
10 11 12 13 14 15

0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
16 17 18 19 20 21

0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
 Total 0 1 2 3
Percent / year 100% 0% 20% 20% 20%
Depreciation 181,000 0 -36,200 -36,200 -36,200
 4 5 6 7 8 9 10 11
20% 20% 0% 0% 0% 0% 0% 0%
-36,200 -36,200 0 0 0 0 0 0
12 13 14 15 16 17 18 19 20 21
0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
0 0 0 0 0 0 0 0 0 0