Formula reference

These are the formulas behind the DFR-shortfall penalty, the CUF cap, grid charging and working-capital costs, and the return metrics on the 💹 Financials tab — worded the way Help ▸ User Guide / Formulas… states them inside the application itself. Every figure is derived from the 15-minute dispatch simulation, rolled up into an annual cash-flow model. For a one-line definition of each return metric instead of its formula, see Return metrics.

Return and value metrics

IRR (Internal Rate of Return) — the discount rate at which project NPV equals zero.

Equity IRR — the IRR of the equity cash-flow stream:

equity cash flow = EBITDA − interest − principal − tax (when levered) − reinvestment

In the final year this also adds terminal value and any DSRA release, net of remaining debt. Computed only when Enable debt (levered analysis) is on.

NPV (Net Present Value) —

NPV = sum, over every year, of (that year's cash flow ÷ (1 + discount rate) ^ year)

at the Discount Rate (NPV).

Payback — the year cumulative project cash flow first turns non-negative, linearly interpolated within that year. Discounted Payback applies the same rule to the discounted-cumulative cash flow instead.

DSCR (Debt-Service Coverage Ratio) —

DSCR = (EBITDA − tax (when levered) − reinvestment) ÷ (interest + principal)

for the year, reported as a minimum and an average across the debt tenor.

DSRA (Debt-Service Reserve Account) —

DSRA = (DSRA months ÷ 12) × (first year's interest + principal)

MoIC (Multiple on Invested Capital) —

MoIC = (sum of positive cash inflows) ÷ initial outlay

Initial outlay is Equity plus DSRA on a levered project, Total CAPEX otherwise.

PI (Profitability Index) —

PI = (NPV + CAPEX) ÷ CAPEX

A PI above 1 is value-accretive.

WACC (Weighted Average Cost of Capital) —

WACC = (equity share of funding × cost of equity) + (debt share of funding × interest rate × (1 − tax rate))

Cost of equity is taken as the Discount Rate (NPV). Computed only for levered projects.

Cost per unit of energy

LCOE (Levelised Cost of Energy) —

LCOE = (Total CAPEX + sum of discounted (OPEX + reinvestment) across years) ÷ sum of discounted (energy × 1000) across years

in Rs/kWh, on the energy basis chosen by LCOE Energy Basis on the 🏦 Finance tab:

LCOS (Levelised Cost of Storage) — the same shape as LCOE, but over BESS-only CAPEX, OPEX and reinvestment, divided by discounted battery-discharge throughput instead of delivered energy — the cost of every kWh that actually passes through the battery.

Revenue, penalty and cost formulas

DFR-shortfall penalty — per month, for each of the Peak, Off-Peak, Overall and 15-minute buckets:

shortfall (MWh) = max(target DFR × required MWh − delivered MWh, 0)
penalty = Penalty Multiplier × PPA Tariff × shortfall × 1000

That month's penalty is the greatest of (Peak penalty + Off-Peak penalty), the Overall penalty, or the 15-minute penalty.

Annual CUF cap — when Apply Annual CUF Cap is on:

cap (MWh) = cap % × Contracted Capacity × 8760

Energy up to the cap is paid at the PPA Tariff; energy above it is paid at the Export Price instead.

Grid-charging cost —

grid-charging cost = (sum, across the year, of grid-import MWh × Grid Charging Price × 1000) × an escalation factor

Applies always on a Standalone project; only as worst-case backup on a generation-backed one.

Payment-delay / working-capital carrying cost —

receivables = annual revenue × (Receivable Lag ÷ 365)
working-capital carrying cost = receivables × (Working-Capital Rate + WC Facility Fee − Late-Payment Surcharge)

Deductible, so it reduces EBITDA — and tax — each year. Zero when Receivable Lag is 0.

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