Energy yield and power revenue
P50 energy, degradation, PPA and merchant revenue.
By Surojit Chakraverti, founder of L3VLUP and an investor running a long-short healthcare and technology equities strategy.
On this subject: energy yield and power revenue.Updated 22 October 2026
Part of project finance and infrastructure models, with the models, labs and guides around it.
What it does
The top of a renewables model. Energy each year is capacity times hours times the P50 net capacity factor, after availability and a degradation curve; scenarios then scale it toward a P90 or a better year. A share of that energy is sold under a power purchase agreement at an escalating price for its tenor, the rest at the merchant curve times the technology’s capture rate, with green certificates and capacity payments beside it. Splitting contracted from uncontracted revenue matters because the lenders size on them differently.
Where it lives
The same schedule in each model that carries it, with the rows to open. Open a model in the browser, go to the sheet, and click the lines.
- Assumptions, rows 14–21: Energy yield, base case, Energy yield, upside case, Energy yield, downside case, Energy yield, selected scenario…
- Assumptions, rows 28–44: Capacity, AC, Hours per year, Solar: DC to AC ratio, Wind: DC to AC ratio…
- Assumptions, rows 47–59: Solar: PPA price, O1, Wind: PPA price, O1, PPA price, O1, selected technology, PPA escalation, annual…
- Operations, rows 6–9: Year of operation, After commercial operation flag, Operating year flag, Debt tenor flag
- Operations, rows 12–15: Degradation factor, Energy, P50, Contracted share of energy, PPA price
- Operations, rows 18–21: PPA revenue, P50, Merchant energy revenue, P50, Green certificate revenue, P50, Capacity payments
- Operations, rows 24–25: Merchant energy revenue, Revenue, selected case
What a reviewer looks for
- No degradation, so a solar farm’s late years are overstated.
- Merchant output priced at the baseload price rather than the capture price.
- A contracted share that carries on after the PPA ends.
- P90 applied to every year of a twenty-year forecast as if one bad year repeated.
Learn it, then build it
Read · Guide · 12 min
Project Finance Modelling: Cash Flow Waterfalls, DSCR Sizing and the Debt Sculpt
Read · Guide · 10 min
Scenario and Sensitivity Architecture: Building a Model That Can Be Stress-Tested
Vocabulary: CFADS (Cash Flow Available for Debt Service), Debt Capacity.