A flat 15-year PPA at 48.8 €/MWh delivers your 10% equity IRR. Minimum DSCR is 1.2, below the ≈1.30 lenders require, so they would size less debt and the price would need to be 52.7 €/MWh.
PPA price for 10% equity IRR
48.8€/MWh
4.88 €-cents/kWh, 15 years
Project IRR at that price
7.2%
unlevered, after tax
Price for DSCR ≥ 1.3
52.7€/MWh
debt-sizing constraint
Price for 7% project IRR
47.8€/MWh
unlevered benchmark
Min DSCR
1.2
LCOE (6% WACC)
45.2€/MWh
Annual energy (year 1)
67,500MWh
capacity factor 15.4%
Total capex
€30,000,000
debt 21,000,000 €
Equity payback
14 yr 10 mo
Cash flows
| Year | MWh | Price (€/MWh) | Revenue | Opex | Debt service | Tax | To equity | DSCR |
|---|---|---|---|---|---|---|---|---|
| 1 | 67,500 | 48.8 | 3,296,237 | 600,000 | 1,867,318 | 8,247 | 820,672 | 1.44 |
| 2 | 67,230 | 48.8 | 3,283,052 | 612,000 | 1,867,318 | 11,046 | 792,688 | 1.42 |
| 3 | 66,961 | 48.8 | 3,269,920 | 624,240 | 1,867,318 | 14,238 | 764,124 | 1.41 |
| 4 | 66,693 | 48.8 | 3,256,840 | 636,725 | 1,867,318 | 17,846 | 734,951 | 1.39 |
| 5 | 66,426 | 48.8 | 3,243,813 | 649,459 | 1,867,318 | 21,895 | 705,141 | 1.38 |
| 6 | 66,161 | 48.8 | 3,230,838 | 662,448 | 1,867,318 | 26,409 | 674,663 | 1.36 |
| 7 | 65,896 | 48.8 | 3,217,914 | 675,697 | 1,867,318 | 31,415 | 643,484 | 1.34 |
| 8 | 65,633 | 48.8 | 3,205,043 | 689,211 | 1,867,318 | 36,942 | 611,572 | 1.33 |
| 9 | 65,370 | 48.8 | 3,192,223 | 702,996 | 1,867,318 | 43,019 | 578,890 | 1.31 |
| 10 | 65,109 | 48.8 | 3,179,454 | 717,056 | 1,867,318 | 49,678 | 545,402 | 1.29 |
| 11 | 64,848 | 48.8 | 3,166,736 | 731,397 | 1,867,318 | 56,953 | 511,068 | 1.27 |
| 12 | 64,589 | 48.8 | 3,154,069 | 746,025 | 1,867,318 | 64,878 | 475,848 | 1.25 |
| 13 | 64,330 | 48.8 | 3,141,453 | 760,945 | 1,867,318 | 73,491 | 439,699 | 1.24 |
| 14 | 64,073 | 48.8 | 3,128,887 | 776,164 | 1,867,318 | 82,831 | 402,574 | 1.22 |
| 15 | 63,817 | 48.8 | 3,116,371 | 791,687 | 1,867,318 | 92,939 | 364,427 | 1.2 |
| 16 | 63,561 | 60.6 | 3,849,541 | 807,521 | 1,867,318 | 252,987 | 921,715 | 1.49 |
| 17 | 63,307 | 61.8 | 3,910,826 | 823,671 | 1,867,318 | 279,507 | 940,329 | 1.5 |
| 18 | 63,054 | 63 | 3,973,086 | 840,145 | 1,867,318 | 307,119 | 958,504 | 1.51 |
| 19 | 62,802 | 64.3 | 4,036,337 | 856,948 | 0 | 335,878 | 2,843,512 | — |
| 20 | 62,551 | 65.6 | 4,100,596 | 874,087 | 0 | 345,302 | 2,881,207 | — |
| 21 | 62,300 | 66.9 | 4,165,877 | 891,568 | 0 | 654,862 | 2,619,447 | — |
| 22 | 62,051 | 68.2 | 4,232,198 | 909,400 | 0 | 664,560 | 2,658,239 | — |
| 23 | 61,803 | 69.6 | 4,299,575 | 927,588 | 0 | 674,397 | 2,697,590 | — |
| 24 | 61,556 | 71 | 4,368,024 | 946,140 | 0 | 684,377 | 2,737,508 | — |
| 25 | 61,310 | 72.4 | 4,437,563 | 965,062 | 0 | 694,500 | 2,778,001 | — |
| 26 | 61,064 | 73.8 | 4,508,209 | 984,364 | 0 | 704,769 | 2,819,076 | — |
| 27 | 60,820 | 75.3 | 4,579,980 | 1,004,051 | 0 | 715,186 | 2,860,743 | — |
| 28 | 60,577 | 76.8 | 4,652,893 | 1,024,132 | 0 | 725,752 | 2,903,009 | — |
| 29 | 60,334 | 78.3 | 4,726,967 | 1,044,615 | 0 | 736,470 | 2,945,882 | — |
| 30 | 60,093 | 79.9 | 4,802,220 | 1,065,507 | 0 | 747,343 | 2,989,371 | — |
- After the 15-year PPA the plant sells at the merchant capture price (45 €/MWh in year-1 money, +2%/yr). Solar and wind capture prices usually sit below baseload averages because of cannibalisation.
- Pay-as-produced PPA assumed (the buyer takes all output). Baseload or shaped PPAs shift profile and balancing risk to the seller, so add those costs to opex.
- Debt is modelled as a fixed annuity over the tenor. In practice lenders size debt to a target DSCR (≈1.20–1.35 contracted), which may cap gearing below your input.