Advanced Financial Modeling for Renewable Energy - ( US )

Learn how to transform lengthy, lumpy Excel formulas into modular calculation blocks for financial models, using lookup and iferror to compute base rates, all-in rates, and quarterly interest payments.

Link inputs across worksheets in financial models using the equals sign and absolute and relative references, preserving accurate links on timing and interest payment sheets.

Learn how to avoid daisy chains in financial modeling by linking cells with row-anchored links, using copy-paste linking, and color-coding exported (red) and imported (blue) links to simplify navigation.

Learn how placeholders store temporary inputs on calculation sheets and later link to the input worksheet, replacing hard coded numbers, using the course’s second approach of reallocating inputs.

Master essential Excel shortcut keys for financial modeling, including navigation across worksheets, copy and paste, linking, anchoring formulas, and quick chart creation with F11.

Learn to anchor Excel formulas using absolute and relative references, locking key cells with dollar signs and F4, to accurately compute widget revenue across periods.

Explore how Excel represents dates as serial numbers, validate dates, and use date, edate, and end-of-month functions to build quarterly models and manage timelines and flags.

Learn to apply the Excel if function in financial modeling, test a logical condition, and return one or zero based on dates, with and, or, and nested ifs.

Learn to use vlookup, lookup, and index match in Excel to convert vertical CPI data into a horizontal time series and compare exact versus approximate matches, extracting inflation rates.

Explore how to use Excel max and min functions to extract positive and negative cash flow values in financial modeling, and learn sign adjustment by multiplying by minus one.

Learn to use the SUMIF function in Excel to consolidate semiannual data into annual revenue, and apply it to maintenance capex retirement value and accumulated depreciation across asset life.

Compare corporate finance with project finance by forming a ring-fenced special purpose vehicle that raises nonrecourse debt and equity, relying on project cash flows and collateral.

Explore why project finance uses a separate SPV to provide nonrecourse, ring-fenced financing with secured long-term revenue from a PPA, enabling high leverage and risk allocation.

This lecture explains how a partnership spv in the United States uses pass-through taxation, detailing general and limited partners’ roles, liabilities, and tax outcomes.

Review the tax equity SPV model for a 90 MW solar project, detailing revenue from a 25-year PPA and 5-year merchant sales, and the cash-flow waterfall to partner dividends.

Learn how the production tax credit, set per kilowatt hour, is calculated, phased out, and carried forward, with wind benefiting more than solar under construction start and safe harbor rules.

Explore the Inflation Reduction Act’s production tax credit for solar and wind, based on output, with base 0.6 cents/kWh, full 0.03/kWh, and bonuses for domestic content and energy communities.

Model wind project production tax credits (PTC) by establishing a 10-year window from start, calculating the PTC flag, and computing credits at $15 per MWh using net generation and escalation.

Understand investment tax credit (ITC) for solar projects, a credit on eligible costs with rates from 30% in 2019 to 10% thereafter, and how it compares to production tax credit.

Explore the Inflation Reduction Act ITC for solar, wind, standalone storage (5 kWh+), and interconnection equipment, with 6–70% credits earned upfront, depreciation reduction of 50%, five-year recapture.

Model investment tax credit eligibility and its impact on taxable basis in solar projects. Assume 80 percent eligible costs and 30 percent ITC, with timing and depreciation considerations.

Examine how Inflation Reduction Act boosts the investment tax credit with adders, lifting ITC from 6% to 70% through prevailing wage, apprenticeship, domestic content, energy community, and environmental justice criteria.

Explore special or disproportionate allocations in US partnerships, assigning tax benefits to one party while cash benefits go to another, and understand economic effect and substantiality tests.

Examine the tax equity flip structure in renewable projects, including yield-based and fixed flips, the sponsor and tax equity investor roles, and ITC implications for allocations and IRRs.

Review how tax and cash items are allocated in wind and solar tax equity flip structures, covering PTC and ITC allocations, safe harbor rules, and period shifts.

Model the SPV's partnership tax and cash benefits by linking revenue, tax credits, and dividends, and set the operations period flag as groundwork for wind and solar flip flags.

Model flip period flags for wind and solar projects, with wind flips at year 10 and solar flips at year 1 and 7, using project switch and preflight flags.

Model tax and cash benefits allocation percentages to the tax equity partner for wind and solar projects using a project switch, preflight and post flip periods, and conditional formulas.

Model tax and cash benefits allocations to the sponsor for wind and solar projects, setting opposite percentages to the tax equity partner across pre‑flip and post‑flip periods.

Model the tax and cash benefits allocations to the tax equity partner and sponsor by applying SPV tax benefit allocations to taxable income and tax credits before adjustments.

Explain fair market value in tax equity deals for renewable energy projects, showing the sale to a partnership, the developer fee, ITC impact, depreciation, and the IRS safe harbor.

Learn how Inflation Reduction Act tax credits transferability enables direct sale of ITC and PTC, with no recapture risk for BTC, and a bridge-loan financing process secured by IRS certification.

Model sponsor benefits and back leveraged loan flags in tax equity, including grace period and repayment timing, switching between 50% and 99% capacity factors, linking cash flows via data tables.

Model debt service for P50 and P99 cases by linking cash benefits to the sponsor during the loan repayment period, computing DCR targets, and sizing the construction loan.

Model the back leveraged interest rate and debt sizing to determine the construction loan size by calculating the all in rate, discount factor, and present value of debt service.

Model the construction funding on a monthly basis, calculating construction and equipment costs for wind turbines, balance of plant, interconnection equipment, and development costs, then apply a 10 percent contingency.

Learn how a wind project uses three funds: bridge loan, construction loan, and sponsor equity to finance construction and equipment costs within leverage constraints, guided by a macro-driven workflow.

Model construction and bridge loan financing costs, including upfront fees at financial close, commitment fees on undrawn balances, and interest during construction, using base rate and loan margins.

Link financing costs to project CapEx by resolving circular references with a leverage and funding macro that copies live values into hardcoded inputs, using semi-automatic calculations.

Learn to model PPE and paid-in capital at the SPV by linking construction funding, upfront fees, IDC, and equity investments to tax depreciation and SPV operations.

Model the back leveraged loan by converting the construction loan at completion, then compute opening balances, interest payments, and constrained principal repayments using a completion flag and debt service.

Explore how economic effect validates special allocations under IRS rules and how section 704(b) capital accounts track losses, income, and cash distributions in a tax equity partnership.

Model capital accounts for the tax equity partner and sponsor, allocate the ITC taxable basis reduction, and verify tax benefits to size tax equity investment.

Model the tax equity partner's capital account by importing tax equity investment from spivvy worksheet and linking ITC basis reductions, allocations, and cash distributions to compute the interim closing balance.

Model the sponsor capital account with the tax equity account, including construction loan conversion to back leveraged loan at holdco level, and implement a capital account check with opening balance.

Examine deficit restoration obligation (daro) and its role in capital account treatment during liquidation, and learn how qualified income offset (QIO) rebalances losses and income.

Analyze the Partner A capital account under DRO and QIO provisions, tracing deficits, loss reallocations, and income cures across years.

Model the deficit restoration obligation (dro) for the tax equity partner by calculating the maximum dro amount, establishing the dro availability flag, and tracking dro available, used, and deficit.

Model tax equity loss reallocations to the sponsor by annualizing quarterly losses and aligning them with capital account deficits and available losses.

Model the sponsor DRO with a five percent limit; compute the DARO amount, DRO used, and sponsor GIRoA availability across 10 years using the tax equity formulas.

Model loss reallocations from the sponsor to the tax equity partner using the same formulas, linking annualized income or loss allocations to sponsor and tax equity capital accounts.

Model income reallocation from sponsor to tax equity partner in the post daro period, applying 99 percent of annualized sponsor income for wind or solar scenarios against the tax equity capital account deficit.

Model the taxable income or loss post reallocations for the tax equity partner and sponsor. Link pre-reallocation amounts with loss reallocations from capital accounts.

Master how the outside basis evolves with partner equity, losses, income, and cash distributions to determine gains, taxable income, and seven thirty one a gains plus 750 step-ups.

Explore outside basis and capital accounts, including equity, losses, and 731a implications, then compute NPVs of tax benefits before reallocations, after reallocations, and after suspended losses.

Model the outside basis capital accounts for the tax equity partner and sponsor, aligning with seven zero four B, including investments, ITC basis reductions, and suspended losses.

Model suspended losses for tax equity outside basis by setting up a suspended losses account, tracking generated and used losses, and applying them when the outside basis turns positive.

Create the annualized outside basis capital account using income losses, cash inflows and outflows, and flags to model distributions in excess of outside basis for the tax equity partner.

Model distributions in excess of outside basis for the tax equity partner, linking the outside basis capital account, post reallocations, taxable income, 754 step up, and 704 B capital accounts.

Model sponsor suspended losses using the same formulas as the tax equity partner, with inputs from the sponsor's outside basis capital accounts and the interim closing balance.

Model sponsors' distributions in excess of basis within tax equity calculations, convert quarterly numbers to annualized figures, and link sponsor outside basis capital accounts and 754 step-up.

Model the 754 step-up depreciation and allocate it between tax equity partner and sponsor, linking allocations to 704 be capital accounts and using a 15-year depreciation life.

Complete the 754 step-up depreciation modeling by allocating 750 step-ups to the tax equity partner and sponsor, linking depreciation to seven B capital accounts and partnership income calculations.