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Utility-scale photovoltaics: rows of panels, a substation and an export line. The cheapest new generation there is, with no fuel and almost no operating cost. Not a regulated network but a low-cost generator: build the array, then earn generation × power price, often against a contracted PPA floor, for decades. Pick a real project below and follow the development, the model and a working returns model.
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Drag the sliders to see what earns the money: the capacity built, the power price (or PPA), and the capacity factor that turns sunshine into generation, all against a contracted floor.
Utility-scale solar is the cheapest new generation there is: rows of PV panels, a substation and a grid connection, with no fuel and almost no operating cost. The revenue is simple: generation × power price, where generation is capacity × hours × the capacity factor (how much of nameplate the irradiance and tracking realise over a year). Much of the output is typically sold under a power-purchase agreement (PPA or CfD) at a fixed price, a contracted floor, with the rest merchant. Because opex is tiny, the EBITDA margin is very high (often 80–90%): almost all of revenue is margin. The catch on the merchant slice is solar’s own price cannibalisation: when every plant generates at midday, the pool price during sunny hours falls. Returns hinge on the capex per MWp, the capacity factor and the price the power earns.
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See also the Solar farm simulator, which lets you build and run a plant interactively, and the Cash-flow & DCF model.