The relationship between solar module price and power station irr

What is a good IRR rate for a solar project?

While there’s no definitive “good” IRR rate, industry benchmarks can provide a general reference point. According to various reports, the average IRR for commercial solar projects in the United States can range from 10% to 15%. The best approach to determining a good IRR for a solar project is to consider the unique circumstances of your project.

How do I calculate IRR for a solar energy plant?

If you want to calculate IRR for a solar energy plant, assemble all the assumptions and variables that impact your project. Note that a major input is the price per kilowatt-hour charged by the local utility company. Let’s try a simple example.

How much IRR do solar farms deliver?

Solar farms typically deliver IRRs in the range of 5% to 8%, depending on installation costs, local energy pricing, and tax benefits (LEV, Shasta Power). At Shasta Power, we target a robust 18% IRR across the life of the investment by combining returns from multiple projects, securing PPAs, and maintaining capital efficiency.

What is the internal rate of return (IRR)?

This return rate is called the Internal Rate of Return or IRR. When you invest in a solar system, you receive non-taxable dividends each year in the form of the cash that is no longer being paid to the utility company.