Installation Costs are costs associated with installing the system, and include equipment, labor, engineering, permitting, and any other costs that apply in Year 0 of the project cash flow. Some costs, such as debt-related and sales tax costs are specified on the Financial Parameters page.
SAM uses the variables on the Installation Costs page to calculate the project investment cost and annual operating costs reported in the project cash flow and used to calculate cost metrics.
Recurring costs that apply in Years 1 and later of the project cash flow are on the Operating Costs page.
Variable values in boxes with white backgrounds are values that you can edit. Boxes with blue backgrounds contain calculated values or values from other pages that SAM displays for your information.
SAM provides the categories under Direct Capital Costs and Indirect Capital Costs for your convenience to help keep track of project installation costs. Only the Total Installed Cost value affects the cash flow calculations, so you can assign capital costs to the different cost categories in whatever way makes sense for your analysis. For example, you could assign the cost of designing the array to the module cost category or to the engineering category with equivalent results. After you assign costs to the categories, you should verify that the total installed cost value is what you expect.
Notes.
The default cost values that appear when you create a file or case are intended to illustrate SAM's use. The cost data are meant to be realistic, but not to represent actual costs for a specific project. For more information and a list of online resources for cost data, see the technology pages on the SAM website.
The Installation Costs page only available for cases with a cash-flow-based financial model. It is not available with the No Financial Model option or the LCOE Calculator financial model.
Direct Capital Costs
A direct capital cost represents an expense for a specific piece of equipment or installation service that applies in year zero of the cash flow.
Note: Because SAM uses only the total installed cost value in cash flow calculations, how you distribute costs among the different direct capital cost categories does not affect the final results.
A direct capital cost represents an expense for a specific piece of equipment or installation service that applies in year zero of the cash flow.
Note: Because SAM uses only the total installed cost value in cash flow calculations, how you distribute costs among the different direct capital cost categories does not affect the final results.
Module, $/Wdc or $/Unit
You can specify the module cost either in $/Wdc or $/unit:
•Dollars per watt multiplied by System nameplate capacity from the PV System page, or
•Dollars per unit, where the number of modules is assumed to be one.
Inverter, $/Wac or $/Unit
For PVWatts, the inverter cost is either dollars per watt AC or DC, or dollars per inverter:
•Dollars per watt DC multiplied by the system nameplate capacity from the PV System page, or
•Dollars per watt AC multiplied by the system nameplate capacity and divided by the DC to AC Derate Factor on the System Design page, or
•Dollars per unit where the number of inverters is assumed to be one.
Battery rated power, $/kW
Battery cost per unit of Battery rated power, which is the maximum discharge power (kW AC) from the Battery Storage page.
Battery rated capacity, $/kWh
Battery cost per unit of Battery rated capacity, which is the nominal bank capacity (kWh DC) from the Battery Storage page.
Note. If the battery is not enabled on the Battery Storage page, SAM sets the battery costs to zero.
The other direct capital cost categories, Balance of system equipment, Installation labor, and Installer margin and overhead can be specified using five units. SAM calculates the total amount for each category as shown below.
$
A fixed cost in dollars.
PV $/Wdc
A cost proportional to the PV array's DC nameplate capacity, equal to the System nameplate size on the on the PV System page.
Battery $/kW
A cost proportional to the battery's nominal power rating, equal to the Maximum charge power (AC) on the Battery Storage page.
Fuel Cell $/kW
A cost proportional to the fuel cell stack nameplate capacity, equal to the Cell stack nameplate on the Fuel Cell page.
Contingency, %
A percentage of the sum of the module, inverter, balance-of-system, installation labor, and installer margin and overhead costs that you can use to account for expected uncertainties in direct cost estimates.
Total Direct Cost, $
The sum of module, inverter, balance-of-system, installation labor, installer margin and overhead costs, and contingency costs.
Indirect Capital Costs
An indirect cost is typically one that cannot be identified with a specific piece of equipment or installation service.
Note: Because SAM uses only the total installed cost value in cash flow calculations, how you distribute costs among the different indirect capital cost categories does not affect the final results.
The five indirect cost categories, Permitting and environmental studies, Engineering and developer overhead, Grid interconnection are each calculated as the sum of four values expressed in the following units:
% of Direct Cost
A percentage of the Total direct cost value shown under Direct Capital Costs.
PV $/Wdc
A cost proportional to the PV array's DC nameplate capacity, equal to the System nameplate size on the on the PV System page.
Battery $/kW
A cost proportional to the battery's nominal power rating, equal to the Maximum charge power (AC) on the Battery Storage page.
Fuel Cell $/kW
A cost proportional to the fuel cell stack nameplate capacity, equal to the Cell stack nameplate on the Fuel Cell page.
$
A fixed cost in dollars.
Land Costs
SAM calculates the total land cost as the sum of Land area, Land purchase, and Land prep. and transmission. The land cost categories use the Cost $/acre category in addition to the categories for the other indirect costs.
Note. The land area input is independent of the PV array size or other input parameters. If you want to include land area costs in your analysis, be sure to specify a land area in acres that is appropriate for your system's design.
Sales Tax
Sales tax basis, %
The percentage of total direct cost used to the calculate sales tax amount.
SAM calculates the total sales tax amount by multiplying the sales tax rate from the Financial Parameters page by the sales tax basis on the Installation Costs page:
Total Sales Tax ($) = Sales Tax Rate (%) × Sales Tax Basis (%) × Total Direct Cost ($)
For an explanation of the effect of sales tax on income tax, see Sales Tax on the Financial Parameters topic for the financial model you are using (Residential, Commercial, Single Owner, etc.)
Total Installed Cost
The total installed cost is the sum of all of the direct and indirect capital costs and sales tax. SAM uses this value to calculate the project's net capital cost, which is the total installed cost less any cash incentives on the Incentives page and plus any additional financing costs from Financial Parameters page.
Total installed cost, $
The sum of total direct cost and total indirect cost.
Total installed cost per capacity
Total installed cost divided by the total system rated or nameplate capacity. This value is provided for reference only. SAM does not use it in cash flow calculations.
The units depend on the type of system: For photovoltaic systems: $/Wdc, for standalone battery systems: $/Wac, for other systems: $/kWac.
