Wind System Costs

The Wind System Costs page allows you to specify the costs of a wind power project.

Note. 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 SAM website, https://sam.nrel.gov/cost.

NREL Capital Cost Model

The default capital cost values are from the NREL Capital Cost model, which has a different set of cost assumptions for land-based and offshore wind farms. You can populate the default values with costs for each type of wind farm.

Land-based installation

Choose this option to use default capital cost values from the NREL Capital Cost Model for land-based wind farms.

When you choose the Define the turbine characteristics below option on the Turbine page, you can choose Automatically estimate land-based costs to allow SAM to calculate capital cost values based on the wind turbine characteristics.

Shallow offshore installation (<30m)

Choose this option to use default values for offshore wind farms.

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.

For each direct cost category, you can specify the cost in $/kW of wind farm capacity, a fixed cost in $, or a cost per turbine in $/turbine. If you specify more than one cost, for example a foundation cost in both $/kW and $/turbine, SAM adds the values together to calculate the total category cost.

Turbine Cost

The cost of a single turbine.

Foundations

Material, labor, and other costs associated with building turbine foundations for the entire wind farm.

Electrical Infrastructure

Wiring, transformer, and other costs associated with electrical equipment on the wind farm.

Contingency (%)

A percentage of the sum of the total turbine, foundations, and electrical infrastructure costs, that you can use to account for expected uncertainties in direct cost estimates.

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.

You can specify each indirect capital cost category as a cost per kW of wind farm capacity, fixed cost, or percentage of the total direct cost. If you assign more than one cost to a category, for example a $/kW and fixed amount for the Transportation and Installation category, SAM adds the values to calculate the total Transportation and Installation amount.

Engineer, Procure, Construct

Engineer-procure-construct costs, sometimes abbreviated as EPC costs, are costs associated with the design and construction of the project.

Project, Land, Miscellaneous

Costs associated with land purchases, permitting, and other costs.

Transportation and Installation

Costs associated with transporting and installing turbine equipment.

Ports, Staging, Scour, etc (offshore farms)

Offshore wind farm costs associated with transporting turbines from land to the project site.

Sales Tax (%)

SAM calculates the total sales tax amount by multiplying the sales tax rate that you specify on the Financing page by the percentage of direct costs you specify on the System Costs page:

Total Sales Tax = Sales Tax Rate × Percentage of Direct Cost × Direct Cost

For an explanation of the effect of sales tax on income tax, see Sales Tax on the Financing page topic for the financial model you are using (Residential, Commercial, Utility IPP, Single Owner, etc.)

Total Indirect Cost ( $)

The sum of the four indirect cost categories.

Total Installed Cost

The total installed cost is the project's investment cost that applies in year zero of the project cash flow. SAM uses this value to calculate loan amounts and debt interest payments based on inputs on the Financing page, and to calculate incentive amounts for investment-based incentives defined on the Incentives page and depreciation amounts on the Depreciation page.

Total Installed Cost ($)

The sum of total direct cost and total indirect cost.

Total Installed Cost per Capacity ($/kW)

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.

Operation and Maintenance Costs

Operation and Maintenance (O&M) costs represent annual expenditures on equipment and services that occur after the system is installed. SAM allows you to enter O&M costs in three ways: Fixed annual, fixed by capacity, and variable by generation. O&M costs are reported on the project cash flow in Years 1 and later..

For each O&M cost category, you can specify an optional annual Escalation Rate to represent an expected annual increase in O&M cost above the annual inflation rate specified on the Financing page. For an escalation rate of zero, the O&M cost in years two and later is the year one cost adjusted for inflation. For a non-zero escalation rate, the O&M cost in years two and later is the year one cost adjusted for inflation plus escalation.

For expenses such as component replacements that occur in particular years, you can use an annual schedule to assign costs to individual years. See below for details.

Fixed Annual Cost ($/yr)

A fixed annual cost that applied to each year in the project cash flow.

Fixed Cost by Capacity ($/kW-yr)

A fixed annual cost proportional to the system's rated or nameplate capacity.

Variable Cost by Generation ($/MWh)

A variable annual cost proportional to the system's total annual electrical output in AC megawatt-hours. The annual energy output depends on either the performance model's calculated first year value and the Year-to-year decline in output value from the Performance Adjustment page, or on an annual schedule of costs, depending on the option chosen.