SAM Economic Models

GEOPHIRES SAM Economic Models leverage NREL’s SAM Financial Models by transforming GEOPHIRES parameters into SAM parameters and running the corresponding SAM model with PySAM.

SAM Single Owner PPA

Corresponding SAM Financial Model: Power Purchase Agreement (PPA): Single owner

Parameters

The following table describes how GEOPHIRES parameters are transformed into SAM parameters, as implemented in EconomicsSam.py. (Note that the source code implementation determines actual behavior in the case of any discrepancies.)

GEOPHIRES Parameter(s)

SAM Category

SAM Input(s)

SAM Module(s)

SAM Parameter Name(s)

Comment

Maximum Total Electricity Generation

Generation Profile

Nameplate capacity

Singleowner

system_capacity

Utilization Factor

Generation Profile

Nominal capacity factor

Singleowner

user_capacity_factor

Net Electricity Generation

AC Degradation

Annual AC degradation rate schedule

Utilityrate5

degradation

Percentage difference of each year’s Net Electricity Generation from Maximum Total Electricity Generation is input as SAM as the degradation rate schedule in order to match SAM’s generation profile to GEOPHIRES

Total CAPEX

Installation Costs

Total Installed Cost

Singleowner

total_installed_cost

Total CAPEX = Overnight Capital Cost + Inflation costs during construction + Interest during construction

Total O&M Cost, Inflation Rate

Operating Costs

Fixed operating cost, Escalation rate set to Inflation Rate × -1

Singleowner

om_fixed, om_fixed_escal

Royalty Supplemental Payments

Operating Costs

Fixed operating cost schedule

Singleowner

om_fixed

Royalty supplemental payments during the operational phase are added to the fixed operating cost according to the schedule.

Royalty Rate, Royalty Rate Escalation, Royalty Rate Escalation Start Year, Royalty Rate Maximum; Royalty Rate Schedule

Operating Costs

Variable operating cost

Singleowner

om_production

The royalty is modeled as a tax-deductible variable operating expense. GEOPHIRES uses the provided schedule, or calculates a schedule of $/MWh values based on the PPA price and Royalty Rate for each year, with optional escalation, escalation start year, and cap (maximum). This ensures the total annual expense in SAM accurately matches the royalty payment due on gross revenue.

Plant Lifetime

Financial Parameters → Analysis Parameters

Analysis period

CustomGeneration, Singleowner

CustomGeneration.analysis_period, Singleowner.term_tenor

Inflation Rate

Financial Parameters → Analysis Parameters

Inflation rate

Utilityrate5

inflation_rate

Discount Rate

Financial Parameters → Analysis Parameters

Real discount rate

Singleowner

real_discount_rate

Combined Income Tax Rate

Financial Parameters → Project Tax and Insurance Rates

Federal income tax rate: minimum of {21%, CITR}; and State income tax rate: maximum of {0%; CITR - 21%}

Singleowner

federal_tax_rate, state_tax_rate

GEOPHIRES does not have separate parameters for federal and state income tax so the rates are split from the combined rate based on an assumption of a maximum federal tax rate of 21% and the residual amount being the state tax rate.

Property Tax Rate

Financial Parameters

Property tax rate

Singleowner

property_tax_rate

Fraction of Investment in Bonds

Financial Parameters → Project Term Debt

Debt percent

Singleowner

debt_percent

Inflated Bond Interest Rate

Financial Parameters → Project Term Debt

Annual interest rate

Singleowner

term_int_rate

Starting Electricity Sale Price, Ending Electricity Sale Price, Electricity Escalation Rate Per Year, Electricity Escalation Start Year

Revenue

PPA price

Singleowner

ppa_price_input

GEOPHIRES’s pricing model is used to create a PPA price schedule that is passed to SAM.

Total AddOn Profit Gained

Revenue → Capacity Payments

Fixed amount, Capacity payment amount

Singleowner

cp_capacity_payment_type = 1, cp_capacity_payment_amount

Investment Tax Credit Rate

Incentives → Investment Tax Credit (ITC)

Federal → Percentage (%)

Singleowner

itc_fed_percent

Note that unlike the BICYCLE Economic Model’s Total capital costs, SAM Economic Model’s Total CAPEX is the total installed cost and does not subtract ITC value (if present).

Production Tax Credit Electricity

Incentives → Production Tax Credit (PTC)

Federal → Amount ($/kWh)

Singleowner

ptc_fed_amount

Production Tax Credit Duration

Incentives → Production Tax Credit (PTC)

Federal → Term (years)

Singleowner

ptc_fed_term

Production Tax Credit Inflation Adjusted, Inflation Rate

Incentives → Production Tax Credit (PTC)

Federal → Escalation (%/yr)

Singleowner

ptc_fed_escal

If Production Tax Credit Inflation Adjusted = True, GEOPHIRES set’s SAM’s PTC escalation rate to the inflation rate. SAM applies the escalation rate to years 2 and later of the project cash flow. Note that this produces escalation rates that are similar to inflation-adjusted equivalents, but not exactly equal.

Other Incentives + One-time Grants Etc

Incentives → Investment Based Incentive (IBI)

Other → Amount ($)

Singleowner

ibi_oth_amount

Limitations

  1. Only Electricity end-use is supported

  2. Add-ons with electricity and heat are not currently supported. (Add-ons CAPEX, OPEX, and profit are supported.)

  3. Carbon Revenue is not currently supported, but will be in future releases. See tracking issue for details.

Multiple Construction Years

Multiple Construction Years example web interface link

For projects with extended development timelines, GEOPHIRES SAM Economic Models improve financial accuracy by simulating the pre-revenue construction phase. SAM Economic Models account for the timing of capital deployment (Construction CAPEX Schedule), inflation, and Interest During Construction (IDC) based on the value of Construction Years parameter. The simulation calculates a capitalized cost at the Commercial Operation Date (COD; Year 1), ensuring that the final depreciation basis, debt sizing, and resulting metrics (LCOE, IRR, NPV) correctly reflect the time value of money during construction.

See SAM Economic Models: Multiple Construction Years documentation.

Add-Ons

Add-Ons example web interface link

SAM Economic Models incorporate add-ons directly, unlike other GEOPHIRES economic models, which calculate separate extended economics. Total Add-on CAPEX is added to Total CAPEX. Total Add-on OPEX is added to Total operating and maintenance costs. Total AddOn Profit Gained per year is treated as fixed amount Capacity payment revenue.

Add-ons CAPEX, OPEX, and profit are supported. Add-ons with electricity and heat are not currently supported, but may be supported in the future.

Royalties

SAM Economic Models can model royalty agreements where compensation is paid to a third party (the “royalty holder”). GEOPHIRES supports two complementary mechanisms for these agreements: production-based royalties (a percentage of the project’s gross revenue) and supplemental royalty payments (a scheduled fixed cash flow, such as option payments or land leases).

From the perspective of the project developer (Single Owner), these payments are modeled as tax-deductible expenses to ensure accurate after-tax metrics (NPV, IRR, etc.). The two mechanisms are mapped to SAM differently:

  1. Production-based royalties: GEOPHIRES translates the percentage rate into a year-by-year schedule for SAM’s Variable operating cost (om_production) input, calculated against the PPA price to accurately reflect a cut of the gross revenue.

    1. Production-based royalties example web interface link

  2. Supplemental payments: These are split between the construction and operational phases. Payments made during construction are capitalized into the project’s basis (added to the total installed cost and debt-financed), while payments during the operational phase are treated as fixed O&M expenses (om_fixed).

    1. Supplemental royalty payments example web interface link (also includes production-based royalties specified as a schedule)

Input Parameters:

  1. Royalty Rate (production-based royalties): The percentage of the project’s gross annual revenue paid to the royalty holder. It can be optionally escalated by providing Royalty Rate Escalation and capped with Royalty Rate Maximum, starting at Royalty Rate Escalation Start Year.

    1. Alternatively, you can provide Royalty Rate Schedule to explicitly define the rates over time using the scheduling syntax (see below), beginning at Year 1 (beginning of operations).

  2. Royalty Supplemental Payments: A scheduled cash flow of absolute payments (in M$) made to the royalty holder. This is useful for modeling option payments, land leases, or minimum fixed royalties.

    1. Scheduling Syntax: Schedules are defined using a <value> * <years> duration format. If a duration is omitted, that value becomes the terminal value and repeats for the remainder of the project.

    2. Example:1.0 * 3, 0.1results in $1M/year for the first 3 years, dropping to $100k/year for all remaining years.

    3. Note: The Royalty Supplemental Payments schedule begins at the first year of construction (unlike Royalty Rate Schedule) . If you wish to defer payments until operations begin, pad the front of your schedule with zeros (e.g., 0.0 * 2, 0.5 for a 2-year construction period).

  3. Royalty Holder Discount Rate (optional): The discount rate used to calculate the Net Present Value (NPV) of the royalty holder’s income stream. This is separate from the project’s main discount rate to reflect the different risk profiles of the two parties.

Output Parameters:

  1. Cash Flow:

    1. The production-based royalty rate schedule is displayed in the Royalty rate (%) line item, and its corresponding dollar expense is included in O&M production-based expense ($).

    2. Operational supplemental payments are rolled into the O&M fixed expense ($) line item. Pre-revenue supplemental payments are capitalized into the project’s Installed cost ($).

  2. Average Annual Royalty Cost: The developer’s average annual royalty expense over the project’s lifetime after construction is complete (Year 1). The same value is also output as Royalty Holder Average Annual Revenue.

  3. Royalty Holder Total Revenue: The total gross (pre-tax), undiscounted royalty income over the project’s lifetime.

  4. Royalty Holder NPV: The pre-tax Net Present Value of the royalty holder’s income stream, calculated using the Royalty Holder Discount Rate. This is a pre-tax value because the model does not account for the royalty holder’s specific tax liabilities.

Examples

Case Study: 500 MWe EGS Project Modeled on Fervo Cape Station

Web interface link

Documentation: Case Study: 500 MWe EGS Project Modeled on Fervo Cape Station.

SAM Single Owner PPA

  1. SAM Single Owner PPA: 50 MWe

  2. SAM Single Owner PPA: 50 MWe with Add-ons

  3. SAM Single Owner PPA: 50 MWe with Royalties

  4. SAM Economic Model: Royalty Schedule & Supplemental Payments

  5. SAM Economic Model Multiple Construction Years

SAM Single Owner PPA: 400 MWe BICYCLE Comparison

Web interface link

Re-creating SAM Economic Model Results in the SAM Desktop Application

First, open src/geophires_sam_economics/Generic_400_MWe.sam in the SAM desktop application.

Next, run GEOPHIRES for your input, e.g.:

python -mgeophires_x my-geophires-input.txt

Then check src/geophires_x/all_messages_conf.log for the SAM Economics Parameter Mapping entry:

23-05-2025 10:09:35 : INFO : EconomicsSam : calculate_sam_economics : 151 : (Process Details : (1378, MainProcess), Thread Details : (8589068352, MainThread)): SAM Economics Parameter Mapping:
-----------------  --------------------  -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
SAM Module         Parameter             Value
Custom Generation  analysis_period       20
Custom Generation  user_capacity_factor  90.0
Utility Rate       inflation_rate        2.0
Utility Rate       degradation           [1.2734946600673935, 0.7001040275842613, 0.5267634676194525, 0.4244824247238818, 0.3529717582311231, 0.29852256883429373, 0.2548483024454293, 0.21855974702202877, 0.18762922644042462, 0.1607514026827296, 0.13703877682895466, 0.11586181507372084, 0.09675857340703789, 0.07938054662917803, 0.06345865490418974, 0.0487810281945756, 0.03517801101748528, 0.02251175220012943, 0.010668799824934945, 0.0]
Single Owner       analysis_period       20
Single Owner       total_installed_cost  264606243.76608825
Single Owner       om_fixed              [7193902.821741002]
Single Owner       om_fixed_escal        -2.0
Single Owner       system_capacity       59020.69007804236
Single Owner       federal_tax_rate      [21.0]
Single Owner       state_tax_rate        [7.0]
Single Owner       itc_fed_percent       [30.0]
Single Owner       property_tax_rate     0.0
Single Owner       ppa_price_input       [0.08, 0.08, 0.08322, 0.08644, 0.08966, 0.09288, 0.0961, 0.09932, 0.10254, 0.10576, 0.10898000000000001, 0.1122, 0.11542, 0.11864, 0.12186, 0.12508, 0.1283, 0.13152, 0.13474, 0.13796]
Single Owner       debt_percent          40.0
Single Owner       real_discount_rate    8.0
Single Owner       term_tenor            20
Single Owner       term_int_rate         5.0
Single Owner       ibi_oth_amount        0.0
-----------------  --------------------  -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

You can then manually enter the parameters from the logged mapping into the SAM desktop app.

Using SAM Economic Models with Existing GEOPHIRES Inputs

In many cases, all you need to do to use SAM Economic Models for your existing GEOPHIRES inputs is to change the Economic Model parameter value. For example, if your GEOPHIRES .txt file contained the following:

# *** Financial Parameters ***
Economic Model, 2, -- Standard Levelized Cost Model
Discount Rate, .05
Plant Lifetime, 25

You would change it to:

# *** Financial Parameters ***
Economic Model, 5, -- SAM Single Owner PPA Economic Model
Discount Rate, .05
Plant Lifetime, 25

For inputs with the BICYCLE economic model, such as the following:

# *** Financial Parameters ***
Economic Model, 3, -- BICYCLE
Inflated Equity Interest Rate, .08
Plant Lifetime, 30

Change Economic Model and replace Inflated Equity Interest Rate with a suitable Discount Rate and Inflation Rate:

# *** Financial Parameters ***
Economic Model, 5, -- SAM Single Owner PPA Economic Model
Discount Rate, .08
Inflation Rate, .03
Plant Lifetime, 30