Project Finance 101 covers how solar projects get paid for — where the money comes from, how returns are calculated, and what has to be true for a project to reach financial close.
What you will learn
- How a solar project makes money, and the difference between CAPEX, OPEX and lifecycle costs.
- How a sources-and-uses table and a project financial model are built.
- Cash flow, IRR, NPV and payback — and what sensitivity analysis actually tells you.
- The capital stack: sponsor equity, debt, and tax equity.
- How lenders size debt and what they require.
- Tax credits, depreciation, and how credit transfers work.
- How risk and returns are evaluated, and how base, downside and upside cases are built.
- What an investment committee looks for.
- The path from term sheet through due diligence to financial close and notice to proceed.
Course outline — 32 lessons
- Project Finance: The Big Picture
- How Projects Create Value
- Project Costs: CAPEX, OPEX and Lifecycle Costs
- Understanding Cash Flow
- The Capital Stack: Sources and Uses
- Sources and Use Overview
- Sponsor Equity
- Project Finance Structures
- Return Metrics: Quick Review
- IRR, NPV and Payback
- Evaluating Risk and Returns
- Anatomy of a Project Finance Model
- Basics of Financial Models
- Financial Modeling Inputs
- Base, Downside and Upside Cases
- Sensitivity Analysis
- Debt Financing
- How Lenders Size Debt
- Construction Debt vs. Term Debt
- Covenants, Reserves & Cash Traps
- Tax Credits and Depreciation
- Tax Equity Basics
- Tax Credit Transfers
- Tax Equity vs. Tax Credit Transfers
- Project Finance Process
- Financing Due Diligence
- Investment Committee Basics
- Investment Committee Checklist
- From Term Sheet to Financial Close: CP Checklist
- Financial Close Process
- Closing Transactions
- Financial Close and NTP
Who this course is for
Developers and originators who need to know whether a deal will finance. Analysts building or reviewing models. Engineers and construction managers who want to understand why the schedule and the budget are what they are. Anyone joining a solar finance team.
What you need to know first
No finance background assumed. The course builds the vocabulary as it goes.
What comes next
Power Purchase Agreements (PPAs) goes deep on the contract that underpins project revenue. Solar Legal 101 covers the financing documents and lender rights.
The course is free. Create an account to start.