Work out feed in tariff revenue instantly with clear inputs, formula shown and shareable results.
Feed-in tariff revenue is generation times the guaranteed rate, summed over the contract term with output declining by the annual degradation rate. Because the tariff is usually fixed in nominal terms, its real value falls with inflation over a twenty-year term — an important point when comparing against market-linked contracts.
Feed-in revenue
Year n revenue = year 1 generation x (1 - degradation)^(n-1) x tariff rate; lifetime = sum over term
It removes price risk but forgoes upside and is eroded by inflation unless indexed. Compare the fixed tariff against a forward curve and an inflation assumption before choosing.
The plant sells at prevailing market or export rates, usually much lower. Terminal value assumptions should be conservative, and repowering may be more attractive than continued operation.