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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 .. N/A
Utilization Factor Generation Profile Nominal capacity factor Singleowner user_capacity_factor .. N/A
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 - Other Incentives - One-time Grants Etc
Total O&M Cost, Inflation Rate Operating Costs Fixed operating cost, Escalation rate set to Inflation Rate × -1 Singleowner om_fixed, om_fixed_escal .. N/A
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 .. N/A
Inflation Rate Financial Parameters → Analysis Parameters Inflation rate Utilityrate5 inflation_rate .. N/A
Discount Rate Financial Parameters → Analysis Parameters Real discount rate Singleowner real_discount_rate .. N/A
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 .. N/A
Fraction of Investment in Bonds Financial Parameters → Project Term Debt Debt percent Singleowner debt_percent .. N/A
Inflated Bond Interest Rate Financial Parameters → Project Term Debt Annual interest rate Singleowner term_int_rate .. N/A
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
Starting Carbon Credit Value, Ending Carbon Credit Value, Carbon Escalation Rate Per Year, Carbon Escalation Start Year Revenue → Capacity Payments Fixed amount, Capacity payment amount Singleowner cp_capacity_payment_type = 1, cp_capacity_payment_amount
Starting Heat Sale Price, Ending Heat Sale Price, Heat Escalation Rate Per Year, Heat Escalation Start Year Revenue → Capacity Payments Fixed amount, Capacity payment amount Singleowner cp_capacity_payment_type = 1, cp_capacity_payment_amount
Starting Cooling Sale Price, Ending Cooling Sale Price, Cooling Escalation Rate Per Year, Cooling Escalation Start Year 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).
State Investment Tax Credit Amount Incentives → Investment Tax Credit (ITC) State → Amount ($) Singleowner itc_sta_amount
Production Tax Credit Electricity Incentives → Production Tax Credit (PTC) Federal → Amount ($/kWh) Singleowner ptc_fed_amount .. N/A
Production Tax Credit Duration Incentives → Production Tax Credit (PTC) Federal → Term (years) Singleowner ptc_fed_term .. N/A
Production Tax Credit Inflation Adjusted, Inflation Rate Incentives → Production Tax Credit (PTC) Federal → Escalation (%/yr) Singleowner ptc_fed_escal If Production Tax Credit Inflation Adjusted = True, GEOPHIRES set's SAM's PTC escalation rate to the inflation rate. SAM applies the escalation rate to years 2 and later of the project cash flow. Note that this produces escalation rates that are similar to inflation-adjusted equivalents, but not exactly equal.
Other Incentives + One-time Grants Etc Incentives → Investment Based Incentive (IBI) Other → Amount ($) Singleowner ibi_oth_amount .. N/A

.. <RST_Comment> .. Comment entries of ".. N/A" render as blank in the final RST, by design. .. This entry value is required because m2r2 (https://pypi.org/project/m2r2/) seems to choke and bail on rendering .. the entire table when blank comment entries are blank. Make sure to check this doesn't happen when making changes .. to this file by running tox -e docs and opening dist/docs/SAM-Economic-Models.html in your browser! .. .. TODO: Generate this programmatically (like schema generator) to prevent drift between code and documentation. .. </RST_Comment>

Limitations

  1. The following power plant types/surface applications are not supported: Heat Pump, District Heating, and Reservoir Thermal Energy Storage (SUTRA). Subcritical ORC, Supercritical ORC, Single Flash, Double Flash, Industrial heat, and Absorption Chiller power plant types are supported.
  2. Add-ons with electricity and heat are not currently supported. (Add-ons CAPEX, OPEX, and profit are supported.)

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.

Carbon Credits

Carbon Credits Revenue example web interface link

Carbon credits revenue is included in Capacity payment revenue ($). It is calculated according to the CalculateCarbonRevenue function in Economics.py.

See relevant parameters and outputs in GEOPHIRES Parameters documentation:

  1. Do Carbon Price Calculations
  2. Starting Carbon Credit Value
  3. Ending Carbon Credit Value
  4. Carbon Escalation Start Year
  5. Carbon Escalation Rate Per Year
  6. Current Grid CO2 production
  7. Total Avoided Carbon Emissions

End Uses and Surface Applications

SAM Economic Models support a variety of geothermal end-use options and surface applications, extending beyond pure electricity generation to include:

  • Electricity
  • Direct-Use Heat
  • Cogeneration (Combined Heat and Power; CHP)
  • Cooling (Absorption Chiller)

For detailed information on how these different configurations are modeled financially, including cash flow reporting adjustments, CHP cost allocation methodologies, and configuration-specific examples, see the SAM Economic Models: End Uses and Surface Applications documentation.

Examples

  1. Case Study: 500 MWe EGS Project Modeled on Fervo Cape Station | Case Study Documentation
  2. SAM Single Owner PPA: 50 MWe
  3. 50 MWe with Add-ons
  4. 50 MWe with Royalties
  5. Royalty Schedule & Supplemental Payments
  6. Multiple Construction Years
  7. Carbon Credits
  8. Cogeneration (Combined Heat and Power; CHP)
  9. CHP with Carbon Credits
  10. Direct-Use Heat
  11. Cooling (Absorption Chiller)
  12. SAM Single Owner PPA: 400 MWe BICYCLE Comparison

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