Test debt coverage
Use Cashflow Analysis to test whether modeled cash available for debt service covers the payments due under the configured loan.
Set the inputs
Open Configure and check principal, interest rate, tenor, amortization, operating costs, covenant and the percentile used in the schedule. Replace defaults with the terms you intend to assess.
The default loan terms for solar are an 18-year tenor and a 1.25x covenant. For wind, they are a 15-year tenor and a 1.35x covenant. The default operating cost for solar is $23K per MW per year, based on NREL’s 2024 Annual Technology Baseline.
Read the results
| Metric | Interpretation |
|---|---|
| DSCR | Cash available for debt service divided by debt service. At 1.25x, the model has $1.25 available for each $1 due. |
| Min DSCR | The lowest downside-case (P10) DSCR shown in the analysis. |
| Covenant Status | The count of displayed heatmap periods below the configured covenant. |
| Debt / CFADS | Loan principal divided by one year’s modeled cash available for debt service. |
| LTV | Loan principal divided by the plant value used in loan settings. |
Worked example
In this year-one example, $17.35M of revenue less $5.52M of operating costs gives $11.83M of modeled CFADS. Dividing by $8.48M of debt service gives approximately 1.40x base-case DSCR. The separate downside result is 1.14x, below the 1.25x covenant.
The model defines CFADS as revenue minus operating costs. Check that this definition matches the definition in your loan agreement.
Review timing and repayment
Switch between Forward 12M, 3-Year and Project Lifecycle views, then inspect the quarterly heatmap and Financial Schedule. Level Principal repays the same principal each year; Level Payment holds debt service constant; Sculpted shapes debt service to cash flow at a target DSCR.
Check the configured assumptions and actual covenant terms before interpreting the displayed breach count.
Saving inputs and recalculation
Cashflow Analysis updates the results when you change an input.
In this workflow, you change several inputs and then click Save. One recalculation starts for all saved changes. While it runs, the previous results stay visible with an Updating label. See model runs and result status.
Check whether the selected context is Baseline or a what-if Scenario before changing loan or contract assumptions.