Financial Model, Hydrogen, Renewable Energy, Solar, Wind

5-year Financial Projections, Budgeting, Business Valuation, Cash Flow Analysis, Cash Flow Projections, Debt Schedule, Discount Rate, Dividends, Excel, Financial Analysis, Financial Debt, Financial Feasibility, Financial Model, Financial Modeling, Financial Planning, Financial Projections, Financial Ratios, Financial Reporting, Financial Statements, Financing, Forecast, Forecasting, Investor Cash Flows, Investors, IRR (Internal Rate of Return), Payback Period, Profitability Analysis, Sensitivity Analysis, Startup Financial Models, Three Statement Model | Three Financial Statements, Uses and Sources of Funds

This financial plan template is based on bottom-up assumptions for a green hydrogen plant using assumptions such as the daily design capacity, electricity, and water consumption per kg of hydrogen produced. The model allows using electricity produced from different sources to determine how much it costs to produce green hydrogen energy and how much the green hydrogen’s pricing should be.

Other key assumptions include the start year of operations, tax assumptions, total capital expenditures, uses and sources of funds, and assumptions related to the use of debt financing. These assumptions are then translated into a detailed 40-year financial plan that allows the business owners and management to see how the business should perform from a financial perspective over the following years.

The green hydrogen financial model template is presented in various charts and tables that allow an easy understanding of the feasibility of green hydrogen production by using the electrolysis process to convert electricity and water into hydrogen and oxygen. Calculations of the relevant financial ratios and financial metrics (such as IRR, Payback Period, NPV, and Levelized Cost of Green Hydrogen per kg) and a debt schedule are also included.

Why choose this Green Hydrogen Financial Model Template?

The main reasons why you should choose this template are the following:

• Flexible Units and Labels: Installed capacity for electricity production can be changed between MW and kW, currency can be inputted and changed, and the label Green Hydrogen can be changed to Yellow Hydrogen.
• Pure Hydrogen Plant Model: We also have financial model templates available that model integrated hydrogen + solar plants or hydrogen + wind park plants. This template excludes any add-on and only offers a pure focus on the Hydrogen part. This template excludes how the electricity is produced precisely to simplify the analysis.
• Electricity from different Sources: The template allows us to estimate the percentage split when using electricity produced from different sources at different prices.
• Levelized Costs of Hydrogen: This allows users to understand the Levelized costs at net present value.
• Detailed Financial Plans: The spreadsheet is designed logically, outlining the calculations of revenues and costs, which adds to the transparency and understanding of the model.
• Advanced Tax Models: The Green Hydrogen plant can potentially benefit from Tax advantages. The model includes an advanced tax model to consider the effect of various possible tax incentives for such plants.

Green Hydrogen (Electrolysis) Financial Model Template Structure

The financial model is structured with instructions and formulas that are simple and easy to follow, which allows users to run simulations by varying the input assumptions. The elements of this financial model template are enumerated below:

Instructions and Terms contain the cell color codes and the terms and abbreviations used.

Executive Summary and Detailed Summary present the charts and graphs to understand the business plan for Green Hydrogen better and to answer significant questions such as:

• Will producing green hydrogen through electrolysis result to profit?
• What are the costs of producing green hydrogen?
• How should green hydrogen pricing be?
• How much green hydrogen is produced?

The spreadsheet includes a 10-year summary of the following:

• Projected Green Hydrogen Production Financial Statements overview – Income Statement, Balance Sheet, and Cash Flows Statement.
• Levered and Unlevered Free Cash Flows calculating key financial feasibility metrics such as the Internal Rate of Return (IRR), Payback Period, Net Present Value (NPV)
• Uses and Sources of Funds, and Debt Financing
• Lifetime Profit Distribution and Cash Flows
• Investor Summary
• Levelized Cost of Green Hydrogen per kg

Assumptions that will translate this financial model into a business plan for green hydrogen production:

• General Settings
  • Currency
  • Project Details – Name, Location
  • Project Timeline – Green Hydrogen Production Operation Years and Plant Lifetime
  • Net Working Capital
  • Inflation and Price Escalation
  • Simple Tax Assumptions
• Green Hydrogen Plant Assumptions
  • Green Hydrogen Plant Operating Capacity
  • Electricity Sources and Consumption
  • Green Hydrogen Price and Other Income Assumptions
  • Direct Costs of producing Green Hydrogen
  • Employee Positions and Expenses
  • Operating Expenses
  • Advanced Tax Assumptions
  • Capital Expenditures, CAPEX Schedule and Maintenance per year
• Uses and Sourced of Funds
  • Cash Reserve and Net Working Capital
• Debt Financing Schedule
  • Loan Terms
  • Repayment Schedule – Calculated or Manual
  • Interest – Cash or Accrued
• Investors
  • Equity Ownership and Investment Percentages
  • Development (Phase 1) and Buy & Hold (Phase 2)
• Dividend Payout Assumptions

The Operating Model worksheet contains the operational forecasts for producing green hydrogen through electrolysis:

• Green Hydrogen Production Volume
• Pricing and Revenue
• Costs to produce Green Hydrogen – Direct Costs, Employee Expenses, and OPEX
• Fixed Assets Schedule – Initial CAPEX, Spending allocation, Maintenance, and Depreciation

Monthly Budget Allocation is prepared to have a detailed assessment of the financial feasibility of the green hydrogen plant. This five-year monthly budget is formulated to start calculation from the selected first target year and operating month of the green hydrogen production process. Using the monthly budget, users may distribute the monthly production target, annual revenue, and costs for the months that occurred using percentages. Also presented in this spreadsheet are the calculations of green hydrogen production profit margins and the presentation of Monthly Free Cash Flows (Unlevered and Levered).

Financials contains the comprehensive calculations of the 40-year financial forecast planning and feasibility of Green Hydrogen Production through electrolysis:

• Financial Statements – Income Statement, Balance Sheet, Cash Flow Statement
• Financial Ratios and Green Hydrogen Plant Economic Analysis
• Unlevered and Levered Free Cash Flows Statement, Funding Required, and Financial Metrics
• Divided Policy Schedule
• Simple and Advance Tax Model Summary
• Levelized Costs of Electricity and Hydrogen per kg

Advanced Tax Models present detailed calculations of the State and Federal Income Taxes of the Green Hydrogen Plant, considering the different tax rates and tax credits.

The Debt Schedule is specially prepared to be presented to banks and investors for funding purposes. It contains financial ratios the banks and investors want to see when evaluating a project’s feasibility. The debt schedule summarizes the drawdowns and repayments based on the assumptions.

Investors’ Cash Flow is prepared to show the calculations of the Equity Multiple and Investors’ IRR, which helps determine if their funding and equity stake percentages during the Buy & Hold and Development Phases would result in profit.

Sensitivity Analysis determines how variables such as prices, expenses, and inflation affect the IRR of a chosen parameter. Users may select Unlevered or Leveled IRRs, and Investors. 

Get a thorough understanding of Green Hydrogen Production from Electrolysis!

Deciding whether to invest or not in producing green hydrogen through electrolysis requires an in-depth understanding of how the economics of a Green Hydrogen plant work. A well-prepared and comprehensive financial plan template that offers the relevant inputs, analysis, charts, and tables makes it much easier to obtain a solid understanding of your next Green Hydrogen Plant project.

Developing detailed financial projections can clarify the expected costs, pricing scenarios, and resulting profit margins. This detailed financial forecast also explains the funding required from debt and equity financing sources and the expected financial key metrics, such as the Payback Period or the Internal Rate of Return.

This unique financial model template contains valuable tools that allow users to analyze the financial plan of starting a green hydrogen business in detail by testing various scenarios and assessing how it affects the project’s viability. The financial model will also help business owners answer how Hydrogen Prices affect the profitability and returns of such a plant.

The current model version 1.7, is available in two Excel versions and a PDF Demo Preview:

• Excel Version – Consists of sample figures in the assumptions
• Excel Null Version – No values in the assumption sheet
• PDF Version – Outlines the details of the model structure

File types:

.xlsx (MS Excel)
.pdf (Adobe Acrobat Reader)