Asset value calculation

The current value of an asset that is managed by the Reserve is defined as the Net Present Value of its expected future cash flow, discounted at an opportunity rate equivalent to the Secured Overnight Financing Rate index plus the Project’s opportunity rate. The specific opportunity rate depends on the Project. As a general guideline, it is set to 6.0% for Utility-scale Projects (like Solar Farms), and 7.5% for self-consumption Projects, however, the precise value will depend on the risk assessment of every Project.

The opportunity rate that is set for every Project can be subject to community proposals through the Unergy Protocol governance system.

In order to calculate the value of an asset, an estimation of the energy price is needed. For a Solar Farm project that sells energy to the electricity Grid, a long-term energy price estimation should be made, since its value depends on the energy price in the spot market. For a Self-Consumption project, the price is agreed upon before the Project starts operation.

Financial model assumptions

In every country where the Reserve owns Projects, a consulting process with an independent third-party contractor with relevant experience in the local market will give a long-term estimation of the main macroeconomic assumptions used for the financial models. This estimation will be used to update the expected future cash flows of the Projects into the Reserve.

The consultancy results will be publicly accessible through the Unergy Platform, which then can be used by anyone to compare with the financial model of the Projects and assess their validity.