Payment delay and working capital
How Receivable Lag turns into a working-capital carrying cost, and where its impact on IRR and NPV is reported.
A PPA tariff payment isn't received the moment it's billed. Receivable Lag, on the 🏦 Finance tab, models the gap in days between billing and payment as a recurring finance cost — the working-capital carrying cost — deducted from EBITDA, and so from tax, every year it applies.
How the cost is built
receivables = annual revenue × (lag days ÷ 365)
carrying cost = receivables × (working-capital rate + facility fee − late-payment surcharge)Working-Capital Rate is the interest rate on the loan carrying those receivables; WC Facility Fee adds a fee on top, as a percentage of receivables; Late-Payment Surcharge is interest the offtaker owes on the overdue amount, and offsets the cost rather than adding to it. All four fields, with their defaults and ranges, are on Financing and discounting.
Receivable Lag left at its own default disables the working-capital cost entirely — the formula above comes to zero exactly when the lag does.
Effect on IRR and NPV
Where the model reports a working-capital cost, it reports it two ways: the total cost itself, and what it did to IRR and NPV, compared with the same run without that lag. Both appear on the 💹 Financials tab's headline, and in the exported report, only when Receivable Lag is set above zero. See The financials table.