P50 and P90 Generation
Definition
P50 and P90 are probability-of-exceedance estimates of a project's annual energy production. The P50 is the level output is expected to exceed with 50% probability; the P90 is the level it is expected to exceed with 90% probability, so it is lower. NREL's example: 'a P50 value of 10,000 kWh for the annual output of a solar power system means that there is a 50 % likelihood that the system's output will be greater than 10,000 kWh.' The estimates come from years of weather data run through a performance model, usually in an independent engineer's report.
Why it matters
Projected returns in solar and wind offerings are usually built on P50 output. If production lands near P90 instead, distributions can fall while debt service stays the same, because lenders sized the loan to survive that case. Knowing which P-value a projection uses, and over what period, tells an investor how much of the forecast is the average case and how much cushion the lenders required before equity is paid.
Common misconceptions
- •P90 is not a floor. One year in ten is expected to come in below it.
- •A P50 projection is not conservative. It is the middle of the estimated range.
- •One-year and multi-year P90 values are different numbers; a projection should say which it uses.
- •P-values describe resource and model uncertainty; they do not by themselves cover outages, curtailment or contract terms.
Technical details
How the estimate is built
Long-term weather data for the site: irradiance for solar, wind speed for wind.
A performance model that converts weather into output, net of modeled losses.
A statistical distribution of annual output, from which the P50, P90 and P99 are read.
NREL's System Advisor Model implements two methods for computing the values from multi-year weather data.
Worked example: SB Energy's Pelican's Jaw project in Kern County, California
The project pairs an approximately 573 MWdc / 440 MWac solar facility with a 238 MWac / 954 MWh battery.
Solar coverage tests over the loan's hypothetical amortization: 1.25x on contracted cash flows at P50, 1.00x on contracted at P99, 1.75x on merchant cash flows at P50, 1.40x on merchant at P99.
A further P90 cash sweep test is set in the lender base case; the battery's contracted cash flows must cover debt service at least 1.20 times.
Source: financing agreement filed as exhibit 10.7 to SB Energy, Inc.'s S-1, September 2026.
Questions to ask
Which P-value do the projected distributions use?
Is it a one-year or multi-year figure, and who prepared it?
Which losses (availability, curtailment, degradation) are already deducted?
What happens to distributions if output lands at P90?
How investors apply the term
Investors usually apply this term by tying the definition back to the controlling documents and then asking which cash flows, rights, restrictions, or valuation assumptions it changes. A useful review looks at the term alongside fees, leverage, liquidity, reporting frequency, and manager discretion rather than treating it as a standalone concept.
The practical diligence test is simple: identify who benefits if the assumption is wrong, who has control when conditions change, and what evidence the investor receives after closing. Terms that cannot be reconciled to documents, cash movements, and monitoring data should be treated as marketing shorthand until proven otherwise.
Frequently asked questions
- Why do lenders use P90 or P99 instead of P50?
- Because debt has to be repaid in poor years as well as average ones. NREL notes that banks and investors 'often require P50 and P90 values' to judge 'a project's ability to service its debt obligations.' In SB Energy's Pelican's Jaw financing, the solar project's contracted cash flows must cover debt service at least 1.25 times at the P50 production level and at least 1.00 times at the P99 level.
- What is the difference between a one-year and a ten-year P90?
- A one-year P90 is the output expected to be exceeded in any single year nine times in ten. A ten-year P90 applies to average output over ten years, and because good and bad years offset, it sits closer to the P50. Pelican's Jaw defines its P50, P90 and P99 levels 'over a one-year period of time,' taken from tables in the independent engineer's report.
- Is P50 the expected output?
- It is the median estimate, not a promise. Actual output also depends on availability, curtailment, degradation and grid limits, which the estimate may or may not include. Investors should check which losses the P50 already deducts.
- Where do P-values appear in a deal?
- In the independent engineer's energy yield report, in the lender's base case, and in loan covenants. They also appear, often only as P50, in sponsor projections shown to equity investors.