Electricity Generation Break-Even Analysis: $247K Monthly Revenue

Fixed costs $95.5K/mo Monthly overhead base

Contribution margin 82.6% After variable costs

Break-even revenue $115.6K/mo Revenue needed monthly

Break-even timing Month 1 First profit month

Break-even calculator

Use this calculator to test monthly revenue against direct variable costs and the fixed cost base.

Lean Base Full

Monthly revenue This is the monthly sales value before direct costs. $ Lower sales Higher sales Variable expenses Fuel, grid, and market fees move with output. $ Lower costs Higher costs

Money available to cover fixed costs $13,935,969 $16,590,438 revenue - $2,654,469 variable expenses

Margin ratio

84%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base break-even must cover. $ Lower base Higher base

Break-even chart Revenue Total costs

Which electricity generation expenses are fixed, and which move with output or sales?

Cost classification

Your break-even is only useful if fixed overhead and run-linked charges stay separate. Here, $95.5k/month in fixed overhead behaves very differently from fuel at 12.0% of first-year revenue and staffing that moves in FTE steps.

Expense	Cost	Break-Even Treatment	Common Mistake
Plant operations software	Fixed	Carry $15,000 per month from Month 1 through Month 60 as baseline overhead.	Spreading it across units as if it falls when dispatch drops.
Insurance premiums	Fixed	Include $25,000 per month in fixed overhead before calculating output needed to break even.	Treating coverage as optional during low-output months.
Property taxes	Fixed	Model $18,000 per month as a plant-readiness charge, not a sales-linked charge.	Linking taxes to megawatt-hour volume instead of asset ownership.
Fuel costs	Variable	Apply the revenue percentage by year: 12.0% in the first year, falling to 10.0% by Year 5.	Entering fuel as a flat monthly line and hiding dispatch margin risk.
Grid and transmission fees	Variable	Apply 5.0% of revenue in the first year, stepping down to 4.0% by Year 5.	Treating recurring grid access as fixed when the fee base moves with sales.
Market transaction fees	Variable	Apply the stated percentage to the relevant revenue stream, including 0.1% for base energy and 0.15% for peak energy.	Using one blended fee rate across all services without checking the revenue mix.
Plant staffing	Semi-fixed	Keep the base team staffed from Month 1, then add engineers, technicians, operators, and finance staff in FTE steps as output scales.	Treating payroll as fully variable even though the plant needs covered shifts at lower dispatch.
Maintenance activity	Semi-variable	Keep the base technician team in place, then layer in run-hour items such as chemicals, lubricants, sensors, and minor parts.	Modeling all maintenance as fixed and missing the parts that rise with operating hours.

How does break-even change from lean to full operating scale?

Scenario table

Break-even stays covered in all three cases because monthly power sales rise faster than fixed overhead. The real question is cushion: lean is tighter, while base and full cases add more room for fuel and dispatch swings.

Planning figures only; actual break-even will move with fuel, dispatch mix, and grid fees.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean operating case, Year 1	$1.28M	$224k	$203k	82.5%	$851k	Covered easily, with a solid cushion.
Base operating case, Year 3	$1.66M	$264k	$228k	84.1%	$1.17M	Strong coverage, so break-even risk stays low.
Full operating case, Year 5	$1.95M	$279k	$241k	85.7%	$1.43M	Best cushion; fixed costs are well covered.

What breaks the break-even cushion for this power plant?

Stress test

Year 1 revenue sits far above break-even, but outages, weak dispatch, lower realized power price, fuel cost pressure, and added compliance overhead can chip away at the cushion.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$246.6k	$12.53M cushion	Base case clears break-even by a wide margin.
Revenue shortfall	Year 1 revenue slips 1% from the opening plan.	$246.6k	$12.40M cushion	Outages or weak dispatch trim about $128k of monthly sales.
Fixed-cost increase	Fixed overhead rises by $10k per month.	$258.7k	$12.52M cushion	Extra compliance or support staff lift the revenue floor.
Margin pressure	Variable expense rate rises 1 point to 18.5% of revenue.	$249.9k	$12.53M cushion	Fuel or transmission pressure eats contribution faster.
Combined pressure	Revenue falls 1%, variable expense rate rises 1 point, and fixed overhead rises $10k per month.	$261.9k	$12.39M cushion	This is the tightest case when outages and cost pressure hit together.

What should the founder verify before the first major grid and plant commitment?

Founder checklist

The model shows break-even in Month 1, but treat this as a go/no-go gate. The big commitments only make sense if grid access, build scope, staffing, and contracted sales still clear the $203.4K monthly fixed load and the Month 12 cash trough.

1Grid access$20.0M

Confirm interconnection readiness first, because the $20.0M grid infrastructure spend only works if power can move to market.

2Build scope$150.0M

Lock the plant construction scope before the $150.0M build commit, and include the environmental package so change orders do not blow up cash use.

3Turbine buy$75.0M

Use signed specs and milestone acceptance before the $75.0M turbine and generator order, because this is the hardest spend to unwind.

4Control stack$10.0M

Finish the SCADA setup, fuel delivery plan, and spare-parts list before the $10.0M control spend, so dispatch does not start blind or idle.

5Core crew$1.295M/yr

Have the 13-person operating crew in place before commercial dispatch, because Year 1 payroll is $1.295M and the plant needs people on shift.

6Sales cover82.6% CM

Check that contracted energy, capacity, frequency, and voltage sales still cover the $203.4K monthly fixed base and help absorb the Month 12 cash trough of ($189.6M).