Geothermal Energy Break-Even Analysis: $145K Monthly Revenue

Fixed costs $123.8K/mo Year 1 base

Contribution margin 74% After variable costs

Break-even revenue $167.3K/mo Monthly target

Break-even timing Month 1 Launch month

Break-even calculator

Use this to test monthly revenue, direct costs, and overhead against break-even for a geothermal project.

Lean Base Full

Monthly revenue Revenue sets the margin available to cover fixed costs. $ Low run rate Mature run rate Variable expenses These are direct costs that rise with output and sales volume. $ Light direct costs Heavy direct costs

Money available to cover fixed costs $1,828,000 $2,150,000 revenue - $322,000 variable expenses

Margin ratio

85%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead contribution margin must cover. $ Lean overhead Scaled overhead

Break-even chart Revenue Total costs

Which geothermal expenses stay fixed, and which move with power sales?

Cost classification

Break-even only works if fixed overhead stays separate from costs that rise with revenue or output. Keep startup capital out, or the operating break-even target will look much higher than the plant must actually cover each month.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Rent	Fixed	Use $12,000 per month as recurring overhead from Month 1 through Month 60.	Scaling rent with electricity MWh instead of treating it as a monthly floor.
General Insurance	Fixed	Use $5,000 per month in the fixed operating base.	Mixing insurance with plant output costs and understating break-even at low production.
Management and Administrative Salaries	Fixed	Use first-year salaried payroll of $1,060,000 per year, or about $88,333 per month.	Treating the CEO, finance, operations, resource, development, permitting, and admin roles as optional variable spend.
Sales & Marketing Commissions	Variable	Apply 2.5% of revenue in the first year, stepping down to 1.5% by the fifth year.	Combining commissions with the separate $4,000 monthly marketing campaign budget.
Regulatory Compliance & Reporting	Variable	Apply 1.5% of revenue in the first year, falling to 0.8% by the fifth year.	Parking it in fixed overhead and missing the revenue-linked reporting burden.
Wellfield Maintenance	Variable	Model as 2.5% of revenue, plus track related unit costs where production volume drives service work.	Using only the per-MWh workover line and ignoring the revenue-based maintenance load.
Direct Plant Labor	Semi-variable	Separate the output-linked portion from salaried management; direct plant labor is tied to production activity.	Putting all labor into fixed payroll and overstating margin as MWh volume rises.
Capacity Market Fee	Semi-fixed	Use $2,000 per capacity unit and step it with capacity availability, not monthly revenue.	Spreading capacity fees as a flat revenue percentage or loading exploration and drilling capital into operating break-even.

How does break-even shift across lean, base, and full geothermal operating cases?

Scenario table

Lean, base, and full cases all clear operating break-even because revenue scales faster than variable cost. The cash pinch is still Month 9, when build spend pushes minimum cash to negative $18,952K.

Planning assumptions only; output, prices, and timing can move the result.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean geothermal case	$2.15M	$291K	$124K	86.5%	$1.74M	Strong cushion; operating break-even is already covered.
Base geothermal case	$3.75M	$524K	$124K	86.0%	$3.10M	Wide operating cushion, but build spend still drives cash stress.
Full geothermal case	$6.17M	$804K	$143K	87.0%	$5.22M	Best cushion of the three; break-even sits far below planned output.

What breaks this geothermal break-even plan?

Stress test

At the base plan, monthly revenue of about $2.15M covers about $123.8K of fixed costs and $308K of variable costs, so break-even sits near $145K. The real risk is a sharp power-price drop, curtailment, or more unplanned workovers.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$145K	$2.01M cushion	Strong cushion if output holds.
Revenue shortfall	Monthly revenue falls 95% to $107.5K.	$145K	$37.5K gap	Power revenue slippage pushes you below break-even.
Fixed-cost pressure	Fixed monthly costs rise 15% to $142.4K.	$166K	$1.98M cushion	Higher overhead still works if revenue stays on plan.
Margin pressure	Variable expense rate rises 5 points to 19.3%.	$154K	$2.00M cushion	Workovers or compliance costs can trim margin fast.
Combined pressure	Revenue falls 95%, fixed costs rise 15%, and variable rate rises to 19.3%.	$177K	$69K gap	Small misses stack up and break the cushion.

What should the founder verify before committing to geothermal drilling and plant spend?

Founder checklist

Use the model to test the project before you lock drilling, land, or equipment spend. The Year 1 plan can work only if output, pricing, and ramp timing hold, because the Month 9 cash trough is the real stress point.

1Reservoir Output200k MWh

Verify the reservoir can support the Year 1 plan of 200,000 MWh, or the break-even case weakens fast.

2Launch Pricing$75 / $18 / $12

Check that power, renewable energy credit, and carbon deals clear at the modeled prices, since those sales fund launch revenue.

3Contribution Margin90% CM

Here’s the quick math: about $25.8M of Year 1 revenue against about $2.44M of direct and variable costs leaves most of each dollar before fixed overhead.

4Fixed Load$1.49M/yr

Keep fixed overhead near the model's $1.49M a year, made up of about $1.06M in salaries and $426K in office and admin costs.

5Capacity Ramp50 units

Confirm interconnection can support the Year 1 capacity plan of 50 units and that staffing still matches the Month 4 to Month 9 build window before the $4M equipment order.

6Cash Trough-$18.95M

Approve reserves for the Month 9 cash low of about negative $18.952M, or the project can stall long before payback.