Tidal Power Break-Even Analysis: About $182K Monthly Revenue

Fixed costs $156.4K/mo Base + payroll

Contribution margin 86–91% After variable costs

Break-even revenue $182K/mo Launch target

Break-even timing Month 13 Model break-even

Break-even calculator

This calculator tests monthly revenue, variable expenses, and fixed costs against break-even for a tidal power project.

Lean Base Full

Monthly revenue Monthly sales set the margin pool that covers fixed costs. $ Low sales High sales Variable expenses Use direct costs that rise with each dollar of revenue. $ Light cost Heavy cost

Money available to cover fixed costs $1,333,542 $1,541,667 revenue - $208,125 variable expenses

Margin ratio

87%

Covers fixed costs

Yes

Fixed monthly costs Use the monthly cost base that margin must cover. $ Lean base Heavy base

Break-even chart Revenue Total costs

Which tidal energy expenses are fixed, and which move with sales?

Cost classification

Break-even is reliable only if revenue-linked marine work stays variable, monthly overhead stays fixed, and payroll steps up as capacity grows. Here, fixed overhead is $57.2K per month before payroll.

Expense	Cost	Break-Even Treatment	Common Mistake
Turbine Maintenance & Repairs	Variable	Use the modeled 5.0% to 7.0% of revenue in contribution margin; first year uses 5.0%.	Treating marine repairs as flat overhead.
Remote Monitoring & Data Analytics	Variable	Use the modeled 1.0% to 2.0% of revenue; the rate falls as operating scale improves.	Ignoring scale benefits in monitoring work.
Project-Specific Regulatory & Permitting Fees	Variable	Use the modeled 2.0% to 4.0% of revenue and keep project fees in the break-even margin.	Burying project fees in overhead.
Sales & PPA Negotiation Fees	Variable	Use the modeled 1.0% to 3.0% of revenue for power purchase agreement (PPA) deal costs.	Excluding deal costs from margin.
Office Rent, Utilities & Internet, General & Administrative Insurance, Legal & Accounting Fees, R&D Program Costs, Software Subscriptions, Marketing & PR, and Loan Interest Corporate	Fixed	Carry $57.2K per month from Month 1 through Month 60 before payroll.	Spreading fixed overhead by megawatt-hour (MWh) too early.
Payroll	Semi-fixed	Model first-year payroll at $1.19M annually, about $99.2K monthly; step it up as staffing rises.	Treating headcount as fully variable.

How does break-even change from a lean tidal build to a full buildout?

Scenario table

Lean stays below break-even, base turns coverage positive after Month 13, and full buildout adds a wide cushion. The swing comes from revenue scaling faster than fixed staff, overhead, and financing costs.

Planning cases only; output and offtake are assumptions, not guarantees.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Year 1 lean build	$146K	$20K	$156K	86.0%	-$556K	Still loss-making and below coverage.
Year 2 base ramp	$1.54M	$209K	$176K	86.5%	$13.59M	Clear coverage after Month 13.
Year 5 full buildout	$27.58M	$2.48M	$196K	91.0%	$298.35M	Wide cushion if output and offtake hold.

What breaks the break-even plan for tidal power?

Stress test

Break-even is fragile here: lower utility power purchase agreement sales, marine repair spikes, and grid connection delays can widen the monthly gap fast. A 10% revenue drop, a 10% fixed-cost jump, or a margin squeeze can each break the plan.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$1.75M	$292K gap	Base case still leaves little room for delay.
Revenue shortfall	Revenue falls 10% to about $1.313M.	$1.75M	$435K gap	Lower PPA sales widen the monthly hole fast.
Fixed-cost pressure	Fixed costs rise 10% to about $1.72M.	$2.00M	$542K gap	Marine repair spikes and overhead push break-even up.
Margin pressure	Variable expenses rise 5 points to 19%.	$1.93M	$472K gap	Permitting drag and downtime cut the margin cushion.
Combined pressure	Revenue falls 10%, variable expenses rise to 19%, and fixed costs rise 10%.	$1.97M	$656K gap	Delays, repairs, and lower sales together create a steep cash gap.

Is the tidal site, offtake, and cash plan ready before you commit to the full build?

Founder checklist

Don’t greenlight the full marine build until the site, revenue contracts, and funding path all clear the break-even test. The model needs about $1.818M in monthly revenue, and the Month 12 cash trough reaches about $41.1M.

1Site ControlBefore Month 3

Confirm seabed rights, access rights, and the grid path before buying marine equipment, because the turbine and interconnection spend only works if the site can actually be used.

2Offtake Proof$1.75M

Verify Year 1 revenue is backed by signed utility PPAs, corporate PPAs, renewable energy credits, and production tax credits, not just a forecast.

3Burn Load$156.4K/mo

Add the $57.2K monthly fixed base to about $99.2K of Year 1 payroll, then make sure that burn is fine before you sign long commitments.

4Margin Check86% CM

Test whether Year 1 variable costs stay near 14%, so each revenue dollar leaves about 86 cents before fixed costs and the $1.818M monthly break-even line.

5Cash Cushion-$41.1M

Fund the Month 12 cash trough before committing to the full capex plan, because the model shows a minimum cash need of about $41.1M.

6Launch GateMonth 13

Keep launch flexible if onboarding, construction, or environmental review slips, because revenue pushed past Month 13 moves payback later and weakens the case for the build.