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Is a Tidal Power Business Efficient at the Unit Level?

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Created by a Former CFO
Updated for 2026
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Unit Economics Research

What do tidal power unit economics look like per MWh sold?

For a grid-connected U.S. tidal-stream array, one MWh sold is the clearest unit because both electricity revenue and the major operating-cost groups can be traced to delivered output.

Revenue per MWh sold—
Contribution per MWh sold—
Contribution margin—
Operating profit per MWh sold—
Direct answer

Can a tidal power array cover operating costs at current power prices?

The base benchmark does not cover its inflation-normalized operating costs at the selected New England wholesale price, before any capital recovery or financing burden.

Editable calculator

Which assumptions change across the tidal power scenarios?

The scenarios change only the wholesale value of each MWh and monthly generation volume. The operating-cost rates and fixed monthly insurance and monitoring commitment remain constant.

Editable assumptions

What can you edit per MWh sold?

Change a displayed assumption to recalculate every result immediately.

Saleable MWh sold in the modeled month. Counts display as integers.
Average revenue received for one MWh sold.
Materials, inventory, ingredients, parts, fulfillment, or direct purchased inputs for one MWh sold.
Labor that varies with delivery of one MWh sold.
Other costs that rise with each MWh sold, such as fees, packaging, utilities, or warranty.
Monthly cash fixed costs allocated across the displayed monthly volume.
Revenue decomposition

Where does one MWh sold go?

The bars use the same displayed inputs and scale to the largest current component.

Revenue$0.00
COGS$0.00
Labor$0.00
Other variable$0.00
Fixed allocation$0.00
Operating profit$0.00

Displayed monthly fixed costs: —. Bars redraw whenever the scenario or an input changes.

Scenario output
Contribution per MWh sold—
Break-even volume—
Operating margin—
Monthly operating profit—
Calculating…Scenario results are loading.
Unit definition

Why use one MWh sold instead of installed tidal capacity?

An MWh sold captures resource quality, turbine availability, losses, and settlement volume; installed MW alone is a capacity measure and cannot support traceable unit revenue.

PPA or wholesale price?

Electricity price directly sets revenue per MWh, and the EIA regional range is well below the historical reference array's full operating-cost rate.

Tidal resource and availability?

Monthly MWh depends on capacity factor, turbine uptime, array losses, and grid acceptance; published tidal capacity factors span a material range.

Marine intervention cost?

Vessel activity, replacement parts, consumables, and access during short slack-water windows make offshore maintenance a central variable-cost driver.

Insurance and monitoring?

Insurance and post-installation environmental monitoring form the largest fixed operating allocation in the reference-array cost structure.

Cost escalation and localization?

Historical engineering costs require escalation, but general CPI cannot capture local vessel scarcity, marine insurance, specialist labor, or supply-chain premiums.

Scenario comparison

What separates Low, Base, and High tidal power cases?

Low combines the lower observed price bound with a 20% capacity factor; Base uses the RM1 output and New England price; High combines the historical price benchmark with a 35% capacity factor.

Scenario Revenue COGS Labor Other variable Fixed Profit
Low $30.00 $48.96 $13.60 $0.00 $146.26 −$178.82
Base $55.00 $48.96 $13.60 $0.00 $103.35 −$110.91
High $80.00 $48.96 $13.60 $0.00 $83.58 −$66.14

What does contribution per MWh reveal for tidal power?

Contribution shows whether electricity revenue covers output-linked marine operations and shore-side labor. It does not measure returns after fixed operating commitments, construction cost, depreciation, financing, or tax.

What belongs in a full tidal power financial model?

A full model should add construction phasing, turbine and vessel capital expenditure, interconnection, grants, tax credits, debt, depreciation, working capital, PPA structure, curtailment, decommissioning, and taxes.

Research sources

Which sources support this Tidal Power benchmark?

These direct sources support the selected unit, revenue, cost structure, scale, and scenario bounds.

  • FinModelsLab — Tidal Power Financial Model Template

    This record verifies the required product URL and supports the PPA-led revenue format, not the numerical price benchmark. FinModelsLab is the product publisher and is not used as independent evidence for price, output, or operating cost assumptions.

    Open source
  • Sandia National Laboratories — Methodology for Design and Economic Analysis of Marine Energy Conversion Technologies

    The production total sets the base monthly unit volume; itemized OpEx supports variable and fixed cost classification. RM1 is a modeled reference design using historical component assumptions and does not represent an audited operating plant.

    Open source
  • U.S. Energy Information Administration — Forecast wholesale power prices and retail electricity prices rise modestly in 2025

    The base case uses the New England price because U.S. tidal development has been concentrated in coastal Northeast pilot and permit activity. Hub prices are not tidal-specific PPAs and omit renewable credits, capacity value, congestion basis, incentives, and contract shaping.

    Open source
  • National Renewable Energy Laboratory and Renewable Energy — Marine energy technology performance and value assessment

    The Low and High monthly output cases apply the published capacity-factor range to the 11 MW reference array. A broad technology range cannot capture site-specific tidal velocity distribution, wake losses, availability, or grid curtailment.

    Open source
  • U.S. Bureau of Labor Statistics — Consumer Price Index Historical Tables for U.S. City Average

    The ratio converts the historical Sandia operating-cost benchmark into approximate 2025 dollars. CPI-U is a general consumer-price index; marine equipment, vessel, specialist labor, and insurance costs may escalate differently.

    Open source
  • Federal Energy Regulatory Commission — Hydrokinetic Projects

    This source supports the grid-connected generation-operator format and distinguishes it from short experimental deployments that do not deliver power to the grid. Licensing status does not establish commercial output, sale price, cost, or project profitability.

    Open source
FAQ

What else should you know about Tidal Power unit economics?

Is tidal power revenue usually earned per MWh?

Yes. A grid-connected generator settles metered electricity in energy units, while the exact price may come from a utility PPA, corporate PPA, or regional wholesale market.

Why are fixed costs high for a tidal array?

The U.S. reference model assigns substantial annual cost to insurance and post-installation environmental monitoring, which continue even when monthly output changes.

Does this calculator include tidal turbine construction cost?

No. Turbines, installation vessels, subsea cables, shore connection, development, and financing are capital or project-finance items and are intentionally excluded from operating unit costs.

Can renewable incentives make the project profitable?

They can improve project cash flow, but their eligibility, timing, transfer value, and financing treatment are project-specific and should not be assumed inside the operating MWh benchmark.

How should a developer replace these benchmark assumptions?

Use the signed PPA, site resource study, turbine power curve, availability guarantee, vessel strategy, insurance quote, monitoring plan, grid-loss estimate, and vendor maintenance schedule.

How can you turn this benchmark into a full forecast?

A full model should add construction phasing, turbine and vessel capital expenditure, interconnection, grants, tax credits, debt, depreciation, working capital, PPA structure, curtailment, decommissioning, and taxes.

Explore the Tidal Power Financial Model