> For the complete documentation index, see [llms.txt](https://docs.suno.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.suno.finance/financial-model/overview.md).

# Overview

The Suno Financial Model computes the Net Present Value (NPV) of each operating project in the portfolio and, from it, the Net Asset Value (NAV) per pWatt: the price at which project fractions are recognized by the protocol.

Most of the protocol's economics run through this number. When pWatt holders contribute their tokens to the Reserve, the uWatts they receive are issued against the project's NPV, and the published valuations of the portfolio are what stand behind the uWatt. The model is documented here in full, formulas and calibrations included, so that anyone can examine how the numbers that back the protocol are produced.

The methodology itself evolves. Improvements are adopted over time, following industry practice, and every methodological change is versioned and documented. Published valuations, on the other hand, never change: each one permanently keeps the inputs, method, and results it was produced with (see [Governance and auditability](/financial-model/governance-and-auditability.md)).

#### What the model computes

For each project, the model projects the remaining life of the asset, typically 20 to 30 years, one year at a time:

* Revenue: energy production anchored to metered history, contracted energy prices, and renewable energy certificates.
* Costs: operating expenses anchored to validated invoices, scheduled equipment replacements, and the protocol fee.
* Cash flows in local currency, converted to USD along a projected exchange-rate path and discounted with a year-by-year rate.

Three figures result: the NPV of the project's net cash flows; the NPV after the withholding tax that applies when project income is distributed through the protocol's regulated structure; and the NAV per pWatt, which divides the post-withholding NPV by the project's pWatt supply (one pWatt per watt of installed DC capacity).

#### Design principles

1. **Measured over promised.** Where real operating data exists, the model uses it instead of design estimates, weighting it by how much of the operating cycle it has observed. Projections re-anchor as new invoices arrive.
2. **Deterministic.** The engine is a pure function: the same inputs produce the same valuation, to the last decimal. No hidden state, no manual overrides.
3. **Frozen once published.** A published valuation keeps its complete input snapshot forever and can be recomputed by anyone, at any time.
4. **Uncertainty comes with the number.** Every valuation ships with a sensitivity analysis, calibrated on data, that brackets the NAV under stated adverse and favorable conditions.
5. **Conventions on the record.** Where the methodology requires a choice, such as the discounting convention or a blending rule, the choice and its rationale are written down.

#### From data to published NAV

Inputs are assembled from live sources: project data, billing telemetry, versioned macroeconomic projections, the contracted price curve, and the project's risk assessment. The engine computes the full year-by-year table and the resulting NPV and NAV. This draft is recomputed on demand as data changes. Publication then freezes the draft into a numbered, immutable version, which is what token holders and the Reserve consume.

The rest of this section covers each stage: [inputs and data](/financial-model/inputs-and-data.md), the [valuation engine](/financial-model/valuation-engine.md), [equipment replacement](/financial-model/equipment-replacement.md), [discounting and NAV](/financial-model/discounting-and-nav.md), the [sensitivity analysis](/financial-model/sensitivity-analysis.md), [governance](/financial-model/governance-and-auditability.md), and the model's [assumptions and limitations](/financial-model/assumptions-and-limitations.md).


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