Glossary

Weighted Average Cost of Capital (WACC)

Finance

Definition

WACC is the blended required return for all sources of capital, weighted by their share in the capital structure (debt and equity). It is a core discount rate input in discounted cash flow valuation. Renewable energy project viability is highly sensitive to WACC: lower financing costs can materially increase project value and competitiveness in auctions and bilateral offtake markets.