Levelized Cost of Energy (LCOE) Calculator
Calculate the levelized cost of energy (LCOE) for a power generation project from capital cost, annual output, and operating expenses.
USD
kWh
USD/yr
years
Levelized Cost of Energy
$0.2500/kWh
LCOE in cents25.00 cents/kWh
Total Lifetime Cost$62,500
Levelized Cost of Energy vs Project Lifetime
Levelized Cost of Energy (LCOE)
LCOE is the average cost per unit of energy over the entire lifetime of a generating asset, allowing fair comparison between different energy sources.
Simplified Formula
LCOE = (Capital Cost + Lifetime Operating Costs) / Lifetime Energy Output
A full LCOE includes discounting future costs and energy, but this simplified version gives a useful first approximation. Lower LCOE means cheaper energy.
Example Calculation
A $50,000 solar system produces 10,000 kWh/year with $500/year maintenance over 25 years.
- 01Total cost = $50,000 + ($500 x 25) = $62,500
- 02Total energy = 10,000 x 25 = 250,000 kWh
- 03LCOE = $62,500 / 250,000 = $0.25/kWh
- 04That is 25 cents per kWh