Levelized Cost of Energy Calculator
Calculate the levelized cost of energy (LCOE) for a power generation project from capital cost, annual output, and operating expenses.
Levelized Cost of Energy
$0.2500/kWh
Levelized Cost of Energy vs Project Lifetime
Formule
## 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.
Exemple Résolu
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
Questions Fréquentes
What is a good LCOE?
In 2024, utility-scale solar achieves 3-5 cents/kWh, onshore wind 2-5 cents/kWh, and natural gas 4-7 cents/kWh. Residential solar is typically 8-15 cents/kWh.
Why is this simplified?
A full LCOE calculation discounts future cash flows using a weighted average cost of capital (WACC). This simplified version assumes no time-value of money adjustment.
Does LCOE include storage costs?
Standard LCOE does not include storage or integration costs. The term LCOS (Levelized Cost of Storage) covers battery expenses separately.