Levelized Cost of Energy (LCOE) Calculator

Formula

The formula to calculate the Levelized Cost of Energy (LCOE) is:

\[ \text{LCOE} = \frac{\text{NPVC}}{\text{NPVEE}} \]

Where:

$ \text{LCOE} $ is the Levelized Cost of Energy ($)
$ \text{NPVC} $ is the Net Present Value of Costs ($)
$ \text{NPVEE} $ is the Net Present Value of Energy Produced (kWh)

What is Levelized Cost of Energy (LCOE)?

The Levelized Cost of Energy (LCOE) is a metric used to describe the total cost to run and operate an electrical energy-producing asset per unit of energy produced over its lifetime. This metric can then be used to compare different types of energy production to see which would be more cost-effective per unit of energy produced.

Example Calculation

Let's assume the following values:

Net Present Value of Costs (NPVC) = $1,000,000
Net Present Value of Energy Produced (NPVEE) = 5,000,000 kWh

Using the formula to calculate the Levelized Cost of Energy (LCOE):

\[ \text{LCOE} = \frac{1,000,000}{5,000,000} = 0.20 \text{ dollars per kWh} \]

The Levelized Cost of Energy (LCOE) is $0.20 per kWh.