Solar Levelized Cost of Energy Calculator

How the solar levelized cost of energy calculator works

LCOE here is present entered cost divided by the discounted modeled generation denominator. Initial capital occurs at time zero. Operating cost occurs at each year end, and final net cost is added at the last year end. First-year generation is the entered full amount; each subsequent year compounds the stated degradation percentage.

Each annual cost present value rounds to cents before it is added to capital. The energy denominator remains unrounded. Use consistent real or nominal cash and discount assumptions. The entered final amount may be positive disposal cost or negative residual value; zero generation leaves LCOE unavailable rather than implying free electricity.

This is a user-supplied cash/output scenario, not a solar-resource simulation. Taxes, financing, tariff revenue, incentives and replacement are not inferred. The reference documents support discounted-cost-over-energy methodology; this calculator declares its own simple compounding degradation convention instead of reproducing every source model.

Worked example

Capital of 10,000 plus five annual operating costs of 500 has present cost 12,500 at zero discount. With 10,000 kWh every year and zero degradation, the energy denominator is 50,000 kWh, giving LCOE 0.25 per kWh. Doubling capital to 20,000 raises present cost to 22,500 and LCOE to 0.45.

Sources and assumptions

The source material explains the underlying calculation or pricing structure. Entered prices, costs, schedules and scenario choices are your assumptions; this tool does not obtain supplier quotes or predict actual results.

• NLR: discounted cost and energy LCOE definition