Levelized Cost of Energy Calculator

How to Use This Calculator

1. Enter the Capital Cost of your energy project (initial investment amount).
2. Input the Annual Operating Cost (maintenance and operation expenses per year).
3. Specify the Annual Energy Production in Megawatt-hours (MWh) that your project generates per year.
4. Provide the Project Life (expected lifespan of your energy project in years).
5. Click the Calculate button to compute the Levelized Cost of Energy.
6. The result will be displayed in dollars per MWh, showing the average cost of energy generated over the project's lifetime.

Understanding Levelized Cost of Energy (LCOE)

LCOE is a crucial metric used to evaluate the economic viability of different energy generation technologies. It represents the average cost of producing electricity over the lifetime of a power generation asset, allowing for comparison between various energy sources regardless of their different capital costs, operation costs, and lifespans.

The formula used in this calculator is:

LCOE = (Capital Cost + Annual Operating Cost) × (Project Life / Annual Energy Production)

Where a lower LCOE indicates a more cost-effective energy solution. This calculator helps you determine which energy project will be most economical over time, considering both initial investment and ongoing operational costs.

Applications of LCOE

• Comparing different renewable energy projects (solar, wind, hydro, etc.)
• Assessing the economic feasibility of new energy investments
• Assisting in decision-making for energy project development
• Evaluating the long-term value of energy assets