What Is The Levelized Cost of Solar Energy (LCOE)?

The Levelized cost of producing energy (LCOE) is simply this – the cumulative cost of the energy production divided by the amount of energy produced.

This calculation can get very complicated quickly, as it must take into account a large number of factors. Some factors include complete installation costs, the cost of energy, and the amount of sunlight your solar panels capture.

The result of the levelized cost of energy (LCOE) calculation is typically a unit of $/kWh over a number of years. Why is this helpful? Because LCOE calculations allow comparing the cost of different ways of producing energy!