Levelised Cost Of Energy Calculator

Work out levelised cost of energy instantly with clear inputs, formula shown and shareable results.

About Levelised Cost Of Energy Calculator

LCOE is the constant price per megawatt-hour that recovers all costs over the project life at the required return. Capital cost is annualised with the capital recovery factor r(1+r)^n / ((1+r)^n - 1) over a 25-year life, added to annual operating cost, and divided by annual generation.

Formulas

Capital recovery factor

CRF = r(1+r)^n / ((1+r)^n - 1)

LCOE

LCOE = (capex x CRF + annual opex) / annual generation

Worked example

With the default values below, Levelised Cost Of Energy Calculator returns Levelised Cost Of Energy of $75.786. Change any input above and every figure here is recalculated in your browser.

Inputs used

Total Capital Costminimum 0: 60,000,000
Annual Generationminimum 0 MWh: 90,000 MWh
Annual Operating Costminimum 0: 1,200,000
Discount Rateaccepts 0.01–40 %: 8 %

Results

Levelised Cost Of Energy: $75.786
Annualised Capital Cost: $5,620,726.74
Capital Recovery Factor: 0.093679
Capital Share Of LCOE: 82.41%

Step by step

1Values used
2Capital recovery factor
3LCOE
4Levelised Cost Of Energy= 75.786
5Annualised Capital Cost= 5,620,726.74
6Capital Recovery Factor= 0.093679
7Capital Share Of LCOE= 82.41

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation or tax into account.
Figures are rounded for display to 6 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

Why is the discount rate so influential for renewables?

Because their cost is almost entirely capital. For a wind or solar project, moving the discount rate from 6% to 10% raises LCOE by roughly a third, while for a gas plant with high fuel cost the effect is much smaller.

What does LCOE leave out?

System integration costs — firming, transmission, balancing — and the time-of-day value of the output. Two technologies with equal LCOE can have very different value to a grid.