A solar energy project is expected to have capital costs of $995,000, average yearly operating costs of $175,000, and a lifetime of 25 years. If the total production during the lifetime of the project is 89,500,000 kWh, what is the levelized cost of energy (LCOE)?(1 point)
Responses
$0.60 per kWh
$0.60 per kWh
$0.07 per kWh
$0.07 per kWh
$0.06 per kWh
$0.06 per kWh
$0.77 per kWh
To calculate the levelized cost of energy (LCOE), we need to take into account the total costs of the project and the total production during the lifetime of the project.
First, let's calculate the total costs of the project. This includes the capital costs and the average yearly operating costs over the lifetime of the project.
Total costs of the project = capital costs + (average yearly operating costs * lifetime)
Total costs of the project = $995,000 + ($175,000 * 25)
Total costs of the project = $995,000 + $4,375,000
Total costs of the project = $5,370,000
Next, let's calculate the levelized cost of energy by dividing the total costs of the project by the total production during the lifetime of the project.
Levelized cost of energy = total costs of the project / total production
Levelized cost of energy = $5,370,000 / 89,500,000 kWh
Levelized cost of energy ≈ $0.06 per kWh
Therefore, the correct answer is $0.06 per kWh.