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)

Question

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

$0.77 per kWh
$0.77 per kWh

$0.07 per kWh
$0.07 per kWh

$0.06 per kWh
$0.06 per kWh

$0.60 per kWh

Answer 1

To calculate the Levelized Cost of Energy (LCOE), we need to take into account the total costs of the project, including capital costs, operating costs, and the total production over the lifetime of the project.

First, we need to calculate the total cost of the project over its lifetime:
Total cost = Capital costs + (Operating costs x Lifetime)
Total cost = $995,000 + ($175,000 x 25)
Total cost = $995,000 + $4,375,000
Total cost = $5,370,000

Next, we calculate the LCOE:
LCOE = Total cost / Total production
LCOE = $5,370,000 / 89,500,000 kWh
LCOE = $0.06 per kWh

Therefore, the Levelized Cost of Energy (LCOE) for this solar energy project is $0.06 per kWh.