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 $0.07 per kWh $0.07 per kWh $0.60 per kWh $0.60 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 consider both the capital costs and the operating costs over the lifetime of the project.
Step 1: Calculate the total cost over the lifetime of the project
Total cost = Capital costs + (Operating costs * Lifetime)
Total cost = $995,000 + ($175,000 * 25 years)
Total cost = $995,000 + $4,375,000
Total cost = $5,370,000
Step 2: 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 the solar energy project is $0.06 per kWh.