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)
• $0.77 per kWh
• $0.60 per kWh
• $0.07 per kWh
• $0.06 per kWh
To calculate the levelized cost of energy (LCOE), we need to take into consideration both the capital costs and operating costs over the lifetime of the project, as well as the total production.
First, let's calculate the total cost over the lifetime of the project:
Total cost = Capital costs + (Operating costs * Lifetime)
Total cost = $995,000 + ($175,000 * 25)
Total cost = $995,000 + $4,375,000
Total cost = $5,370,000
Next, we calculate the levelized cost of energy:
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.
Answer:
• $0.06 per kWh