Calculator Inputs
Example Data Table
| Parameter | Example Value | Notes |
|---|---|---|
| CAPEX today | $850,000 | Total installed cost before commissioning escalation. |
| Construction duration | 12 months | Midpoint escalation uses 6 months average spend timing. |
| CAPEX inflation | 6%/yr | Applied only during the build window. |
| OPEX year 1 | $18,000/yr | First full operating year cost baseline. |
| OPEX inflation | 2% / 4% / 6% | Low, base, and high escalation scenarios. |
| Project life | 25 years | Years of OPEX and energy included. |
| Annual energy | 1,550,000 kWh | First-year production before degradation. |
| Degradation | 0.5%/yr | Energy reduction applied each year. |
| Discount rate | 8%/yr | Used for NPV of costs and discounted energy. |
Formula Used
PV(E) = Σ Et / (1 + d)t
LCOE = (CAPEXCOD + NPV(OPEX)) / PV(E)
How to Use This Calculator
- Enter CAPEX today and expected construction duration.
- Set a CAPEX inflation rate that matches your market.
- Enter first-year OPEX and three escalation scenarios.
- Provide project life, annual energy, and degradation.
- Choose a discount rate aligned with your financing.
- Click “Calculate Sensitivity” to see scenario results.
- Download CSV or PDF to share with stakeholders.
Why inflation sensitivity matters for solar budgets
Solar projects combine large upfront procurement with multi-year operations. When inflation shifts, the same design can deliver a different lifetime cost profile. This calculator stress-tests OPEX escalation and CAPEX inflation so you can quantify downside exposure, refine contingency, and communicate assumptions clearly.
CAPEX timing risk during procurement and construction
Equipment pricing, logistics, and contractor rates can move during the build window. A practical approach is to escalate CAPEX to a commissioning point using midpoint spending time. This converts “today’s estimate” into a commissioning-adjusted value that aligns better with purchase orders and progress payments.
OPEX escalation scenarios and their cost impact
OPEX includes cleaning, vegetation control, inverter service, monitoring, insurance, and site overheads. Small percentage changes compound over decades, affecting the net present value of costs. Low, base, and high escalation scenarios help contract managers compare service agreements and set realistic escalation clauses.
NPV-based LCOE interpretation for decision making
The calculator discounts yearly OPEX and energy to today’s value, then computes LCOE as NPV cost divided by discounted energy. Higher discount rates reduce the weight of later cashflows and energy, while degradation reduces long-term production. Use consistent discount rates across options to keep comparisons fair. Consider running sensitivity on escalation steps and service contracts, then align escalation clauses with CPI-linked indices. For lenders and owners, document inflation sources, base years, and the rationale behind low and high bounds to improve auditability.
Example data to reproduce a sensitivity check
Example inputs: CAPEX $850,000, construction 12 months, CAPEX inflation 6%/yr, OPEX year 1 $18,000, OPEX inflation 2% / 4% / 6%, life 25 years, annual energy 1,550,000 kWh, degradation 0.5%/yr, discount 8%/yr. Run the model, then export CSV for bid files or internal review notes.
FAQs
1) What does “CAPEX at commissioning” represent?
It is the installed cost escalated from today to an average spending time during construction. It approximates what you effectively pay by the time the system enters service.
2) Why are three OPEX inflation cases included?
Operations costs are uncertain and can move with labor, spares, and insurance. Using low, base, and high cases shows how compounding escalation changes total cost and LCOE.
3) What discount rate should I use?
Use your project’s after-tax weighted cost of capital or required return. For internal comparisons, keep the same discount rate across scenarios so differences reflect inflation and performance assumptions.
4) Does the calculator include revenue or tariff escalation?
No. It focuses on cost and energy to report NPV cost and LCOE. You can pair these outputs with a separate revenue model to estimate NPV profit or IRR.
5) How is panel degradation applied?
Annual energy declines each year by the degradation rate. This reduces discounted lifetime energy, which can raise LCOE even if costs stay unchanged.
6) Can I model replacement items like inverters?
This version treats OPEX as an annual series. To reflect replacements, increase OPEX in the affected years by editing the model logic, or approximate with a higher OPEX baseline.
7) Why do nominal OPEX and NPV OPEX differ?
Nominal OPEX is the simple sum of inflated yearly costs. NPV OPEX discounts those yearly costs back to today, so later costs contribute less to the present-value total.