Enter project assumptions
Large screens show three input columns, smaller screens show two, and mobile shows one.
Example data table
The example below illustrates one utility scale case using the same calculation logic built into this page.
| Capacity (MW) | Capacity Factor (%) | Life (Years) | Discount Rate (%) | Capex ($) | Fixed O&M ($/yr) | LCOE ($/MWh) | LCOE ($/kWh) |
|---|---|---|---|---|---|---|---|
| 50 | 35 | 25 | 7 | 60,000,000 | 1,200,000 | 50.43 | 0.0504 |
Formula used
End adjustment equals decommissioning cost minus salvage value in the final year. A grant or upfront credit reduces initial capital before discounting begins.
How to use this calculator
- Enter installed capacity, expected capacity factor, project life, and discount rate.
- Add capital, fixed, variable, fuel, and other annual cost assumptions.
- Enter degradation, escalation, replacement timing, decommissioning cost, and salvage value.
- Apply any grant or upfront credit to reduce net initial capital.
- Select Calculate LCOE to view the summary above the form.
- Use the CSV and PDF buttons to export the summary and annual schedule.
Frequently asked questions
1) What does LCOE measure?
LCOE measures the discounted lifetime cost required to produce one unit of electricity. It helps compare projects with different costs, output patterns, and operating lives using a common economic basis.
2) Why does discount rate matter so much?
The discount rate changes how heavily future costs and future energy are weighted today. Higher rates usually raise LCOE for capital intensive projects because large upfront spending dominates the economics.
3) Should fuel cost be zero for renewables?
Usually yes. Solar, wind, and many hydro projects often use zero direct fuel cost. Keep variable O&M if the project still has output linked operating expenses or consumables.
4) How is degradation handled?
The model reduces annual output each year by the entered degradation rate. Lower future energy raises LCOE because discounted costs are spread across fewer discounted megawatt hours.
5) What is the replacement year field for?
Use it for major midlife component renewals, such as batteries, turbines, inverters, or stack replacements. Enter zero if no planned replacement should be included in the lifecycle cash flow.
6) Why include salvage value?
Salvage value represents remaining resale, scrap, or recovery value at the end of the project. It offsets final year cost, which lowers present value of costs and reduces LCOE.
7) Can this compare two technologies directly?
Yes. Run the calculator for each technology using consistent assumptions. Compare LCOE alongside capacity factor, degradation, fuel risk, and replacement timing before deciding which option is stronger.
8) Does this replace full project finance modeling?
No. It is an excellent screening tool, but detailed investment decisions still need taxes, debt structure, inflation treatment, curtailment risk, incentives, and market revenue assumptions.