Solar LCOE Calculator
Calculate solar levelized cost of energy from project cost, energy production, degradation, O&M, inverter replacement, lifetime and discount rate.
☀️ LCOE Rule: LCOE compares lifetime project cost against lifetime solar energy production. Use this with Solar ROI Calculator, Solar Payback Calculator, Solar Panel Output Calculator, and Solar Panel Degradation Calculator.
💰 Solar LCOE: lifetime cost divided by lifetime energy
Installed System Cost
System Size
First-Year Energy
Project Lifetime
Annual Degradation
Discount Rate
Annual O&M Cost
Inverter Replacement
Replacement Year
Uses discounted lifetime cost divided by discounted lifetime energy. For simple non-discounted cost, set discount rate to 0%.
Presets:
System Size
Specific Yield
Performance Ratio
Shading / Soiling Loss
Annual Degradation
Years
Estimate first-year and lifetime energy, then copy the first-year kWh into the LCOE tab if needed.
Yield presets:
Solar LCOE
Grid Tariff
Annual Solar Energy
Installed Cost
Export / Self Use
Tariff Escalation
Compare solar cost per kWh against grid tariff. This is a quick commercial sense-check, not a full financial model.
Compare:
📐 Formula Reference
Basic LCOE
LCOE = PV(costs) ÷ PV(energy)
Discount Factor
DF = 1 ÷ (1 + r)^n
Degraded Energy
Energy_n = Energy_1 × (1 - degradation)^(n-1)
Simple Savings
Savings = Energy × (Tariff - LCOE)
📋 Quick Reference
Good LCOE Drivers
Lower CAPEXbetter
Higher yieldbetter
Lower O&Mbetter
Common Inputs
PV life25–30 yr
Degradation0.3–0.8%
O&Mannual
Compare With
Grid tariff/kWh
Export tariff/kWh
Diesel cost/kWh
📚 Design Notes
LCOE is not paybackLCOE shows lifetime cost per kWh. Payback shows how many years are needed to recover the upfront investment.
Energy yield mattersA high-sun site can have much lower LCOE even with the same installed cost because lifetime kWh is higher.
Discount rate changes resultsA higher discount rate reduces the value of future energy, so the calculated LCOE becomes higher.
Use realistic O&MCleaning, inverter replacement, insurance, monitoring and repair costs should not be ignored in commercial solar LCOE.
What is a Solar LCOE Calculator?
A solar LCOE calculator estimates the levelized cost of energy for a PV project. It divides the lifetime cost of the system by the lifetime electricity production to show the average cost per kWh.
How to calculate solar LCOE
The standard idea is LCOE = present value of costs ÷ present value of energy. Costs may include installation, operation and maintenance, inverter replacement and other lifetime expenses.
Why solar LCOE is useful
LCOE helps compare solar projects with grid electricity, diesel generation, rooftop PV alternatives or different panel layouts. It is especially useful together with ROI and payback calculators.
❓ Frequently Asked Questions
LCOE means levelized cost of energy. In solar, it is the average lifetime cost of producing one kWh from a PV system.
Yes. Lower LCOE means the system produces electricity at a lower lifetime cost per kWh.
LCOE is cost per kWh across the project life. Payback is the time required to recover the upfront investment from savings.
Yes. If the inverter is expected to be replaced during the project lifetime, include that cost in the LCOE calculation.
Yes. Degradation reduces lifetime energy production, so it increases the calculated cost per kWh.
Use a rate that reflects your cost of capital or expected return. For a simple comparison, you can set it to 0% to see non-discounted lifetime cost.
Yes for a quick check, but consider self-consumption, export tariff, demand charges, financing, tax, maintenance and system downtime for detailed decisions.
Higher annual kWh spreads the project cost over more energy, reducing the cost per kWh.