Question

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)? (LCOE= capital costs + average yearly operating costs x number of project years / total production) ( am getting .327 which is not an option.)

A. $0.60 per kWh

B. $0.77 per kWh

C. 0.06 per kWh

D. $0.07 per kWh

Answer 1

Answer: The levelized cost of energy (LCOE) is 0.06.

Step-by-step explanation:

In equation form, the LCOE is calculated as follows:

LCOE = (capital cos ts)+(average yearly operating costs)x(number of project years)/(total production)

LCOE = ($995,000)+($175,000)x(25)/(89,500,000)

LCOE = $1,170,000x(25)/(89,500,000)

LCOE = 29,250,000/(89,500,000)

LCOE = 0.326815642458

Thus, the answer is $0.06 per kWh.

Hope this helps ^_^

Answer 2

$ 0.06 per kWh

Explanation:

Capital costs of the Solar Energy Project is expected at $ 995,000.

Average yearly operating costs are $ 175,000. The project is estimated to run for 25 years, producing a total 89,500,000 kWh.

LCOE = Levelized Cost of Energy =
`\frac{\text{Capital costs + (Average yearly operating costs)}*\text{(Number of project years)}}{\text{Total Production}}`

LCOE =
`(995,000+(175,000)*(25) )/(89,5000,000)=(5,370,000)/(89,500,000)=0.06\text{ }(\$)/(kWh)`

∴ Levelized Cost of Energy = $ 0.06 per kWh