Levelized Cost of Energy (LCOE) Analysis Design Template

LCOE represents the average net present cost of electricity generation over the lifetime of a generating asset, expressed in $/MWh (or €/MWh), enabling apples-to-apples comparison across heterogeneous technologies (e.g., solar PV, onshore wind, nuclear, gas CCGT). The design template codifies best practices from authoritative sources—including the U.S. Department of Energy (DOE), International Renewable Energy Agency (IRENA), and IEA—by organizing inputs into modular, auditable sections: capital expenditure (CAPEX), operational expenditure (OPEX), capacity factor, plant lifetime, financing terms (discount rate, debt/equity split), tax treatment, and degradation or inflation adjustments. A robust template incorporates scenario-based sensitivity analysis (e.g., varying discount rates, construction timelines, or fuel prices) and uncertainty quantification (e.g., Monte Carlo simulation), allowing users to assess risk exposure and identify key value drivers. Furthermore, modern templates often integrate life-cycle considerations—such as balance-of-system costs, grid interconnection expenses, and end-of-life decommissioning—moving beyond simple generation-only LCOE toward system-level metrics like 'value-adjusted LCOE' or 'system LCOE' that account for temporal and locational value of energy.