About the LCOE Calculator

Levelized Cost of Energy (LCOE) is the average cost per unit (₹/kWh) of the electricity a solar plant produces over its lifetime, accounting for capital cost, operating cost, degradation, and the time value of money. It lets you compare solar against the grid tariff on a like-for-like basis.

Formula

How to calculate it

1. 1Sum the discounted lifetime costs (capex plus each year's opex discounted to present value).
2. 2Sum the discounted lifetime energy (each year's generation, reduced by annual degradation, discounted).
3. 3Divide total discounted cost by total discounted energy to get ₹/kWh.
4. 4Compare the LCOE against your grid tariff — if LCOE is lower, solar saves money over its life.

Worked example

A plant with ₹45,000/kW capex, modest opex, ~1,500 kWh/kW/year, 0.6%/year degradation and an 8% discount rate lands around ₹2.5–3.5/kWh LCOE — well below typical Indian residential/commercial tariffs of ₹7–10/kWh.

What you can calculate

• 25-year LCOE
• WACC / discount rate
• Degradation model
• Grid parity

Standards & references

Frequently asked questions