LCOE
Acronym for: Levelized Cost of Electricity
Total lifetime cost of building and operating a solar plant divided by total lifetime energy generated.
Detailed Explanation
LCOE (Levelized Cost of Electricity) is the standard metric for comparing electricity generation economics across technologies. Formula: (total lifetime costs) / (total lifetime energy). In 2026, utility-scale solar LCOE ranges $0.02-0.05/kWh globally, making it the cheapest new electricity source in most markets. Lower LCOE = more competitive. Inputs include: capex, operations costs, financing cost, capacity factor, degradation, lifetime. Choosing TOPCon over PERC lowers LCOE 5-8% due to higher yield and slower degradation.
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Related Terms
Long-term contract to sell generated electricity at a fixed price; primary financing mechanism for utility solar.
Utility policy crediting solar owners for excess electricity fed back to the grid at the retail rate.
Time required for a solar system to save enough money to offset its initial cost.