LCOE Calculator
Calculate levelized cost of energy in cents per kWh, then compare a solar project's lifetime cost against current electricity rates.
Reviewed May 25, 2026. JouleIO calculators are planning tools; confirm final utility rates, equipment specs, incentives, installation bids, and safety decisions with official utility, manufacturer, installer, DOE, ENERGY STAR, EPA, IRS, or EIA sources.
1. Enter real usage
Use your actual watts, runtime, home size, miles, battery size, or appliance schedule.
2. Localize the rate
Compare national assumptions with your state, utility bill, time-of-use plan, or project quote.
3. Verify before acting
Check final prices, rebates, tax rules, and safety requirements before buying or installing equipment.
Project presets
DC system size before inverter losses
Cash price before incentives and rebates
Use confirmed credits only
Maintenance, monitoring, insurance, repairs
Use quote output or PVWatts annual AC kWh
EIA U.S. residential average: 17.65 cents/kWh (2026-02)
Typical PV planning often uses about 0.3%-0.8%
Opportunity cost or project cost of capital
Use warranted or modeled operating life
LCOE
discounted lifetime cost
Utility Comparison
0.10¢/kWh over entered rate
Simple Payback
using bill value minus O&M
Project Economics
Energy Output
LCOE Formula Used Here
LCOE = discounted lifetime costs / discounted lifetime kWh
The calculator treats year zero as net capital cost after incentives. For each operating year it discounts annual O&M and annual kWh production back to present value. Production declines by the degradation rate entered above. The final result is shown in cents per kWh so it can be compared with the entered utility rate.
This is a planning model, not a tariff model. It does not automatically include time-of-use export value, demand charges, financing fees, inverter replacement, battery replacement, tax depreciation, or curtailment. Use the result as a project screen, then run quote-specific savings in the Solar Savings Calculator and break-even timing in the Solar Payback Calculator.
Inputs That Usually Change LCOE the Most
| Input | Why it matters | Quality check |
|---|---|---|
| Annual kWh | Energy is the denominator. Overstating production makes LCOE look artificially low. | Compare installer output with PVWatts and local shading assumptions. |
| Installed cost | Capex is usually the largest cost in a solar LCOE model. | Use cash price separately from financed price and dealer fees. |
| Discount rate | A higher cost of capital lowers the present value of future kWh and raises LCOE. | Use a realistic opportunity cost for cash projects or project WACC for business projects. |
| O&M and degradation | Maintenance raises costs; degradation lowers long-term output. | Check warranty terms, inverter assumptions, monitoring fees, and expected panel degradation. |
When a Low LCOE Still Needs More Analysis
Retail rates are not always the export value
A project can have a low cost per kWh and still produce weaker savings if exported solar is credited below the retail rate. Check net metering, avoided-cost credits, time-of-use windows, and monthly minimum charges.
Storage changes the boundary
Battery storage can improve self-consumption or backup value, but it adds capital cost and replacement assumptions. Use the Solar Battery Calculator before treating storage as free upside.
Frequently Asked Questions
What is LCOE?
LCOE means levelized cost of energy. It divides the present value of lifetime project costs by the present value of lifetime electricity production, producing a cost per kWh that can be compared with utility electricity rates or other generation options.
Is LCOE better than solar payback?
Use both. Payback tells you how many years it takes to recover the net upfront cost. LCOE tells you the average lifetime cost per kWh after cost, O&M, degradation, discount rate, and production are included.
What inputs move solar LCOE the most?
Installed cost per watt, annual kWh production, discount rate, system life, incentives, and degradation usually move LCOE the most. A small production error can change the result materially, so pair this calculator with PVWatts or a quote-specific production estimate.