Levelized Cost of Electricity

Renewable energy systems have the potential to be one of the most important breakthroughs in recent human history. While technically feasible, many systems are simply not economically viable. Toward assessing this, many models have been proposed; one such approach is the LCOE algorithm and Levelized Cost of Electricity allows users to compute this parameter.

The application supports most basic model input parameters, including the dimensions of the turbine, its rotor diameter, as well as the cost of the capital. Users are tasked with providing these elements, besides other financial data (such as equity percentages, maintenance costs and returns on equity); estimations of the wind speed also have to be given.

Once all these parameters have been defined, it is possible to compute the LCOE, and an interesting option is the possibility to include loans in the analysis. Another noteworthy aspect is the lack of difficulty with which new users can carry themselves through the program. Only one window is available for usage and no menus or tabs are employed.

While all these elements ensure new users are able to generate results fast, computed LCOE values should be treated with caution. While some analysis parameters are given (for example the installed power of the turbine), average wind speeds are by no means a certainty.

These limitations, intrinsic to model involved, should be taken into consideration when interpreting the results, more-so if employing the tool for anything other than personal use.

To sum up, Levelized Cost of Electricity is a good tool for anyone interested in installing household wind turbines. The limited amount of advanced features renders it too simple and risky for business ventures. It can, however, be employed to highlight the various effects brought about by changes in the input parameters.