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Solar photovoltaics: competing in the energy sector
1st September 2011
This study considers the full cost of photovoltaic electricity generation by using the concept of Levelised Cost of Electricity (LCOE). This concept takes into account all investment and operational costs over the system lifetime, including fuel consumption and equipment replacement. It thus allows a comparison of the cost of producing a kWh of electricity between various generation technologies such as for example PV and a gas-fired power plant – provided all external cost components are also included. To calculate the LCOE, the investment costs, different lifetimes and risk profiles of systems are taken into account, as are the locations of PV systems and their exposure to annual solar irradiance.
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