LCOE (Levelized Cost of Energy)

Levelized Cost of Energy (LCOE) is a way to measure the total cost of producing energy from a specific source, like solar or wind, over its lifetime divided by the total energy it will produce. It includes costs like construction, operation, maintenance, and financing. LCOE helps compare different energy sources by putting all costs on the same scale, allowing policymakers, investors, and consumers to assess which types of energy are most cost-effective over time, helping inform decisions about energy investments and policies. A lower LCOE indicates a more economical energy source.