Thursday, April 19, 2012

What is a simple method to compare different energy supplies?

Engineers and policy makers use the Levelized Cost of Energy (LCOE)

The beauty of the LCOE is simplicity. Simply divide the lifetime cost by the lifetime energy delivered.

What is the LCOE of solar electricity in Davis with south facing 4 in 12 roof and no shade.

    0.001 kW x 4.8 kWh/day x 365 days = 1.752 kWh/yr
    1.752 kWh/yr x 25 Years = 43.8 lifetime kWh
    $1.00/ Watt installation / 43.8 lifetime kWh = $0.023/ kWh

Just multiply your price per watt times 0.023 (2.3 cents) to get the cost per kWh of the PV electricity.

For a 5000 Watt Sunpower lease, the prepaid price is $21,342.
The price per watt is $21,342 / 5,000 = $4.27 per watt.

Therefore the cost per kWh for the PV electricity is $4.27 x 0.023 = $0.098 or 10 cents per kWh.

That’s a 20% discount over tier 1 at 12 cents, the lowest cost of electricity from PG&E
and a 45% discount over the average cost of 18 cents for E1 customers!

There’s a lot to like in those numbers.

Where else can you make a safe, secure investment that returns 20% or more after taxes?

Only solar can do that.

enJoy, Dean
Welcome to the Talbott Solar weblog.

I will be posting articles on and about solar photovoltaic electric and hot water systems.

Current issues that need discussion are solar finance and cost benefit analysis.
In addition we have some really exciting new technology from Sunpower.

Thanks Dean