The levelized cost of energy for distributed PV: A parametric study

The maturation of distributed solar PV as an energy source requires that the technology no longer compete on module efficiency and manufacturing cost ($/Wp) alone. Solar PV must yield sufficient energy (kWh) at a competitive cost (c/kWh) to justify its system investment and ongoing maintenance costs. These metrics vary as a function of system design and interactions between parameters, such as efficiency and area-related installation costs. The calculation of levelized cost of energy includes energy production and costs throughout the life of the system. The life of the system and its components, the rate at which performance degrades, and operation and maintenance requirements all affect the cost of energy. Cost of energy is also affected by project financing and incentives. In this paper, the impact of changes in parameters such as efficiency and in assumptions about operating and maintenance costs, degradation rate and system life, system design, and financing will be examined in the context of levelized cost of energy.