Development and use of a simple numerical model to quantify the impact of key photovoltaics system parameters on the levelized cost of electricity

Abstract

A simple numerical model was developed in this paper to quantitatively analyze the impact of module efficiency, module cost, balance of system (BOS) cost, and financial inputs on the levelized cost of Electricity (LCOE). It is found that LCOE is a linear or nearly linear function of installed system cost (BOS+Module), loan rate, and total system derate losses. LCOE was found to be a non-linear function of system lifetime and module efficiency. User friendly charts were generated along with empirical equations to establish quantitative relationship between LCOE and system and financial parameters. A roadmap to grid parity at 9cents/kWh was developed to illustrate how to use the methodology, charts, and equations developed in this paper to achieve a target LCOE by selecting the right combination of above parameters.