Technology

As solar energy increases in scale and scope around the world, the debate of which technology is best suited to the growing market is becoming a central debate for investors.

One of the areas which has received the greatest amount of attention is the cost of CSP versus PV. This article examines the Levelized Cost of Energy potential of both CSP and PV to better understand the cost forecasts for both technologies.

By Marco Poliafico

The LCOE (typically measured in unit of currency per unit of energy, e.g. $/MWh or €/kWh) is calculated by considering both capital and operational costs, fuel and maintenance costs as well as a discount rates during the lifetime of an energy facility. Through a mathematical formula it is possible to summarise an average cost of generating electricity. This parameter is quite handy because, provided that realistic assumptions are used in the formula, it is possible to compare the competitiveness of different technologies, including conventional sources of energy.

The LCOE is affected by various parameters and therefore it is essential to highlight that different methodologies (or assumptions) can...