By Matt Campbell, Senior Product Manager, SunPower Corp.
Solar photovoltaic power plants have emerged in recent years as a viable means of large-scale renewable energy power generation. A critical question facing these PV plants at the utility scale remains the competitiveness of their energy generation cost with that of other sources. The relative cost of electricity from a generating source can be compared through the commonly used levelized cost of electricity (LCOE) calculation. The LCOE equation evaluates the life-cycle energy cost and production of a power plant, allowing alternative technologies - with different scales of operation, investment, or operating time periods - to be compared. This article reviews the LCOE drivers for a PV power plant and the impact of a plant’s capacity factor on the system LCOE, as well as the effects of various factors such as capacity and geographical location. The economic tradeoffs between fixed and tracking systems are evaluated as well as a review of land use, plant operation and maintenance costs.