Cost of electricity by source

In electrical power generation, the distinct ways of generating electricity incur significantly different costs. Calculations of these costs at the point of connection to a load or to the electricity grid can be made. The cost is typically given per kilowatt-hour or megawatt-hour. It includes the initial capital, discount rate, as well as the costs of continuous operation, fuel, and maintenance. This type of calculation assists policy makers, researchers and others to guide discussions and decision making.

The levelized cost of electricity (LCOE) is a measure of a power source which attempts to compare different methods of electricity generation on a comparable basis. It is an economic assessment of the average total cost to build and operate a power-generating asset over its lifetime divided by the total energy output of the asset over that lifetime. The LCOE can also be regarded as the minimum cost at which electricity must be sold in order to break-even over the lifetime of the project.