Mis à jour le 13 juin 2026

In the world of solar energy, we often hear about LCOE, or Levelized Cost Of Energy. It’s a bit like the barometer that tells us if a solar project is truly profitable in the long term. But how is it calculated exactly, and what makes this famous LCOE vary? Let’s take a closer look, trying to simplify things to truly understand what the cost of producing a solar megawatt-hour really means.

Key Takeaways

• LCOE, or Levelized Cost of Energy, is an essential indicator for assessing the real profitability of a photovoltaic project over its entire lifespan.
• Several factors influence LCOE, including initial investment costs, operating and maintenance expenses, the installation’s lifespan, and the discount rate applied.
• The size of the installation has a significant impact: large installations tend to have a lower LCOE due to economies of scale.
• The type of installation (building-integrated vs. on-roof) and geographical location also affect LCOE, with on-roof installations in the south often being more advantageous.
• Although the LCOE of solar has significantly decreased, it’s important to compare it to the price of electricity purchase to judge its competitiveness, especially in the context of self-consumption or solar water heater systems.

Understanding LCOE to Assess Solar Profitability

To truly grasp the profitability of a solar project, you need to speak the same language as industry professionals. This language is LCOE, or Levelized Cost of Energy. In French, it could be translated as « actualised cost of energy. » It’s an indicator that allows for the comparison of different energy sources by calculating the average cost of producing one megawatt-hour (MWh) over the entire lifespan of an installation.

Definition and Relevance of LCOE

LCOE is like the final grade for a solar project. It takes into account all costs: the purchase of equipment, installation, maintenance, and even the cost of borrowed money. It tells you the real cost of the electricity produced by your installation. It’s the indispensable tool for knowing if your solar project is economically viable in the long term. Without this measure, it’s difficult to objectively compare the performance of a photovoltaic installation with other energy sources, or even with another solar installation with different characteristics. It helps to have a clear view of solar’s competitiveness. For professionals, tools like the Swissolar profitability calculator can help refine these estimates.

Key Parameters for LCOE Calculation

Several elements come into play when calculating LCOE. Of course, there are the initial investment costs (CAPEX), which include everything needed to build the installation. Added to this are the operating and maintenance costs (OPEX), which cover routine upkeep and potential repairs over the project’s lifespan. The amount of energy the installation will produce each year, as well as its estimated lifespan, must also be considered. Finally, the expected profitability of the project, often expressed through a discount rate, plays a significant role. These parameters are often presented in tables for better readability:

Type of Cost	Description
CAPEX	Initial investment costs (panels, inverters, structure, installation)
OPEX	Operating and maintenance costs (cleaning, repairs, insurance)
Production	Amount of energy produced annually (in kWh or MWh)
Lifespan	Number of years the installation is operational
Discount Rate	Rate reflecting the time value of money and project risk

Applying LCOE to Residential Solar

For residential solar installations, the LCOE calculation follows the same principles, but with specific assumptions. For example, a lifespan of 25 years, a relatively low discount rate (around 1%), and a slight annual decrease in production (about 0.5%) are often considered. The goal is to best reflect the economic reality of these small installations. It’s important to note that operating and maintenance costs for solar installations are generally between €6 and €10/kWp/year, representing a small fraction of total expenses. LCOE for favourable sites can be between €33 and €60/MWh, but can be higher under other conditions. Therefore, it’s crucial to verify that the calculated LCOE is lower than the price at which you buy electricity from the grid, unless you are betting on a significant future increase in electricity prices. The production costs of solar energy are constantly evolving, making these calculations all the more important.

Comparative Analysis of Energy Production Costs

Competitiveness of Photovoltaics vs. Gas Power Plants

Comparing the production cost of different energy sources is no easy task. One of the main difficulties lies in how to make these costs comparable, especially when expenses are not distributed in the same way over time. This is where the concept of LCOE (Levelized Cost of Energy) becomes truly meaningful. It allows all costs and revenues to be brought back to a single point in time, thus providing a fairer basis for comparison. Photovoltaics have made considerable progress, making its production cost increasingly competitive against traditional gas power plants.

It should also be noted that a megawatt-hour (MWh) produced by a dispatchable energy source, like gas, cannot always be directly compared with an MWh from an intermittent source, such as solar. LCOE, by taking these specificities into account, helps to better understand the real profitability of each technology. Current data shows a clear trend: the cost of solar energy has fallen dramatically in recent years, positioning itself favourably in the energy landscape. Recent estimates place the LCOE of photovoltaic solar in a price range that makes it increasingly attractive compared to gas power plants, whose costs can be more volatile due to fluctuating fuel prices. This evolution is a key factor in the global energy transition.

Variability of Costs for Hydropower

Hydropower, although often perceived as a stable and mature energy source, also has its own cost variability. Unlike gas power plants whose cost is heavily linked to fuel prices, hydropower costs are more influenced by factors such as the initial cost of dam construction, maintenance operations, and, of course, water availability. The latter is highly dependent on weather and climate conditions, which can vary from year to year. Therefore, even if the marginal cost of producing an MWh once the plant is operational is very low, the overall LCOE can be affected by these elements.

The initial investments for large hydroelectric installations are often very significant, which weighs on the LCOE calculation over the installation’s lifespan. Furthermore, operating and maintenance costs, although generally stable, can experience peaks during renovation or upgrade work. It is therefore essential to consider all these factors to obtain an accurate picture of hydropower’s competitiveness. LCOE benchmarks for solar photovoltaic systems show a downward trend that makes solar increasingly competitive.

Positioning of Rooftop LCOE vs. Ground-Mounted Plants

When examining the LCOE of photovoltaic installations, it’s important to distinguish between those installed on building rooftops and those located on the ground, often in the form of large power plants. Rooftop installations, while benefiting from existing structures, can have higher installation costs per kilowatt-peak (kWp) due to technical constraints related to building integration, connection complexity, and the need to adapt structures. This can result in a slightly higher LCOE compared to large ground-mounted plants.

Large ground-mounted solar power plants, on the other hand, benefit from significant economies of scale. Installation costs, logistics, and maintenance are generally optimised for large areas. This often allows for a lower LCOE to be achieved. However, the cost of land use and potential environmental impacts must also be considered. The comparative analysis of LCOE for different energy production technologies highlights these differences, showing that while large ground-mounted plants are often the most economical, rooftop installations play a key role in decentralised production and self-consumption, with an LCOE that continues to decrease thanks to technological advancements and falling solar panel prices.

Impact of Installation Size on LCOE

Economic Advantages of Large-Capacity Installations

The size of a photovoltaic installation plays a significant role in its cost of production, measured by LCOE. Generally, the larger the production capacity, the lower the cost per megawatt-hour (MWh). This is a well-known principle of economies of scale in many industrial sectors. For a solar installation, this means that the initial investment, although higher for a large capacity, does not increase proportionally to the installed power. Fixed costs, such as those related to installation, grid connection, or certain administrative procedures, are spread over a larger energy production, thus reducing the unit cost.

LCOE Analysis for 9 kW and 36 kW Installations

Let’s take the example of residential and semi-professional installations. For a 9 kW capacity, the LCOE is often already lower than the price of electricity, especially in sunny regions and for on-roof installations. Moving to a 36 kW capacity accentuates this trend. The cost per MWh decreases significantly. For example, if doubling the capacity does not require doubling the total investment, the LCOE can drop noticeably. This makes larger-scale projects, even if they go beyond strictly residential use, more economically attractive in the long term. Strategies aimed at reducing initial investment expenses can improve this cost of production by up to 20%.

Optimising Cost of Production Through Scale

The effect of scale is therefore a key factor in optimising LCOE. Large solar power plants benefit from more advantageous purchasing conditions for equipment, more standardised installation processes, and better optimisation of system costs. Even for more modest installations, choosing a capacity slightly higher than immediate needs can be wise if it reduces the overall LCOE over the project’s lifespan. However, a balance must be struck, as excessive oversizing without consumption or sale of surplus may not be profitable. The analysis of investment expenses is therefore crucial for evaluating this optimisation.

Factors Influencing the LCOE of Photovoltaic Installations

Several elements come into play in determining the levelised cost of energy produced by a solar installation. It’s not just about the technology used, but also how it’s installed and its environment.

Distinction Between Building-Integrated and On-Roof Installations

One of the first important distinctions concerns the type of installation. So-called ‘building-integrated’ (BIPV) systems directly replace roofing elements, such as tiles, and ensure waterproofing. Conversely, ‘on-roof’ installations are mounted over the existing roof covering. Generally, BIPV systems have a higher LCOE. This is often due to higher installation costs and increased complexity, even if aesthetics can be an advantage for some homeowners.

Influence of Geographical Location on LCOE

The location of a solar power plant has a direct impact on its production and, consequently, on its LCOE. An installation located in a region with more significant and consistent sunshine will produce more electricity annually. For example, the south of France enjoys higher solar irradiation than the north, resulting in better panel efficiency. Location is therefore a determining factor for optimising profitability. Local weather conditions that can affect production, such as snow or fog, must also be considered.

Comparison of LCOE by Installation Capacity

The size of a photovoltaic installation plays a significant role in its cost of production. Large installations, such as ground-mounted power plants or large rooftop systems, generally benefit from economies of scale. The initial investment per installed kilowatt-peak tends to decrease as capacity increases. For residential installations, moving from a small capacity (e.g., 3 kWp) to a medium capacity (9 kWp) can significantly reduce the LCOE, making the project more profitable. This relationship between capacity and unit cost is a major economic lever.

Here is a simplified overview of costs observed for different installation sizes in northern France:

Type of Installation	Capacity	LCOE (€/MWh)	Purchase Price (€/MWh)
On-roof	3 kW	189 – 267	186
On-roof	9 kW	< 186	N/A

It is interesting to note that for installations of 9 kWp and above, the LCOE is often lower than the electricity purchase tariff, which is an indicator of good profitability. Optimising the size of solar installations is therefore a key strategy for improving return on investment.

Simplified LCOE Calculation Methodology

Principles of Expense Annualisation

To obtain a comparable measure of the profitability of a solar installation over its lifespan, it is necessary to bring all expenses to a common basis. The simplified LCOE method is based on the idea of annualising all costs. This means that initial investment expenses, operating costs planned over several years, and even end-of-life decommissioning costs are converted into an equivalent annual expense. This approach smooths out cost variations over time and facilitates comparison between different technologies or projects. The goal is to obtain an average cost per unit of energy produced over the entire operating period.

Underlying Assumptions for the Calculation

The simplified LCOE calculation relies on several key assumptions that are worth understanding to correctly interpret the results:

• Stability of Parameters: It is assumed that certain factors, such as the capacity factor (which represents the actual utilisation rate of the installation compared to its maximum capacity), remain constant over the project’s lifespan. In reality, this factor can evolve, for example, due to wear and tear or increased maintenance needs.
• Annualisation of Expenses: All costs, whether one-off (investment, decommissioning) or recurring (operation), are brought back to an annual value. For future expenses, an annualisation is applied to account for the time value of money.
• Constant Operating Costs: Although operating costs tend to increase over time, an average is often used in simplified models.

It is important to recognise that these simplifications aim to make the calculation more accessible, but they can mask important nuances in the real economic dynamics of a solar project over the long term.

Simplified LCOE Formula and its Components

A simplified formula for calculating LCOE can be expressed as follows:

LCOE = (Total Annualised Discounted Cost) / (Annual Energy Produced)

The main components of this formula are:

• Average Annualised Capital Cost ($eta$): This represents the sum of initial investment costs, spread over the project’s lifespan and discounted. It also includes a portion of decommissioning costs, although their weight is often negligible due to discounting.
• Annual Operating Costs ($C_M$): These are the recurring expenses for running the installation (maintenance, insurance, etc.).
• Annual Energy Produced: This is the amount of electricity the installation is expected to produce each year. It is often calculated from the installed capacity and the capacity factor, using basic physics formulas [79e5].

This approach provides an average rate at which the electricity produced must be sold for the project to be profitable over its lifespan, taking into account all incurred costs [cb8a].

Investment and Operating Costs in LCOE Calculation

Breakdown of Solar Project Expenses

A photovoltaic project involves both initial investment costs and recurring operating costs. Here’s how they are broken down:

• Investment Costs (C_I): Amount required to acquire and install solar equipment, usually expressed in €/kW installed. This includes equipment (modules, inverter), labour, engineering, and sometimes connection fees.
• Annual Operating Costs (C_F): Expenses to maintain, monitor, and manage the installation. These expenses are paid annually, regardless of the amount of electricity produced.
• Variable or Proportional Costs (C_M): Expenses directly related to electricity production (€/MWh), such as cleaning costs or occasional component replacement (especially for large power plants).
• Decommissioning Cost (C_D): Estimated expense to dismantle and recycle the installation at the end of its life, sometimes offset by residual resale value.

A rigorous view of costs involves considering the entire project lifecycle, from the first euro invested to the final site remediation.

Expense Item	Examples
Initial Investment	Modules, inverter, installation work
Annual Operation	Maintenance, insurance
Variable Costs	Cleaning, replacement of small parts
Decommissioning	Removal – recycling, waste management

Role of the Average Annualised Capital Cost

In the LCOE calculation, the average annualised capital cost (β, expressed in €/kW/year) plays a decisive role: it transforms the initial investment into an equivalent annual charge over the installation’s entire lifespan. This annualisation takes into account the discount rate (r) and the project’s operational duration (L).

The formula for β allows for the comparison of different technological options without bias related to the timing of expenses. The factor β is obtained as follows:

[ β = \frac{C_I}{L_r} + \frac{C_D}{(1+r)^L} + C_F ]

• C_I: initial investment
• C_D: decommissioning cost
• L_r: adjusted lifespan, dependent on the discount rate
• C_F: annual fixed costs

The effort to transform costs into comparable annuities is fundamental to obtaining an expressive LCOE, as for rooftop solar energy.

Accounting for Fixed and Variable Costs

In LCOE, each expense is assigned to one of these two categories:

1. Fixed (related to installed capacity – e.g., insurance, preventive maintenance)
2. Variable (dependent on production – e.g., minor repairs, occasional cleaning)
3. Decommissioning (often negligible, especially due to the effect of discounting)
4. Taxes or regulatory fees

Even though, for photovoltaic projects, the variable cost is much lower than in gas or coal, not accounting for it would give an optimistic view of profitability.

Clearly allocating costs and discounting them correctly allows for the measurement of solar’s true long-term profitability, even in a context of constantly falling installation prices as illustrated in 2024.

Discounting and its Impact on LCOE

Discounting is an economic concept that allows for the comparison of sums of money received or spent at different times. In other words, one euro today is not worth the same as one euro in ten years. This time lag is taken into account to assess the real profitability of a project over its lifespan.

Understanding the Discount Rate

The discount rate, often represented by the letter ‘$r$’, reflects the time value of money. It incorporates several elements, such as inflation, project risk, and the opportunity cost of capital. For projects undertaken by public entities, this rate is generally lower, often around 4-5%, as it is less focused on immediate profit and more on the general interest. Private projects, on the other hand, often require a higher rate, between 8% and 10%, to remunerate shareholders and achieve short-term profitability objectives. This choice of rate has a direct and significant influence on the LCOE calculation.

The discount rate is a key parameter that modifies the perception of an investment’s long-term profitability. A high rate tends to decrease the present value of future cash flows, making long-cycle projects less attractive.

Differences Between Public and Private Projects

The distinction between public and private projects is mainly reflected in the discount rate used. Public projects often aim for societal objectives and benefit from easier access to financing, justifying a more moderate rate. Private projects, subject to market and investor demands, must incorporate a risk premium and a higher return on capital, hence a higher discount rate. This difference can explain why certain technologies, although technically viable, may present different LCOEs depending on the project owner.

Consequences of Discounting on the Purchase Tariff

Discounting plays a crucial role in setting electricity purchase tariffs. The calculated LCOE, once discounted, can approach the tariff that the producer hopes to obtain, particularly in the context of tenders. If the discount rate equals inflation plus a return on investment rate, the obtained LCOE will correspond to this tariff. It is important to note that in some mechanisms, such as contracts for difference, the price is indexed to inflation, and the latter should not be included in the discount rate. An in-depth analysis of energy production costs shows how these factors influence the competitiveness of different energy sources.

Historical and Forecasted Evolution of Solar LCOE

Dramatic Drop in Average Production Costs

When we look back, it’s quite impressive to see how much the cost of producing solar electricity has fallen. Not so long ago, installing solar panels cost a fortune. Today, it’s a completely different story. Equipment prices have dropped significantly, and installation methods have become more efficient. This continuous decrease makes solar increasingly attractive. We see figures showing that initial investments, what we call CAPEX, have decreased significantly. For example, projections indicate that investment costs for solar energy could fall further by 2050, ranging from €166/kW to €720/kW according to some studies [62a0]. This is a fundamental trend that has transformed the energy landscape.

Observed Trends for Residential and Industrial Power Plants

This cost evolution does not affect all installations in the same way. For individuals, installing panels on their roof has become more accessible. We observe that even for modest-sized systems, such as 9 kW installations, the cost of production (LCOE) often remains lower than the price at which electricity is purchased from the grid. When moving to larger installations, such as 36 kW ones, the cost per kilowatt-hour decreases even further. This is the effect of scale: the more you produce, the less it costs per unit. For large power plants, whether ground-mounted or integrated into industrial projects, competitiveness is even more pronounced. Figures show continuous improvement, making solar an increasingly serious option for large-scale energy production.

Future LCOE Projections for Different Configurations

So, what does the future hold? The forecasts are rather optimistic for photovoltaics. Costs are expected to continue to fall, even if the pace of this decline might slow down. Research into new technologies and improvements in manufacturing processes play a key role. It is likely that the LCOE of solar installations will become even lower, making this energy source even more competitive against fossil fuels. Various prospective scenarios, aiming to meet future energy needs, all emphasise the need to massively increase installed solar capacity by 2050. This implies deploying solar panels wherever possible, whether on rooftops or in large ground-mounted power plants [3fd7]. The objective is clear: solar will be a cornerstone of our energy future.

The cost of producing solar electricity has seen a dramatic decrease in recent years, making this technology increasingly competitive. Future projections indicate a continuation of this trend, with costs expected to continue to fall, thus consolidating solar’s place in the global energy mix.

LCOE Analysis for Self-Consumption and Water Heater Systems

Impact of Self-Consumption Without Batteries on LCOE

Self-consumption is the idea of consuming the electricity you produce yourself. When no battery storage system is planned, immediately unused electricity is lost. This may seem unfortunate, but ADEME has studied the impact on LCOE. Installation expenses decrease slightly, between 3.7% and 7.7%. This reduction is, of course, reflected in the cost of producing energy. Therefore, the gain in LCOE must be carefully weighed against the loss of unused energy.

Competitiveness of Individual Solar Water Heaters

Let’s now turn to individual solar water heaters (CESI). Without public subsidies, their competitiveness against conventional electric water heaters depends heavily on the region. In the south of France, they can be more profitable, with an estimated LCOE between €116 and €185/MWh, compared to €162 to €170/MWh for an electric water heater. Elsewhere, the advantage is less pronounced, or even non-existent. Heat pump water heaters generally remain more expensive than standard electric models. It is therefore important to look at the total cost of the energy produced.

Comparison with Electric and Heat Pump Water Heaters

To put it simply, if you are looking for the cheapest solution to heat your water, individual solar is not always the answer, especially if you are not in a very sunny region. The figures show that the LCOE of CESI can be higher than that of an electric water heater in many situations. Heat pump water heaters, although efficient, often show a higher cost of hot water production than standard electric models. Therefore, it is important to compare the different systems based on your location and specific needs. The LCOE calculation helps to highlight these differences, as shown by the analysis of solar energy production costs.

Here is a simplified comparative table:

System	LCOE (Southern France)	LCOE (Elsewhere)	Notes
Individual Solar Water Heater	€116-185/MWh	Higher	Competitive without subsidies in the south
Electric Water Heater	€162-170/MWh	€162-170/MWh	Benchmark
Heat Pump Water Heater	Higher	Higher	Generally more expensive than electric

It is always wise to check that the LCOE of your solar installation will be lower than the purchase price of electricity from the grid, unless you are betting on a significant future increase in energy prices or want to reduce your dependence on the grid. Photovoltaic solar energy converts solar radiation into electricity, and its production cost is a key indicator of its profitability.

Environmental and Economic Considerations of Photovoltaics

Carbon Footprint of Solar Installations

It is important to recognise that, like any energy source, photovoltaics has an environmental impact. It is not carbon-neutral and requires resource extraction. However, no energy source is perfect. PV represents one of the least impactful solutions for producing electricity. Its recycling rate reaches 95% of the mass of the panels, which have a lifespan of at least thirty years. The carbon footprint is 43.9 gCO2eq/kWh, and could drop to 25.2 gCO2eq/kWh if panels were manufactured in France. This is to be compared with 820 gCO2eq/kWh for coal, or even 59.9 gCO2eq/kWh for the current French electricity mix. Continuous improvement in yields and materials contributes to reducing this impact.

Continuous Improvement of Yields and Materials

There is a constant increase in the efficiency of solar panels. At the same time, the amount of materials used is decreasing, which improves the carbon and material footprint of installations. This continuous evolution is a major asset for the solar sector.

Comparison of Solar LCOE with Other Energy Sources

The average cost of producing one megawatt-hour (LCOE) for photovoltaics has fallen dramatically. For example, for residential 3 kWp power plants, it dropped from €314-594/MWh in 2011 to €155-283/MWh in 2020. For large rooftops, the projected LCOE for 2048 is €25 to €38/MWh, much lower than the estimated cost for new nuclear power (€110-120/MWh). Ground-mounted installations are expected to reach €23 to €32/MWh by 2050. These figures show the growing competitiveness of solar.

The LCOE of ground-mounted photovoltaic installations is now competitive with that of a combined-cycle gas turbine power plant. The production costs of onshore wind power are also in this range. However, the LCOE of rooftop photovoltaics remains slightly higher than that of a gas power plant. It is interesting to note that building-integrated (BIPV) installations have a systematically higher LCOE than on-roof panels, the latter therefore being more profitable. In northern France, for a 3 kW installation, the LCOE ranges between €189 and €267/MWh, which is slightly higher than the electricity purchase tariff (€186/MWh).

The analysis of production costs shows that photovoltaics are increasingly competitive compared to fossil fuels. Technological advancements and increased production capacity significantly reduce the cost of solar electricity. It is therefore essential to consider these developments to assess the real profitability of solar projects.

Here is an overview of comparative production costs:

Energy Source	LCOE (€/MWh) (estimate)	Year (estimate)
Residential Solar (3 kWp)	155 – 283	2020
Large Rooftop Solar	25 – 38	2048 (forecast)
Ground-Mounted Solar	23 – 32	2050 (forecast)
Gas Power Plant (combined cycle)	50 – 66	–
New Nuclear (EPR)	110 – 120	–

The sun offers us clean and renewable energy thanks to photovoltaics. It’s an excellent way to protect our planet while saving money. Think about it, it’s a smart investment for the future. To learn more about how solar can help you, visit our website today!

In Summary: LCOE, a Tool for Clarity

Ultimately, LCOE is like a compass for assessing the profitability of a solar project. We’ve seen that its value depends on many things: the cost of installation, how much it costs to run the solar farm, how much electricity it produces, and how long it will last. The figures show that the larger the installation, the more LCOE tends to decrease, which is quite logical. And then, we must not forget to compare this production cost with the price at which electricity can be sold, or the price at which it is bought. It is by making this comparison that we can get a precise idea of whether a solar project will be profitable or not. It’s a tool that helps make informed decisions, even though the world of solar energy is evolving rapidly and costs continue to fall.

Frequently Asked Questions

What is LCOE and why is it important for solar?

LCOE, or Levelized Cost of Energy, is like the total cost price of a solar energy project over its entire lifespan. It takes everything into account: the cost of installing the panels, their maintenance, their lifespan, and how much electricity they produce. It’s an essential tool for determining if a solar project is truly profitable.

What are the main elements that influence the cost of a solar project?

Several things play a role. First, there’s the cost of the installation itself (panels, inverter, etc.). Then, there are the annual costs to operate and maintain the installation. The amount of electricity the system will produce and how long it will last are also very important. Finally, how the project is financed and the expected return also matter.

Does a large solar installation ultimately cost less than a small one?

Yes, often. When you install a lot of panels at once, the cost per unit of energy produced (LCOE) tends to decrease. It’s a bit like buying in bulk: the unit price is more advantageous. So, a large solar farm can be more profitable than a small rooftop installation.

Does the location where solar panels are installed change the cost?

Absolutely. The sun shines brighter in some regions than in others. An installation in the south of France, for example, will produce more electricity than an identical installation in the north. The more sunshine there is, the more energy is produced, and therefore the lower the cost per unit of energy (LCOE) can be.

What is the difference between a building-integrated solar panel and one installed on top?

When a panel is ‘building-integrated’, it replaces part of the roof and ensures waterproofing. This is often a bit more expensive to install. ‘On-roof’ panels are simply fixed onto the existing roof. They are generally less costly, which can make their LCOE more attractive.

How does discounting affect the calculation of a solar project’s cost?

Discounting is a way of saying that one euro today is worth more than one euro in the future. For a long-lasting solar project, this difference in the value of money over time must be taken into account. A higher discount rate (often used for private projects) makes the total cost of the project higher, as it places more value on future expenses.

Has solar become more affordable in recent years?

Yes, dramatically! The cost of producing solar electricity has fallen enormously. Prices have dropped impressively, making photovoltaics increasingly competitive compared to other energy sources. Forecasts show that this trend is likely to continue.

Is consuming your own solar electricity (self-consumption) profitable without a battery?

Self-consumption without a battery can be interesting, as it allows for savings on grid connection fees. However, all the electricity you produce and do not immediately consume is lost. Although installation costs have decreased, the LCOE can be slightly impacted, but the savings on the electricity bill remain the main advantage.