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,, LA UCTION Selge Construction South Bend GESC 2019 Technical Approach When analyzing the feasibility for solar energy projects we look at the Levelized Cost of Energy (LCOE) compared to the Return on Investment (ROI) for the solar project. The calculations for each are shown below: Uvelized -C-Qs-LQ I grgy is calculated by dividing the total out-of-pocket cost of your solar energy system by the estimated total amount of energy your solar system will produce over a given period of time. It is typical to look at a 20-year period when calculating LCOE, although a system will actually continue to produce power for over 30 years. LCOE is more complicated to calculate because there are more factors involved — and because it is an estimate of future production. To roughly calculate LCOE, you should know (or be able to estimate): The total cost of the system. The amount of sunlight die panels are likely to receive daily. An annual average is usually sufficient for this: e.g. 5kWh of pure solar energy per square meter of area per day, on average throughout the year (note that this number will be higher in summer and lower in winter). The overall efficiency of your system. It is common practice to assume that a system will have an overall efficiency rate of 80% — but it could be greater or lesser depending on things like the tilt angle and orientation of your panels, the efficiency of your inverter, and whether or not there is partial shading on your panels. To calculate the LCOE of a solar system, it's also useful to know: « The annual rate of degradation for your solar panels. All solar panels gradually grow less and less efficient over time. • Any Solar Renewable Energy Credit (SREC) benefits you may be eligible for. SRECs payments are usually counted as a `bonus' on top of the electricity bill savings associated with going solar. Unfortunately, Indiana does not currently have a SREC market and we cannot monetize them at this time. As an example, if you live in an area where there is 5.26k`v-Vh of sun daily on average throughout the year and you're looking at a 5kw system with a net cost of $9,000, you can estimate its LCOE accordingly: Solar energy produced over 20 years: 5kW x 5.62kWh of sun daily x 365 days x 20 years x 80% efficiency = 164,000kWh Cost of the system divided by solar energy produced: $14,500 / 164,000kWh = 9¢/kWh. RETURN ON INVESTMENT is figured by calculating your solar panel payback period. To do this you need to determine the combined costs and annual benefits of going solar. To understand each component, review the following information: 23