1 Levelized Cost of Energy and State Energy Statutes 1.1 Applicable Statutes Statute 16B.32 Energy Use (2015) Subd. 1a) "The predesign must include an explicit cost and price analysis of complying with the requirement compared with the present and future costs of energy supplied by a public utility from a location away from the building site and the present and future costs of controlling carbon emissions." 1.2 Levelized Cost of Energy Levelized Cost of Energy (LCOE) Approach Using this approach, construction projects will be required to install renewable energy on site with output equal to or greater than 2% of total building energy use as stated in B3 Guideline E.2 Renewable Energy when… Definition of Levelized Cost of Energy where installation cost = a conservative estimate based on research of recent renewable energy project costs in Minnesota financing cost = $0 (usually) for state projects fuel costs = $0 (usually) for wind/PV projects; solar hot water will typically require some fuel costs for operation of a backup system maintenance costs = an estimate based on research conducted by Energy Information Administration (EIA) or national research laboratory such as PNNL MWh production = total energy production over service life service life = 20 - 25 years depending on system type and cost of grid electricity = time-weighted average price from utility + fees and surcharges cost of carbon = currently set at $37/metric ton (U.S. technical estimate 2013) Example Calculation - PV Installation
1 Levelized Cost of Energy and State Energy Statutes 1.1 Applicable Statutes Statute 16B.32 Energy Use (2015) Subd. 1a) "The predesign must include an explicit cost and price analysis of complying with the requirement compared with the present and future costs of energy supplied by a public utility from a location away from the building site and the present and future costs of controlling carbon emissions." 1.2 Levelized Cost of Energy Levelized Cost of Energy (LCOE) Approach Using this approach, construction projects will be required to install renewable energy on site with output equal to or greater than 2% of total building energy use as stated in B3 Guideline E.2 Renewable Energy when… Definition of Levelized Cost of Energy where installation cost = a conservative estimate based on research of recent renewable energy project costs in Minnesota financing cost = $0 (usually) for state projects fuel costs = $0 (usually) for wind/PV projects; solar hot water will typically require some fuel costs for operation of a backup system maintenance costs = an estimate based on research conducted by Energy Information Administration (EIA) or national research laboratory such as PNNL MWh production = total energy production over service life service life = 20 - 25 years depending on system type and cost of grid electricity = time-weighted average price from utility + fees and surcharges cost of carbon = currently set at $37/metric ton (U.S. technical estimate 2013) Example Calculation - PV Installation
App-E-2a-User-Guide-LCOE-Calculator-PREDESIGN.docx