levelized

Levelized is an adjective meaning made level or even. In technical usage, it appears in phrases such as levelized cost of energy (LCOE) and levelized avoided cost of energy (LACE). The term signals that costs or benefits are averaged over time to allow comparisons across technologies with different lifetimes and output profiles.

LCOE is the net present value of the total life-cycle costs of building and operating a power plant, divided by the total electricity it is expected to generate over its lifetime. It includes capital costs, operations and maintenance, fuel (for applicable plants), financing costs, and decommissioning, and it accounts for the plant’s capacity factor and economic life through discounting.

Typical inputs are capital expenditure, O&M costs, fuel prices, plant lifetime, capacity factor, discount rate, and decommissioning. Policy incentives, financing terms, inflation, and projected technology improvements can shift the result.

LCOE is a widely used, relatively simple metric for comparing technologies, but it has limitations. Results depend on subjective assumptions and chosen discount rates, and LCOE does not capture grid integration costs, reliability, intermittency, or system-level value. It is often complemented by other metrics such as LACE and integrated resource planning analyses.