Responsible Solar
for Montezuma County
Responsible Solar
For Montezuma County
LCOE
Is an acronym for Levelized Cost of Electricity. The key word here is levelized.
LCOE is the cost of production of electricity. It is not the price of electricity. In May 2025, some of us heard the lecture about LCOE from the developer of Canyonland Solar. It sounded very convincing, considering that the numbers looked like large scale solar facilities are less costly to build and operate than fossil fuel or natural gas powered facilities. It focuses on the cost of generating a kilowatt-hour of electricity. Individual developers determine the parameters used to calculate LCOE, usually including capital costs, income tax, and O & M costs. Resulting figures are highly sensitive to the selection of input values. It can create an illusion.
The FCOE, Full Cost of Electricity, is not usually mentioned in these discussions. It has become a conveniently overlooked nuance.
FCOE incorporates additional factors such as the expense of backup power from fossil or nuclear plants to address the incurable intermittency of solar or wind; the costs associated with grid expansion (usually the burden of this is on the developer); subsidies; or premiums and public support payments. Further, FCOE includes the long-term costs of decommissioning, recycling, and environmental restoration. Don't forget the costs of grid energy storage in the form of a BESS; or payments to a farmer to add livestock or tend crops, and the additional construction costs when including agrivoltaics in the design. Adding all of these provides a more accurate reflection of the true economic and environmental impacts of electricity production. Drilling down to our local level, LCOE probably doesn't include those "millions in tax revenue" for the county or the payments to landowners that commence from the agreement/lease signing and are ongoing through the life of a project.
The lesson here is that selective cost reporting does not include many important aspects of true operational costs. More and more, this discrepancy is gaining attention. Officials need to be aware of the full costs, then heed market signals and economic signals; don't rely alone on the rosy rhetoric that comes from industry promotions.
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