LCOE is the metric used by the energy industry to determine how long it will take to pay back the system design and installation and begin turning a profit, similar to the concept of payback in residential and commercial energy systems.
Optimizing LCOE in Utility-scale Solar Installations
Q&A with | Nagendra Cherukupalli, CTO of FTC Solar
Tell us about yourself and FTC Solar.
My name is Nagendra Cherukupalli, and I am currently the Chief Technology Officer (CTO) at FTC Solar. FTC Solar is a provider of solar tracker systems, technology, software, and engineering services. The company’s 2P tracking product, Voyager+, helps utility-scale solar projects achieve higher energy yields and greater power density. At FTC, I am responsible for the Voyager tracker systems that includes structures, controls, and software. I have spent the last twelve years in the renewable energy space as CTO at several companies where I was responsible for introducing several innovative products. With help from various teams, I have helped deliver several hundreds of MWs of solar projects across the world, including the 1km long project on the Narmada Canal in India.
Prior to FTC, I was a Vice President at Cypress Semiconductor, delivering ASICs to the semiconductor market. Prior to Cypress, I managed software design teams at Cadence Design Systems delivering leading Electronic Design Automation (EDA) tools. I started my career at AT&T Bell Labs as a Member of Technical Staff and worked on complex algorithms for the EDA industry.
I am also a Senior Member of the IEEE and hold Master’s and Ph.D. degrees in Computer Science from IIT, Chicago, and am a graduate of the Stanford Executive Program.
What is LCOE and why is it important for utility scale solar installations?
LCOE is the metric used by the energy industry to determine how long it will take to pay back the system design and installation and begin turning a profit, similar to the concept of payback in residential and commercial energy systems. The metric determines energy production needs and if it’s viable to build and integrate into the grid, along with how much money needs to be earned per unit of electricity to see a return on investment (ROI).
LCOE is made up of a numerator and denominator to determine the equation. The numerator has two specific contributors: capital expenditures (CAPEX) and operating expenses (OPEX). CAPEX is the budget spent on purchasing the equipment and the labor spent to build the power plant. OPEX is the day-to-day costs incurred to maintain the business operations and the power plant. The numerator, which is the sum of CAPEX and OPEX defines the total cost of the system; the denominator defines the energy production from the site, and the ratio provides LCOE – levelized cost of energy, for that site. By comparing LCOEs for different sites and implementations, we can rank order by effectiveness, which ones are better and which ones are not.
Optimizing LCOE in utility-scale solar installations is imperative to unlock cost savings and ensure plants operate as efficiently as possible.
What role does infrastructure play when lowering LCOE cost?
A form of Infrastructure is used for everything outside the material used to produce energy – like transportation, storage, labor, packaging, recycling, etc. All these have to play …….