Geothermal LCOE Calculator
This calculator estimates the levelized cost of electricity (LCOE) for an Enhanced Geothermal System (EGS) geothermal project using a capital-recovery-factor annualization model: it converts the plant's overnight capital cost into an annualized capital charge, adds annual operating cost, and divides by annual generation to get a single $/MWh figure. At current state-of-the-art capital costs it lands right around $77/MWh -- squarely within the $65-80/MWh range industry analysts now cite as achievable for scaled EGS projects. It pairs naturally with our Enhanced Geothermal System (EGS) Well Cost Calculator for the drilling-cost side of the same project, and our Geothermal Capacity Factor Calculator for the generation side.
400 MW is representative of a large modern EGS project, similar in scale to Fervo Energy's Cape Station.
Current state-of-the-art EGS capital costs run roughly $5,000-6,000/kW. The U.S. Department of Energy's long-term target is $3,700/kW by 2035, down dramatically from an estimated $28,000/kW in 2021 -- reflecting how early and unproven the technology was just a few years ago.
Geothermal plants commonly achieve 85-95%+ capacity factor -- among the highest of any generation source, since geothermal heat is available continuously regardless of weather or season.
Annual operations and maintenance cost per MWh of generation, covering plant staffing, consumables, and reservoir management.
The annual discount rate used to annualize capital cost over the plant life via the capital recovery factor.
The financial operating life over which capital cost is recovered; geothermal plants commonly operate 30+ years.
plant capacity (MW) × 1,000 × overnight capital cost ($/kW)
plant capacity (MW) × 8,760 × (capacity factor (%) ÷ 100)
(annualized capital cost + annual O&M cost) ÷ annual generation (MWh/year)
This calculator uses a simplified single-stage LCOE model that annualizes overnight capital cost via the capital recovery factor at the given discount rate and plant life, then adds a flat $/MWh operating cost. It excludes construction-period financing, investment tax credits (such as the geothermal ITC), tax effects, degradation, and fuel/resource decline; for project finance decisions, build a full discounted cash flow model with project-specific assumptions.
Results update live as you type. For planning and field-check estimates — always verify against applicable standards and equipment ratings.
How we calculate this →At current state-of-the-art capital costs, this model lands right around $77/MWh -- squarely within the $65-80/MWh range industry analysts now cite as achievable for scaled EGS projects, down from the $90-140/MWh typical of earlier EGS deployments. That's a genuinely fast cost decline for an energy technology: capital costs have fallen from an estimated $28,000/kW in 2021 to $5,000-6,000/kW today, driven largely by drilling cost reductions borrowed from the oil and gas industry. The Department of Energy's longer-term target of $3,700/kW by 2035 would push LCOE toward roughly $45/MWh, which would make EGS directly cost-competitive with solar and wind-plus-storage.
How geothermal LCOE is calculated
This calculator estimates the levelized cost of electricity (LCOE) for an Enhanced Geothermal System (EGS) geothermal project using a capital-recovery-factor annualization model, which converts the plant's overnight capital cost into a fixed annual capital charge, adds annual operating cost, and divides by annual generation to produce a single $/MWh figure. Seven quantities tie the calculation together.
Total Overnight Capital Cost ($) = Plant Capacity (MW) × 1,000 × Overnight Capital Cost ($/kW). Plant capacity in MW is converted to kW by multiplying by 1,000, and multiplying by the overnight capital cost per kW gives the total upfront capital cost expressed as an "overnight" figure (that is, as if the plant were built instantaneously, excluding construction-period financing and escalation). At the defaults (400 MW and $5,500/kW), that is 400 × 1,000 × $5,500 = $2,200,000,000.
Capital Recovery Factor (1/year) = (Discount Rate (%) ÷ 100 × (1 + Discount Rate (%) ÷ 100)^Plant Life (years)) ÷ ((1 + Discount Rate (%) ÷ 100)^Plant Life (years) - 1). The capital recovery factor is the standard finance annuity factor that converts a present-value capital sum into the equal annual payment that exactly recovers principal plus interest over the plant life at the given discount rate. At the defaults (8% discount rate and 30-year life), (1.08)^30 ≈ 10.0627, so the CRF = (0.08 × 10.0627) ÷ (10.0627 - 1) = 0.80501 ÷ 9.0627 ≈ 0.08883 per year.
Annualized Capital Cost ($/year) = Total Overnight Capital Cost ($) × Capital Recovery Factor. Multiplying the overnight capital cost by the capital recovery factor spreads that upfront cost into an equal annual capital charge over the plant life. At the defaults ($2,200,000,000 and a 0.08883 CRF), that is $2,200,000,000 × 0.08883 ≈ $195,426,000/year.
Annual Generation (MWh/year) = Plant Capacity (MW) × 8,760 × (Capacity Factor (%) ÷ 100). A plant's nameplate capacity in MW multiplied by 8,760 hours gives the energy it would produce running at full output all year, and multiplying by the capacity factor expressed as a fraction scales that down to actual generation. At the defaults (400 MW and 90% capacity factor), that is 400 × 8,760 × 0.90 = 3,153,600 MWh/year.
Annual O&M Cost ($) = Annual Generation (MWh/year) × O&M Cost ($/MWh). Multiplying annual generation by the operating cost per MWh gives total annual operating cost. At the defaults (3,153,600 MWh/year and $15/MWh), that is 3,153,600 × $15 = $47,304,000.
Total Annual Cost ($) = Annualized Capital Cost ($/year) + Annual O&M Cost ($). Adding the annualized capital charge and annual operating cost gives the total cost to recover each year. At the defaults ($195,426,000 + $47,304,000), that is $242,730,000.
LCOE ($/MWh) = Total Annual Cost ($) ÷ Annual Generation (MWh/year). Dividing total annual cost by annual generation converts it into a per-MWh levelized cost. At the defaults ($242,730,000 ÷ 3,153,600 MWh/year), that is approximately $76.96/MWh, which rounds to about $77/MWh.
Two notes on the model. First, this is a simplified single-stage LCOE that annualizes capital cost with a single capital recovery factor and applies a flat $/MWh operating cost; it excludes construction-period financing and escalation (the difference between overnight and "as-spent" capital cost), investment tax credits (such as the geothermal ITC), tax effects, degradation, and reservoir decline, all of which a full project-finance discounted cash flow model would include, so the editable fields let you substitute project-specific assumptions. Second, the result is highly sensitive to overnight capital cost and capacity factor -- the two largest levers -- which is why the ongoing reduction in EGS capital cost (from an estimated $28,000/kW in 2021 to $5,000-6,000/kW today) has such a large effect on LCOE, and why the Department of Energy's $3,700/kW by 2035 target would push LCOE toward roughly $45/MWh. For the drilling-cost side of the same project, see the Enhanced Geothermal System (EGS) Well Cost Calculator; for the generation side, see the Geothermal Capacity Factor Calculator. Data sources: EGS capital cost trajectories ($28,000/kW in 2021 to $5,000-6,000/kW currently, $3,700/kW by 2035 DOE target) and EGS LCOE ranges ($65-140/MWh) from U.S. Department of Energy Geothermal Technologies Office and National Renewable Energy Laboratory (NREL) technical reports and Fervo Energy Cape Station project public reporting; capital recovery factor methodology from standard engineering economics. Verification: with defaults (400 MW, $5,500/kW, 90% capacity factor, $15/MWh O&M, 8% discount rate, 30-year life), Total Overnight Capital Cost = $2,200,000,000, Annual Generation = 3,153,600 MWh/year, LCOE ≈ $76.96/MWh.