WattThe?!
Back to
tools

LCOH Calculator: Levelized Cost of Hydrogen per Kilogram

The levelized cost of hydrogen (LCOH) is the all-in cost to produce one kilogram of hydrogen across a project's entire life — capital, operating costs, and electricity combined, then divided by total output. It's the hydrogen equivalent of LCOE for solar and wind: the single number that determines whether a green hydrogen project is economically competitive. Today's green hydrogen typically lands in the $4–8/kg range versus roughly $1–2/kg for conventional "grey" hydrogen made from natural gas. Cheap electricity and high utilization are the biggest levers — the electricity cost alone can represent 60–80% of LCOH.

Electrolyzer capital cost($/kW)
Electrolyzer power capacity(MW)
Capacity factor 50%
Electrolyzer efficiency(kWh/kg H₂)
Electricity price($/MWh)
Electrolyzer lifetime(years)
Annual O&M cost 3% of capital/yr
Discount rate 8%
LCOH
$4.17/kg H₂

levelized cost of hydrogen

Annual H₂ production
842metric tons/yr

842,308 kg/yr

Capital share
39.9%

$1,401,954.54/yr annualized

O&M share
10.2%

$360,000.00/yr

Electricity share
49.9%

$1,752,000.00/yr

Results update live as you type. For planning and field-check estimates — always verify against applicable standards and equipment ratings.

How we calculate this →

How LCOH is calculated: capital recovery, O&M, and electricity

LCOH follows the same levelized-cost framework used for solar and wind. Total capital cost ($/kW × MW × 1,000) is converted to an annualized charge using a capital recovery factor (CRF) — the standard annuity formula that spreads the upfront investment over the project lifetime at the chosen discount rate. A 15-year project at 8% discount gives a CRF of about 0.117, meaning roughly 11.7% of total capital is the annual debt-service equivalent.

Annual hydrogen production depends on how hard the electrolyzer runs. Capacity factor is the fraction of the year at full power: 50% means 4,380 operating hours per year. Annual output in kg equals power (kW) × hours ÷ efficiency (kWh/kg). A 10 MW electrolyzer at 52 kWh/kg running 50% of the year produces about 840,000 kg (840 metric tons) annually.

Electricity cost is the dominant term: annual H2 production (kg) × efficiency (kWh/kg) × electricity price ($/kWh). At $40/MWh and 52 kWh/kg, electricity costs $2.08/kg before any capital or O&M is added. Drop the power price to $20/MWh and electricity cost falls to $1.04/kg, illustrating why co-location with cheap renewable generation is the central strategy for competitive green hydrogen.

LCOH = (annualized capital + annual O&M + annual electricity cost) ÷ annual kg produced. The breakdown reveals the lever: in most scenarios electricity is 60–80% of LCOH, making power price and capacity factor far more important than squeezing capital costs.

Frequently asked questions

LCOH is the all-in average cost to produce one kilogram of hydrogen over the full life of a project — capital, operating, and electricity costs combined, then divided by total hydrogen output. It is the standard metric for comparing hydrogen production projects across technologies and scales, equivalent to the levelized cost of electricity (LCOE) for power plants. A lower LCOH means a more economically competitive project.

Conventional 'grey' hydrogen is produced by steam methane reforming (SMR) of natural gas — a mature, highly optimized process with low capital costs and cheap feedstock, yielding hydrogen at roughly $1–2/kg. Green hydrogen uses electrolysis powered by renewable electricity to split water, which today requires more expensive electrolyzer capital ($800–1,500/kW installed versus much lower SMR capital), consumes substantial electricity (50–55 kWh per kg), and often runs at lower capacity factors than a continuous gas-fed plant. The result is a current cost gap of 2–4x, which is closing as electrolyzer costs fall and renewable electricity prices drop.

Three levers close the gap. First, cheap electricity: at $20/MWh renewable power, electricity alone costs only $1.04/kg at 52 kWh/kg efficiency, and with sub-$10/MWh surplus solar the electricity component can fall below $0.50/kg. Second, high utilization: running the electrolyzer 80% of the year instead of 50% spreads fixed capital cost over 60% more kilograms, cutting LCOH even with no change in hardware cost. Third, falling electrolyzer costs: the industry targets $300–500/kW by 2030 (from $1,000–1,500/kW today), which would cut the capital component of LCOH by 60–70%. Combining all three — $20/MWh power, 80% capacity factor, $400/kW electrolyzer — can push green hydrogen toward $1.50–2.00/kg, within striking range of grey hydrogen prices.

Related calculators

Green Hydrogen Production CalculatorUtility-Scale Solar Array Calculator