HOMER Knowledge Base

HOMER Knowledge Base

Economic modeling

I see that the way homer works is that it calculates NPC and places the different configurations in an increasing NPC order, also it tell us the COE, I believe that is the load price at which we will sell this electricity right?

 

You are right that HOMER ranks system in order of ascending total NPC.  To calculate the COE, HOMER first calculates the total annualized cost, which is the total NPC times the capital recovery factor.  Then it divides the total annualized cost [$/yr] by the total electric load served [kWh/yr] to find the COE [$/kWh].

If you sold the electricity at the COE, you would cover your costs but make no profit.