3.3.1. Cash Flow Analysis of the Project

The project's cash flow analysis is made with RETScreen, which calculates and analyses variables associated with the project, being these either technological, economic or environmental. The information that must be supplied to the software is as follows:


The parameters specifying the above characteristic are provided in the technical description of the system in Section 4.2.

#### 3.3.2. Levelized Cost of Energy (LCOE)

The LCOE can be used to assess the economic viability of energy projects. The LCOE can be interpreted as the minimum average price at which the generated electricity should be sold (throughout its useful life) to reach a similar cost to other energy projects. All expenses associated with the project must be considered [35,53]. It can be calculated using Equations (1) and (2).

$$LCOE = \frac{CRF \cdot CAPEX + OPEX}{E\_t} \tag{1}$$

with

$$CRF = \frac{i \cdot (1 + i)^N}{(1 + i)^N - 1} \tag{2}$$

and:

*CAPEX*: capital expenses. *OPEX*: operational expenses.

*Et*: produced electricity in year t.

*CRF*: capital recovery factor.

*N*: project lifetime

*i*: interest rate.
