Interviewer view · keep this screen to yourself

Levelized cost of a solar plant, and why financing matters

You run the case. Read the prompt, answer questions from the notes below, and share data only when the candidate asks for it or gets stuck. Score at the end.

Case timer

00:00

Target length:

1. Read the prompt aloud

Read it slowly, then pause. Let the candidate ask questions before they structure.

Solmira Power (a fictional company) plans a 100 MW solar plant in a sunny region. Capex is USD 60 million. Capacity factor is 25 percent. Yearly operation and maintenance costs USD 1.2 million. Assume a capital recovery factor of 8 percent per year. What is the levelized cost per MWh? Then recompute it if the capital recovery factor is 11 percent, as it might be in a country where investors demand a higher return.

2. Answers to clarifying questions

This case has no scripted clarifying answers. Answer from the prompt, and say "assume what you think is reasonable" if the prompt does not cover it.

3. A model structure

Compare the candidate's structure with this one. A different split can be just as good if it is clean and fits the problem.

LCOE = (yearly capital charge + yearly running cost) divided by yearly MWh
- Yearly MWh = MW x 8,760 hours x capacity factor
- Yearly capital charge = capex x capital recovery factor
- Running cost = operation and maintenance (no fuel for solar)

4. The working, step by step

Each step shows how a strong candidate works it out. Share a new fact from it only when the candidate asks or is stuck, and let them do the math: the result in the dark box is what they should reach.

Step 1: Yearly output
What a strong candidate does: 100 MW for 8,760 hours at 25 percent.
Yearly output (MWh): 100 × 8,760 × 0.25 = 219,000
Step 2: Yearly cost at 8 percent
What a strong candidate does: Capital charge of 8 percent of 60, plus 1.2 of running costs.
Yearly cost (USD million): 60 × 0.08 + 1.2 = 6
Step 3: LCOE at 8 percent
What a strong candidate does: USD 6 million divided by 219,000 MWh.
LCOE (USD per MWh): 6 × 1,000,000 ÷ 219,000 = 27.4
Step 4: LCOE at 11 percent
What a strong candidate does: Capital charge of 11 percent of 60 is 6.6, plus 1.2, is 7.8 million a year.
LCOE at higher cost of capital (USD per MWh): (60 × 0.11 + 1.2) × 1,000,000 ÷ 219,000 = 35.62

The recommendation to listen for

At the end, say: "The CEO walks in. What is your recommendation?"

Solmira should secure low-cost financing before building, because the plant costs about USD 27.4 per MWh with an 8 percent capital recovery factor but about USD 35.6 at 11 percent. First, that is 30 percent more for the same panels and the same sun, since capital is USD 4.8 million of the USD 6 million yearly cost. Second, this means guarantees, stable contracts and a creditworthy buyer can matter more than cheaper panels. The risk is a capacity factor below the 25 percent planned. As a next step, test financing offers from development lenders.

Risks a strong answer names: A lower capacity factor than planned raises LCOE; LCOE ignores when the power is produced: solar power at noon may be worth less than power in the evening peak.

Score the candidate

Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.

This case has no exhibit. Score Exhibit reading on how the candidate used the data you gave them: did they pick out the number that matters and say what it means?

Structuring

1: No clear structure, or a memorized framework that does not fit the problem.
3: A sensible structure, but with some overlap, a gap, or no clear priority.
5: A structure built for this problem, with no overlap and no gaps, a stated hypothesis, and a clear first step.

Math

1: Frequent errors, no units, or needed heavy help to finish.
3: Right answers but slow or messy working, or one error caught late.
5: Accurate and clearly narrated, with units, a sense check, and what the number means.

Exhibit reading

1: Read the chart aloud without finding the number that matters.
3: Found the key number but gave only part of the so-what.
5: Pulled the right number quickly and said what it means for the case.

Synthesis

1: Summarized what was done, with no clear answer.
3: Gave an answer, but with weak reasons or no next step.
5: Answer first, then two or three reasons with numbers, the main risk, and next steps.

Communication

1: Hard to follow: long silences, no signposting.
3: Clear most of the time, with some rambling.
5: Calm and concise, signposted each step, and checked in with the interviewer.

Total

0 out of 25

Score all five criteria to see the band and the feedback template.