Renewables Still Rank as the Cheapest Source of Electricity — Even Without Tax Subsidies

Now that both solar power and wind power have drastically dropped in costs so far this century, renewable energy continues to be the cheapest source of new electricity.

Lazard announced that finding in its 2026 Levelized Cost of Energy+ Report, released in July. The financial advisory and asset management firm calls its Levelized Cost of Energy (LCOE) the “leading annual benchmark for the cost competitiveness of energy generation technologies.” Its 2026 report explains LCOE represents the illustrative cost of an individual project generating 1 megawatt-hour of incremental electricity. The factors that go into Lazard’s LCOE include installed capital cost, development overhead, fixed and variable operations and maintenance, construction period and costs, and financing.

And Lazard’s 2026 LCOE+ findings show renewables “remain the most cost-competitive form of new-build generation on an unsubsidized basis and will account for the majority of near-term capacity additions in the [United States],” as the company says in a news release about the report.

In this 19th version of Lazard’s LCOE comparison, a megawatt-hour of electricity costs community and commercial/industrial solar PV $88 to $197 to generate, utility solar PV $40 to $98, and onshore wind $37 to $99. Storage adds some cost, bringing the total to $61 to $156 for utility storage and $49 to $140 for onshore wind.

But compare those ranges to the LCOEs of conventional generation: $51 to $129 for gas combined cycle, $72 to $177 for coal (adjusted for inflation), $144 to $276 for gas peaking, and $175 to $255 for U.S. nuclear. Variations in fuel prices increases the LCOE: up to $136 for gas combined cycle, up to $182 for coal, up to $258 for U.S. nuclear, and up to $287 for gas peaking. And the LCOE for some conventional generation goes up even higher with carbon pricing, which legislators can use to address carbon emissions: a carbon price range of $20–$60/ton raises the top of the LCOE range to $152 for gas combined cycle, $252 for coal, and $315 for gas peaking.

Lazard’s report also shows how the LCOEs of utility solar PV and onshore wind has fallen over the years. Since 2009, the LCOE has dropped 81 percent for utility solar PV and 52 percent for onshore wind. Lazard notes that wind and solar LCOEs have risen from their 2021 lows — utility solar PV’s is up 18 percent and onshore wind’s is up 11 percent — but are still far below their historical peaks and also below conventional new-build alternatives.

Commenting on the new Lazard data, Canary Media explains renewables have been affected by challenges including the loss of federal renewable energy tax credits, increased tariffs, and high interest, while conventional generation has been impacted by fuel price fluctuations (due, in part, to Middle East conflicts) and a short supply of turbines.

Still, other research supports renewables’ cost-effectiveness. The International Renewable Energy Agency (IRENA), for example, released a report on renewable power generation costs in 2025 this July. That report also declared renewables as the most cost-competitive source of new electricity generation. Furthermore, IRENA’s research found that more than 90 percent of utility-scale renewable projects commissioned in 2025 delivered power cheaper than that of the cheapest new fossil-fuel plant built in their market.

Altus Power is one of the largest owners and operators of commercial-scale solar in the U.S., with solar projects in 30 states and the District of Columbia. The company has more than 1.3 gigawatts of operating solar assets, more than 450 enterprise customers, and more than 40,000 community solar subscribers. Learn more about Altus Power’s commercial solutions here, and discover the Community Solar Program here.