Energy guide
Renewable vs. fossil fuel electricity costs
A current comparison of new-build levelized costs, plus the boundary between a project-cost model, a generation mix, and a retail electricity price.
Lazard’s 2026 new-build LCOE ranges overlap across technologies
Lazard LCOE+ v19.0 reports unsubsidized new-build ranges of $40–98/MWh for utility solar, $37–99 for onshore wind, $51–129 for gas combined cycle, and $72–177 for coal. These are project estimates, not forecasts: they exclude or separately treat important grid-integration and system costs and cannot predict a retail bill.
Two datasets, two questions
Lazard estimates new-project lifetime costs; EIA records the electricity sources that actually generated power. Neither series alone explains a retail price.
- $37–99
- onshore wind, $/MWh
- $40–98
- utility solar, $/MWh
- $51–129
- gas combined cycle, $/MWh
- 24.6%
- wind + solar + hydro, 2025
LCOE ranges: Lazard LCOE+ v19.0, July 13, 2026. Generation shares: EIA series stored for 2025.
US electricity generation by source (2025)
Share of total US generation, in percent.
- Natural gas
Natural gas
40
- Nuclear
Nuclear
18
- Coal
Coal
17
- Wind 10
Wind
10
- Solar 9
Solar
9
- Hydro 6
Hydro
6
What this shows This chart describes the national generation mix in the stored EIA period. It does not attribute changes in that mix to cost, policy, weather, reliability needs, or any other cause.
What LCOE Measures
Levelized cost of energy (LCOE) divides a project’s discounted lifetime costs by its expected lifetime output. The result is expressed in dollars per megawatt-hour. For unit conversion, $50/MWh equals 5¢/kWh.
The model combines assumptions about construction, financing, operations, maintenance, fuel, output, and project life. Lazard calls its analysis a snapshot rather than a forecasting tool. Its ranges may be exceeded, and a result changes when the assumptions change.
LCOE is not a complete system-cost or retail-price measure. Transmission, distribution, grid balancing, storage, taxes, fees, and existing-system constraints are not all folded into one comparable LCOE number. Those boundaries matter when comparing a variable generator with a dispatchable plant or translating a project estimate into a customer bill.
Unsubsidized New-Build LCOE, July 2026
The table reproduces the headline US ranges in Lazard’s LCOE+ v19.0. It compares new projects on an unsubsidized basis; it does not compare the continuing cost of every existing plant.
| Technology | Low ($/MWh) | High ($/MWh) | Comparison boundary |
|---|---|---|---|
| Onshore wind | 37 | 99 | New build |
| Utility solar PV | 40 | 98 | New build |
| Gas combined cycle | 51 | 129 | New build; fuel-sensitive |
| Solar plus storage | 61 | 156 | New build; paired system |
| Coal | 72 | 177 | Limited new-build data |
| Offshore wind | 105 | 167 | New build |
| Gas peaking | 144 | 276 | New build; fuel-sensitive |
| US nuclear | 175 | 255 | New build; Vogtle-based |
Source: Lazard, LCOE+ v19.0, released July 13, 2026; accessed August 3, 2026. Lazard notes that coal has limited public new-build data and that its US nuclear range is based on the Vogtle units.
Why the Overlap Matters
The ranges do not support a claim that one technology is cheaper in every project. For example, the solar range overlaps the gas combined-cycle range. A specific comparison requires the same location, financing basis, fuel assumptions, operating profile, and system need.
Lazard’s v19 analysis uses a natural-gas price assumption of $3.45/MMBtu, a coal price of $1.47/MMBtu, and a nuclear fuel price of $0.85/MMBtu. Those inputs are part of the model, not promises about future commodity prices.
What the EIA Generation Mix Adds
RateWatt’s generation chart answers a different question: what share of recorded generation came from each source in the displayed period? In the stored $2025 national series, natural gas accounts for $40.4%, coal $16.5%, nuclear $17.5%, and wind, solar, and hydro together $24.6%.
Those shares are observations, not a causal model. A change between periods can reflect several factors, and this dataset alone cannot determine which one mattered. Follow the state-level links for the underlying generation series, not a prediction of future construction or prices.
Why LCOE Is Not Your Electricity Rate
EIA defines average retail electricity price as revenue divided by sales. That statewide average includes the delivered cost of electricity across generation, transmission, distribution, taxes, and fees. It is not an individual utility tariff.
LCOE models the lifetime cost of one generating project. It cannot show which tariff applies to a customer, how a regulator allocates costs, or how a future bill will change. Use RateWatt’s state pages as annual benchmarks and obtain current plan terms from the serving utility or tariff publisher.
Frequently Asked Questions
What is LCOE?
Levelized cost of energy divides a project’s discounted lifetime costs by its expected lifetime electricity output. It is a modelled comparison in dollars per megawatt-hour, not a forecast of a utility bill or the complete cost of operating an electric system.
Does Lazard say solar is always cheaper than gas or coal?
No. Lazard’s July 2026 ranges overlap. Its unsubsidized new-build ranges are $40–98/MWh for utility solar, $51–129/MWh for gas combined cycle, and $72–177/MWh for coal. Project location, financing, fuel assumptions, and technology design affect where a project falls.
Does LCOE include transmission, storage, and reliability costs?
Not as one complete system-cost figure. Lazard describes LCOE as a snapshot and separately discusses storage, firming, and other system considerations. A standalone LCOE should not be used as a complete grid-planning comparison.
Can LCOE predict retail electricity rates?
No. Retail average revenue per kilowatt-hour includes generation, transmission, distribution, taxes, and fees. LCOE estimates one generating project’s lifetime cost, so it cannot by itself predict a state average or an individual tariff.
What does RateWatt’s generation chart establish?
It reports the observed national generation shares stored for 2025. It does not identify why a source gained or lost share, and it does not show the cost of a proposed power plant.
Sources
- Lazard, 2026 LCOE+ release and LCOE+ v19.0 report, July 13, 2026.
- U.S. EIA, factors affecting electricity prices.
- RateWatt generation shares: stored U.S. EIA generation series for $2025.
Primary sources checked August 3, 2026.
Read the measures separately
Project cost, generation share, and retail price are related questions, not interchangeable numbers.
- Inspect generation shares by source and state. Energy sources
- Compare annual statewide retail benchmarks. State rates
- See how EIA data is normalized. Methodology
LCOE is a modelled project-cost range, not a retail-rate forecast or a complete system-cost estimate.
Generation shares are drawn from RateWatt's stored EIA series for 2025. LCOE ranges are separately attributed to Lazard LCOE+ v19.0, released July 13, 2026; they are not part of RateWatt's EIA database. See our editorial standards & corrections policy, the methodology behind these numbers, or report a data error. Data current as of 2025.