Lazard’s latest analysis of the levelized costs of energy concludes that wind and solar are the least expensive new-build power generation for the 10th year in a row.

The LCOE of new gas-fired generation, meanwhile, has hit a 10-year high, and shortages of equipment are expected to drive further steep increases. However, existing baseload generation is increasingly competitive with new renewables, which have seen recent increases in their own LCOEs.

Still other factors have dropped the 2025 levelized cost of battery energy storage systems to their 2020 level.

Lazard issued the 18th edition of its “Levelized Cost of Energy+” report June 16.

The financial advisory firm noted the report is a present-day snapshot based on the last 12 months in the U.S. power industry, rather than a prediction of future trends.

“Significant shifts expected” is what the report offers by way of predictions. Supply chain normalization and productivity enhancements could offset the rising LCOE of gas-fired generation over the longer term, for example, and expensive nuclear construction is poised to benefit from scale and development efficiencies.

Lazard also notes that other cost factors are shifting: Several grid operators are refining their capacity accreditation methodologies to incorporate the seasonal adjustments and diversity benefits of the increasing amount of renewable generation. This could significantly impact future firming costs, the report said.

There is no single cost offered for a given type of generation — the LCOEs sprawl across a wide range that grows even wider as variables are factored in.

Utility-scale photovoltaics, for example, run $38/MWh to $78/MWh. That falls to $20-$45/MWh if investment tax credits, production tax credits and economic community adders are factored in, and it jumps to $50-$131/MWh if storage is added and there are no tax credits — a scenario that may come to pass soon. (See Senate Finance Committee Looks to Eliminate Energy Tax Credits in 2028.)

New onshore wind without storage and without tax credits would have an LCOE estimated at $37-$86/MWh.

By comparison, a combined-cycle gas-burning plant runs $48-$107/MWh, or $41-$116/MWh factoring in 25% fuel price adjustments lower and higher. Adding a carbon price of $40-$60/ton, as some policymakers have proposed, would bump its LCOE to $63-$132/MWh.

Cost of capital is another key factor, and here again there is no single formula, because each type of generation has a different risk vs. return profile, and their costs rise or fall at different rates.

One unsurprising detail: Existing paid-for assets have a lower LCOE than newly built assets. The marginal cost of operation can drop as low as $24/MWh for a fully depreciated combined-cycle gas plant, for example, or just half the lowest calculated LCOE of a new gas plant.

The report calculates the most expensive type of generation would be a newly built peaker plant burning gas at a cost of $3.45/MMBtu. With a capacity factor of 10-15%, its LCOE would be in the range of $149-$251/MWh.

Lazard notes that renewables have grown into an established industry comprising 20% of the U.S. electrical system in the time it has been compiling its LCOE reports.

Data from its current and past reports show concurrent changes in LCOE: Utility-scale solar dropped from $359/MWh in the 2009 report to $58/MWh in 2025, while onshore wind dropped from $135/MWh to $61/MWh.

The data also show those 2025 LCOEs are significantly higher than in the 2021 report, when utility-scale solar and onshore wind bottomed out at just $36/MWh and $38/MWh, respectively.

Battery energy storage system prices are moving slightly in the opposite direction. Lazard places the 2025 levelized cost of storage for a 100-MW four-hour utility-scale standalone BESS at $115-$254/MWh, sharply lower than 2024 and slightly lower than 2020.

It attributes this to market factors, such as slower than expected electric vehicle demand and a resulting oversupply of cells, as well as to advances in technology like increased cell capacity and energy density.