Lazard: Levelized Cost of Energy

This report finds that renewable energy—particularly solar and onshore wind—remains the lowest-cost source of new power generation in the U.S., even without subsidies. While gas generation remains competitive for existing plants, rising equipment costs and long lead times are expected to drive up gas LCOEs soon. The report highlights declining costs for battery storage, driven by oversupply in the EV market and technology improvements, and notes expanding adoption in states like Arizona and Florida. Lazard also examines the cost of “firming” renewables, finding that as renewable penetration increases, firm capacity value rises, emphasizing the need for a diverse mix of resources—including long-duration storage, small modular nuclear reactors, geothermal, and carbon capture—to maintain reliability as grids decarbonize.