Solar Power Stays Cheapest Despite 18% Price Hike

Utility-scale solar costs climbed to $40–$98 per megawatt-hour this year, a sharp 18% increase fueled by volatile interest rates, new trade tariffs, and soaring silver prices. Despite these headwinds, solar retains its position as the world's most economical source for new electricity generation, outpacing traditional thermal alternatives.

Money Talk·July 14, 2026·reads: 229

Solar Power Stays Cheapest Despite 18% Price Hike

Lazard’s latest Levelized Cost of Energy+ report highlights how supply chain pressures and import levies on Asian components have eroded cost advantages. New U.S. compliance rules, including the Foreign Entity of Concern mandate, further complicate the procurement landscape for cells and batteries. These expenses are exacerbated by the rising price of silver, an essential raw material for module manufacturing.

Traditional energy sources offer no refuge from these trends. Combined-cycle gas turbine plants hit a 15-year cost peak of $48–$107/MWh, burdened by long lead times and turbine delivery bottlenecks. Regardless, utilities remain committed to gas infrastructure, citing the urgent need to satisfy grid reliability demands from AI data centers and broader electrification efforts.

Onshore wind continues to rival solar, maintaining a competitive range between $37 and $99/MWh. A decade of innovation has nearly halved capital costs since 2010. Modern turbines now feature longer blades and AI-driven monitoring, allowing them to capture energy more efficiently in low-wind environments while reducing long-term maintenance requirements.