Onshore wind is currently the cheapest source of energy for producing electricity, with a global average cost of $0.034 per kilowatt-hour (or $34 per megawatt-hour). Utility-scale solar comes in a close second at $0.043/kWh. Both are significantly cheaper than any fossil fuel or nuclear option for new power plants, and the gap continues to widen.
How Electricity Costs Are Compared
The standard way to compare energy sources is a metric called the “levelized cost of energy,” or LCOE. It rolls every expense into a single number: building the plant, buying fuel (if any), maintaining equipment, and eventually decommissioning it, all divided by the total electricity the plant will produce over its lifetime. The result is a cost per megawatt-hour that lets you compare a solar farm to a gas plant on equal footing.
LCOE isn’t perfect. It doesn’t capture the cost of keeping the lights on when the sun isn’t shining or the wind isn’t blowing. But it’s the most widely used benchmark for answering the basic question: which source produces the cheapest electricity?
The Current Cost Rankings
Based on 2024 data from the International Energy Agency and Lazard’s annual cost analysis, here’s how the major sources stack up for new power plants:
- Onshore wind: $34/MWh globally, with Lazard’s U.S. estimate at $45/MWh before subsidies
- Utility-scale solar: $43/MWh globally, $29/MWh in the U.S. before subsidies
- Hydropower: $57/MWh globally
- Natural gas (combined cycle): roughly $59/MWh in the U.S.
- Geothermal: $64/MWh
- Natural gas (simple turbine): $67/MWh
- Nuclear (small modular reactors): $80–90/MWh
- Offshore wind: $102/MWh
- Rooftop solar: $122/MWh
The U.S. numbers from Lazard are unsubsidized, meaning they reflect raw production costs without government tax credits. With federal incentives, utility-scale solar drops to about $19/MWh and onshore wind to $29/MWh in the U.S., making them even more dominant. Geothermal benefits heavily from subsidies too, falling from $64 to $27/MWh.
Why Solar and Wind Are So Far Ahead
The main reason is simple: no fuel costs. Once you build a solar farm or wind turbine, the “fuel” (sunlight, wind) is free. A natural gas plant, by contrast, must continuously buy fuel for its entire operating life, and those prices fluctuate. The EIA notes that higher natural gas prices in pessimistic supply scenarios push gas generation costs even further above renewables.
Manufacturing costs have also plummeted. Solar panel prices have dropped by more than 90% since 2010, and wind turbine technology has followed a similar trajectory. The equipment is mass-produced at global scale now, which keeps driving prices down. Meanwhile, building new coal or nuclear plants requires enormous upfront capital and years of construction, both of which inflate the final cost per unit of electricity.
Renewables Are Beating Existing Coal Plants
Here’s the part that surprises most people: it’s not just cheaper to build new solar and wind than new fossil fuel plants. In many cases, building brand-new renewable capacity is cheaper than simply continuing to run coal plants that already exist. The International Renewable Energy Agency found that globally, over 800 gigawatts of existing coal capacity costs more to operate than commissioning new solar or onshore wind projects. In the United States specifically, 61% of all coal plant capacity (149 GW) is more expensive to keep running than replacing it with new renewables.
This is a remarkable shift. It means coal isn’t just losing the competition for new construction. It’s becoming uneconomic even as an already-built asset.
What About Storage Costs?
The obvious limitation of solar and wind is intermittency. The sun sets, the wind dies down. When you add battery storage to make these sources more reliable, the cost goes up, but not as dramatically as you might expect.
Lazard estimates utility-scale solar paired with battery storage at $60/MWh before subsidies ($43/MWh with tax credits). Onshore wind plus storage comes in at $74/MWh ($62/MWh subsidized). These combined systems are still competitive with or cheaper than new natural gas plants, and they’re far cheaper than new nuclear.
The National Renewable Energy Laboratory notes that every $10/MWh increase in grid charging costs (the price of electricity used to top off the battery from the grid) adds only about $3/MWh to the overall system cost. That’s because grid charging typically supplies just a quarter of the battery’s energy, with the rest coming directly from the attached solar panels.
Nuclear Remains Expensive
Nuclear power produces reliable, carbon-free electricity around the clock, which gives it a real advantage over intermittent renewables. But the economics are tough. Small modular reactors, often promoted as the future of affordable nuclear, have projected costs of $80–90/MWh. That’s roughly double the cost of onshore wind or utility-scale solar, and research published in Applied Energy found that SMRs don’t represent a dramatic improvement over conventional large reactors. Their capital costs per kilowatt are actually about 41% higher than large reactors on average, though they carry less financial risk because of shorter, more predictable construction timelines.
Location Changes the Math
Global averages hide significant regional variation. Solar is cheapest in places with intense, consistent sunlight: the Middle East, North Africa, the southwestern United States, Australia, and parts of India. Onshore wind excels in the U.S. Great Plains, Northern Europe, Patagonia, and parts of China where steady wind patterns are reliable year-round.
In the cloudier, calmer corners of the world, natural gas or hydropower may still hold a cost edge for new generation. Hydropower, at $57/MWh globally, is the cheapest option in countries with abundant rivers and elevation changes, like Norway, Brazil, and parts of Canada. But most of the best hydropower sites worldwide are already developed, limiting its growth potential compared to solar and wind, which can be built almost anywhere.
The Bottom Line on Cost
For new electricity generation in most parts of the world, onshore wind and utility-scale solar are the cheapest options available today, with or without government subsidies. Natural gas remains relevant as a flexible backup source, and hydropower is highly competitive where geography allows it. Nuclear and offshore wind serve important roles in grid reliability and energy diversity, but they cost two to three times more per unit of electricity than the leading renewables. Even when you add battery storage to solar or wind to address intermittency, the combined cost stays in the range of natural gas, making renewables-plus-storage the default choice for most new power projects worldwide.