Onshore wind is the cheapest form of energy available today, with a levelized cost of about $30 per megawatt-hour for new projects. Utility-scale solar follows closely at around $38 per megawatt-hour. Both are significantly cheaper than building new natural gas plants, which come in at roughly $53 per megawatt-hour. These figures, from the U.S. Energy Information Administration’s 2025 outlook, represent the total lifetime cost of generating electricity, including construction, fuel, maintenance, and financing.
How Energy Costs Are Compared
The standard tool for comparing energy sources is the levelized cost of electricity, or LCOE. It takes every expense involved in building and running a power plant over its lifetime (typically 30 years), then divides that by the total electricity it produces. The result is a single number in dollars per megawatt-hour that lets you compare wildly different technologies on equal footing. A megawatt-hour is enough electricity to power roughly 330 homes for one hour.
This matters because different energy sources have very different cost structures. Solar and wind have high upfront construction costs but zero fuel costs. Natural gas plants are cheaper to build but require a constant supply of fuel whose price fluctuates. LCOE captures all of that in one figure.
The Current Cost Rankings
For new power plants entering service in 2030 (the earliest year all technologies could realistically come online), the EIA projects these average costs in 2024 dollars:
- Onshore wind: $29.58/MWh
- Utility-scale solar: $37.82/MWh
- Natural gas (combined cycle): $53.44/MWh
Coal is no longer included in the EIA’s new-build cost comparisons, a reflection of how uneconomical new coal plants have become in the U.S. market.
These numbers represent a dramatic shift. As recently as 2010, onshore wind cost about $102 per megawatt-hour and solar was even more expensive. In just over a decade, onshore wind costs dropped to $33 per megawatt-hour by 2021, a roughly 68% decline. Solar followed a similar trajectory. Meanwhile, fossil fuel costs have remained relatively flat or risen with inflation and fuel prices.
Why Wind and Solar Got So Cheap
The cost collapse in renewables comes down to manufacturing scale and improved technology. Solar panel prices dropped as factories, particularly in China, ramped up production to enormous volumes. The installed cost of a utility-scale solar project in the U.S. is now about $1 per watt, a fraction of what it was a decade ago. Wind turbines have gotten physically larger, with longer blades that capture more energy from each tower, spreading the fixed construction costs over more electricity.
Neither technology requires fuel, which eliminates the single biggest ongoing expense for fossil fuel plants. Once a solar farm or wind farm is built, the marginal cost of producing each additional unit of electricity is essentially zero. Natural gas plants, by contrast, must continuously purchase fuel, and gas prices can swing unpredictably based on weather, geopolitics, and pipeline capacity.
The Storage Problem and Its Cost
The obvious catch with wind and solar is that they only generate electricity when the wind blows or the sun shines. To provide reliable, round-the-clock power, they need to be paired with battery storage, and that adds significant cost. A utility-scale lithium-ion battery system with four hours of storage currently costs between $188 and $280 per megawatt-hour on its own, according to Lazard’s 2024 analysis.
When you bundle renewables with storage to create “firm” power that’s available on demand, the combined cost rises but often remains competitive. Wind plus four-hour battery storage ranges from $29 to $75 per megawatt-hour depending on location. Solar plus storage ranges from $44 to $107 per megawatt-hour. The wide ranges reflect geography: windy regions in the Great Plains produce cheaper wind power than the mid-Atlantic, and sunny areas in the Southwest get more out of solar panels than the Midwest.
Even at the higher end, these combined costs overlap with or undercut the cost of new natural gas plants. At the lower end, they beat gas decisively.
Onshore vs. Offshore Wind
Not all wind energy is created equal. Onshore wind is the cost leader, but offshore wind remains roughly twice as expensive. In 2021, offshore wind cost about $75 per megawatt-hour compared to $33 for onshore. The price gap exists because offshore turbines require foundations anchored to the seabed, specialized underwater cables to transmit electricity to shore, and dedicated vessels for installation and maintenance. Every aspect of working in open ocean is more complex and costly.
Offshore wind does have advantages: stronger, more consistent winds and proximity to coastal cities where electricity demand is highest. But purely on cost, onshore wind wins by a wide margin.
Where Nuclear Fits In
Nuclear power generates reliable, carbon-free electricity around the clock, which gives it an advantage over intermittent renewables. But new nuclear plants are extraordinarily expensive to build. The EIA estimates a total overnight construction cost of roughly $7,800 to $8,300 per kilowatt of capacity for conventional reactors and small modular reactors alike. For comparison, utility-scale solar costs about $1 per watt, or $1,000 per kilowatt, making nuclear construction roughly eight times more expensive per unit of capacity.
Nuclear plants do produce electricity nearly 24/7 and last 60 years or more, which spreads that cost over a huge amount of energy. But the upfront capital burden, combined with long construction timelines that frequently run over budget, makes new nuclear one of the most expensive options for electricity generation in most markets today.
The Hidden Cost of Fossil Fuels
The LCOE figures above capture the direct costs of building and operating power plants, but they leave out something enormous: the cost of pollution. The International Monetary Fund estimated in 2025 that fossil fuels receive $725 billion per year in direct government subsidies globally, about 0.6% of world GDP. When you add in the unpriced costs of air pollution, climate change, and other environmental damage, the true subsidy balloons to $7.4 trillion, or 6.4% of global GDP.
Three-quarters of that hidden subsidy comes from health damage caused by air pollution and the economic costs of climate change that fossil fuel producers don’t pay for. The IMF found that eliminating all fossil fuel subsidies would reduce carbon emissions by 46% and prevent 1.1 million premature deaths from air pollution each year. These direct subsidies are also poorly targeted: for every dollar spent subsidizing fuel, only 8 cents reaches the poorest 20% of households.
If these environmental and health costs were factored into electricity prices, the gap between renewables and fossil fuels would be even larger than the LCOE numbers suggest.
What This Means in Practice
For most of the world, onshore wind and utility-scale solar are now the cheapest ways to generate new electricity, and it’s not particularly close. This is why the vast majority of new power capacity being built globally is renewable. In 2023 and 2024, solar alone accounted for more new electricity generation capacity than all other sources combined in many markets.
Your local electricity costs still depend heavily on geography, grid infrastructure, and policy. A home in West Texas benefits from some of the cheapest wind power on Earth. A home in New England, where gas pipelines are constrained and winters are long, faces higher prices regardless of the generation source. But the global trend is clear: the cheapest electron you can produce today comes from wind or sunlight, and the cost advantage is growing.