Overview
- Lazard's 2026 LCOE/LCOS report, released Monday, shows combined‑cycle natural gas generation costs rose to $90 per megawatt‑hour, the highest in at least 17 years.
- Unsubsidized utility‑scale solar LCOE increased to about $40–$98/MWh and onshore wind rose to roughly $68–$99/MWh, each up more than 10% year‑on‑year to multi‑year highs.
- Standalone utility battery storage costs reversed prior declines, with a 100 MW/4‑hour system posting LCOS of roughly $210–$292/MWh in 2026.
- Lazard links the cost increases to rapid growth in AI and hyperscale data centres, higher capital and interest rates, plus tariffs and FEOC‑related supply‑chain rerouting that raise equipment prices.
- Despite recent rises, Lazard finds utility solar and onshore wind remain the lowest‑cost new‑build options, but higher firming and transmission needs mean more gas, grid upgrades, or storage will be required to meet growing demand.