Solar Is Now 33% Cheaper Than Gas Power in US, Guggenheim Says
High Voltage Maintenance Training Online
Our customized live online or in‑person group training can be delivered to your staff at your location.
- Live Online
- 12 hours Instructor-led
- Group Training Available
US Renewable Energy Cost Advantage signals cheaper utility-scale solar and onshore wind versus natural gas, with LCOE declines, tax credits, and climate policy cutting electricity costs for utilities and grids across the United States.
The Core Facts
Cheaper solar and wind than natural gas, driven by LCOE drops, tax credits, and policy, lowering US electricity costs.
Utility-scale solar is about one-third cheaper than gas
Onshore wind costs roughly 44 percent less than natural gas
Policy and tax credits accelerate renewables and cut power prices
Natural gas’s dominance as power-plant fuel in the US is fading fast as the cost of electricity generated by US wind and solar projects tumbles and as wind and solar surpass coal in the generation mix, according to Guggenheim Securities.
Utility-scale solar is now about a third cheaper than gas-fired power, while onshore wind is about 44% less expensive, Guggenheim analysts led by Shahriar Pourreza said Monday in a note to clients, a dynamic consistent with falling wholesale power prices in several markets today.
“Solar and wind now present a deflationary opportunity for electric supply costs,” the analysts said, which “supports the case for economic deployment of renewables across the US,” as the country moves toward 30% wind and solar and one-fourth of total generation in the near term.
Gas prices have surged amid a global supply crunch after Russia’s invasion of Ukraine, while tax-credit extensions and sweeping US climate legislation have brought down the cost of wind and solar, even as renewables surpassed coal in 2022 nationwide. Renewables-heavy utilities like NextEra Energy Inc. and Allete Inc. stand to benefit, and companies that can boost spending on wind and solar, as wind, solar and batteries dominate the 2023 pipeline, will also see faster growth, Guggenheim said.
