Solar Costs Jump 18% But Still Beat Gas on Price, Lazard Finds
Unsubsidized utility-scale solar costs climbed 18% to $40-$98/MWh, but solar still ranks as the cheapest new-build power source globally, OilPrice.com reports, citing Lazard’s Levelized Cost of Energy+ analysis. The increase stems from higher capital costs, rising interest rates, tariffs, and supply chain pressure, including levies on panels, batteries, and inverters from Asia and a spike in silver prices, a key input for solar cells. Combined-cycle gas plants fared worse, hitting a 15-year cost high of $48-$107/MWh due to turbine bottlenecks and long equipment delivery timelines. Onshore wind held steady at $37-$99/MWh, with capital costs nearly cut in half since 2010. Despite the price hikes, utilities keep proposing new gas infrastructure to meet reliability needs and back up renewables amid surging demand from AI data centers and electrification.
What It Means for Subcontractors
- E&I and civil crews on utility-scale solar builds should expect tighter owner budgets as the 18% cost jump gets absorbed somewhere, likely squeezing contingency and change-order flexibility on 2026-2027 projects; lock in material pricing early given tariff exposure on imported cells, batteries, and inverters.
- Mechanical and pipefitting contractors bidding CCGT work have leverage: turbine supply bottlenecks and 15-year-high costs ($48-$107/MWh) mean owners are paying premiums for schedule certainty, so subs with proven on-time delivery can negotiate better terms.
- Wind construction trades (foundation, erection, electrical balance-of-plant) are positioned well since onshore wind’s $37-$99/MWh range beats gas on cost, a case to make when pursuing new subcontract packages as utilities weigh generation mix decisions.
