(Bloomberg) —
Solar remains the cheapest and fastest source of electricity for US grids, even as artificial intelligence drives an unexpected surge in power demand, according to an analysis by Lazard Inc.
Deploying utility-scale solar costs around $38 to $78 a megawatt-hour, versus $107 for the most efficient type of natural gas plant, said George Bilicic, global head of power, energy and infrastructure at Lazard. What’s more: solar’s lower price tag excludes tax incentives.
Lazard’s findings come as the Trump Administration renews its assault on renewables in a bid to prop up fossil fuels. Washington is vying to gut clean energy tax subsidies, the Energy Department is rolling back funding for renewable projects and US Energy Secretary Chris Wright recently called intermittent power sources “a parasite on the grid!” Yet the administration’s vow to win the AI race has created an urgent need for low-cost electricity supplies.
Lazard’s analysis shows that adding batteries or even back-up gas generation to solar is still cheaper than building gas peaker plants.
“Renewables have a big part to play,” especially as gas prices and construction costs for fossil-fuel plants climb on the back of market volatility and higher exports, Bilicic said in interview. And although renewables are cheaper than gas without subsidies, cutting those tax credits will nevertheless mean consumer power prices will rise, he added.
(Updates with context in the penultimate paragraph. Previous version corrected Lazard executive’s title in second paragraph.)
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