Financial advisory and asset management firm Lazard recently published its annual report on the costs of electricity generation technologies, finding that the costs for clean energy projects continue to decrease. The tenth version of Lazard’s Levelized Cost of Energy Analysis (LCOE 10.0) shows that the cost of large-scale solar projects continue to rapidly decline, falling by 11% in 2016 and thus 85% since 2009. This makes new solar projects competitive with natural gas power plants in some regions of the U.S., even before federal investment tax credits, and in many regions across the country, wind projects are the lowest cost option among all energy technologies, before federal tax credits. To learn more about Lazard’s report, read on!

Alongside the 11% decrease in the cost of solar photovoltaic (PV) technologies, rooftop residential PV technology is down about 26%. The median cost of electricity generation through offshore wind generation declined approximately 22%, but remains significantly more expensive than onshore wind facilities, especially across the nation. While Lazard’s annual study reflects that some alternative energy technologies continue to be cost-competitive with conventional generation technologies, the yearly cost declines were less robust than they were in previous years. The marginal change in the last year reflects both the maturing of technology and a comparatively low level of investment.

Many leading industry participants are starting to develop utility-scale wind and solar “plus storage” offerings, which would increase capacity factors and meet grid needs that current intermittent generation resources do not serve. However, the Lazard report emphasizes that despite the steady and increasing cost-competiveness of certain alternative technologies, advanced economies need diverse generation methods to provide baseload generation in the foreseeable future. Thus, the optimal solution for many regions should complement existing conventional generation technologies with alternative energy technologies.

While the public narrative in recent months has deemed alternative energy as a threat to conventional technologies, Lazard’s analysis shows that clean energy technologies can both be cost-effective and work in unison with conventional methods. Lazard argues for a coordinated federal and state energy policy in the U.S. grounded in cost analysis, leading to sustainable energy independence, a cleaner environment, and a stronger economic foundation.