What Is LCOE (Levelized Cost of Electricity)?

LCOE spreads every cost a plant will ever incur — construction, financing, fuel, maintenance — across every megawatt-hour it will ever produce, yielding a single per-MWh number that makes technologies comparable. On this measure, utility-scale solar and onshore wind have been the cheapest new-build generation in most of the US for years, which is why they dominate interconnection queues even absent climate policy.

LCOE's limitation is that it prices energy, not timing or reliability: a solar MWh at noon is not worth the same as a dispatchable MWh at 7 p.m. Analysts supplement it with metrics like levelized cost of storage and 'LCOE plus integration costs.' Used carefully, it remains the standard first-order answer to 'what's cheapest to build?'