L E V E L I Z E D C O S T O F E N E R G Y +
W I T H S U P P O R T F R O M
J u n e 2 0 2 5
C O N F I D E N T I A L
Table of Contents
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
EXECUTIVE SUMMARY
ENERGY GENERATION
Lazard’s Levelized Cost of Energy Analysis—Version
ENERGY STORAGE
Lazard’s Levelized Cost of Storage Analysis—Version
ENERGY SYSTEM
Cost of Firming Intermittency
APPENDIX
LCOE
LCOS
I
II
III
IV
V
3
5
16
25
31
A
A
A
A
B
6
17
26
32
41
C O N F I D E N T I A L
Copyright 2025 Lazard
Executive SummaryI
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Executive Summary—Selected Key Findings from Lazard’s 2025 LCOE+
Lazard’s 2025 LCOE+ Report is organized around three key areas: Energy Generation, Energy Storage and the Energy System
Energy
Generation
Levelized Cost of Energy Version
• Renewables Remain Competitive: On an unsubsidized $/MWh basis, renewable energy remains the most cost-competitive form of generation. As such, renewable
energy will continue to play a key role in the buildout of new power generation in the . This is particularly true in the current high power demand environment,
where renewables stand out as both the lowest-cost and quickest-to-deploy generation resource
• Increasing Competitiveness of Existing Gas Generation: The gap between the LCOE of new wind and solar and the marginal cost of operating CCGTs has widened
due to, among other things, persistent low gas prices, high energy demand and increasing renewable LCOEs
• Significant Shifts Expected: Unless otherwise indicated, Lazard’s LCOE is an LTM analysis focused on “today” and is not a forecasting tool. As such, the outcomes
included herein are representative of current development and construction timelines, which vary by technology. For example, while this year’s analysis shows only a
slight increase in the LCOE of CCGTs, turbine shortages, rising costs and long lead times are expected to drive steep LCOE increases for gas technologies in the near
term, as illustrated herein. Additionally, cost declines across Vogtle units 3 and 4 indicate nuclear is poised to benefit from scale and development efficiencies
Energy
Storage
Levelized Cost of Storage Version
• Storage Cost Decline: This year’s analysis shows notable declines in the LCOS of utility scale and C&I battery energy storage systems. Key drivers of such results
include both market dynamics (., lower-than-expected EV demand and the resulting oversupply of cells) and technological advancements (., increased cell
capacity and energy density)
• Tariffs Increase Uncertainty: While current pricing is further benefiting from aggressive competition, widening LCOS spreads indicate increased volatility as
uncertainty related to the ultimate tariff regime is shaping market dynamics in real time. For example, supply chain relocation to Southeast Asia and India is well
underway, and market participants are executing on forward procurement strategies to mitigate future pricing risk
• Market Expansion Is Underway: The LCOS value snapshots show increased returns reflecting the confluence of lower costs and higher prices in several regions.
Energy storage adoption is expanding beyond ISO/RTO-driven wholesale markets and into states where municipal procurement and data center growth is prevalent
(., Arizona, Colorado, Florida). Lazard expects continued expansion as backup power and grid resilience become increasingly important in high-growth markets
Energy
System
Cost of Firming Intermittency
• Firming Value Rises as Renewable Penetration Increases: The cost of firming helps grid operators evaluate resources based on a region’s existing generation mix
and load characteristics, ensuring the right balance between reliability and affordability. The results of this year’s firming analysis show that as the penetration of low-
cost intermittent generation increases, the value of firm capacity rises
• ISO Approaches to System Analysis Are Evolving: Several independent system operators are adjusting their capacity accreditation methodologies in ways that are
generally increasing firming costs. Both CAISO and PJM have reduced capacity accreditation values for highly correlated resources (., solar and shorter-duration
storage). Continued development of more sophisticated capacity accreditation frameworks, such as incorporation of seasonal adjustments or diversity benefits,
could have material impacts on future firming costs
• Diverse Generation Sources and Innovation Are Needed: The results of Lazard’s LCOE+ have consistently supported deploying a diverse mix of energy resources.
Despite the sustained unsubsidized cost competitiveness of renewable energy, resource planning metrics indicate diverse generation fleets will be required over the
long term to meet power needs, likely bolstered by now-emerging technologies such as long duration energy storage, geothermal, nuclear small modular reactors,
pumped storage hydropower and carbon capture and storage, among others
I E X E C U T I V E S U M M A R Y
4
C O N F I D E N T I A L
Copyright 2025 Lazard
Energy GenerationII
C O N F I D E N T I A L
Copyright 2025 Lazard
Lazard’s Levelized Cost of Energy
Analysis—Version
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Introduction
Lazard’s Levelized Cost of Energy analysis addresses the following topics:
• Comparative LCOE analysis for various generation technologies on a $/MWh basis, including sensitivities for . federal tax subsidies, fuel prices, carbon
pricing and cost of capital
• Illustration of how the LCOE of onshore wind, utility-scale solar and hybrid projects compare to the marginal cost of selected conventional generation
technologies
• Historical LCOE comparison of various technologies
• Illustration of the historical LCOE declines for onshore wind and utility-scale solar
• Appendix materials, including:
− An overview of the methodology utilized to prepare Lazard’s LCOE analysis
− A summary of the assumptions utilized in Lazard’s LCOE analysis
− Deconstruction of the LCOE for various generation technologies by capital cost, fixed operations and maintenance (“O&M”) expense, variable O&M expense
and fuel cost
Other factors would also have a potentially significant effect on the results contained herein but have not been examined in the scope of this current analysis.
These additional factors, among others, may include: recent tariff-related cost impacts; implementation and interpretation of the full scope of the IRA; economic
policy, transmission queue reform, network upgrades and other transmission matters, congestion, curtailment or other integration-related costs; permitting or
other development costs, unless otherwise noted; and costs of complying with various environmental regulations (., carbon emissions offsets or emissions
control systems). This analysis is intended to represent a snapshot in time and utilizes a wide, but not exhaustive, sample set of Industry data. As such, we
recognize and acknowledge the likelihood of results outside of our ranges. Therefore, this analysis is not a forecasting tool and should not be used as such given
the complexities of our evolving Industry, grid and resource needs. Except as illustratively sensitized herein, this analysis does not consider the intermittent nature
of selected renewables energy technologies or the related grid impacts of incremental renewable energy deployment. This analysis also does not address
potential social and environmental externalities including, for example, the social costs and rate consequences for those who cannot afford distributed
generation solutions as well as the long-term residual and societal consequences of various conventional generation technologies that are difficult to measure
(., airborne pollutants, greenhouse gases, etc.).
Levelized Cost of Storage Cost of Firming IntermittencyLevelized Cost of Energy
Energy Generation Energy Storage Energy System
A L A Z A R D ’ S L E V E L I Z E D C O S T O F E N E R G Y A N A L Y S I S — V E R S I O N 1 8 . 0
7
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
$81
$38
$50
$66
$37
$44
$70
$149
$141
$71
$48
$217
$78
$131
$109
$86
$123
$157
$251
$220
$173
$109
$0 $25 $50 $75 $100 $125 $150 $175 $200 $225 $250 $275
Solar PV—Community & C&I
Solar PV—Utility
Solar PV + Storage—Utility
Geothermal
Wind—Onshore
Wind + Storage—Onshore
Wind—Offshore
Gas Peaking
. Nuclear
Coal
Gas Combined Cycle
Levelized Cost of Energy Comparison—Version
Selected renewable energy generation technologies remain cost-competitive with conventional generation technologies under certain
circumstances
$315
2
2
2
Levelized Cost of Energy ($/MWh)
$345
$735
$1085
$2286
$924
$1696
Source: Lazard estimates and publicly available information.
Note: Here and throughout this analysis, unless otherwise indicated, the analysis assumes 60% debt at an 8% interest rate and 40% equity at a 12% cost. See page titled “Levelized Cost of Energy Comparison—Sensitivity to Cost of Capital” for
cost of capital sensitivities.
1 Reflects the LCOE for a system composed of standalone generation plus standalone storage less the combined system-level synergies (assumed to be 10% of storage capital costs and 25% of inverter costs). The synergies capture
potential cost reductions or efficiency gains from integrating generation and storage, such as shared interconnection infrastructure, improved energy dispatch, enhanced capacity utilization and operational efficiencies.
2 Given the limited public and/or observable data available for new-build geothermal, coal and nuclear projects, the LCOE presented herein reflects Lazard’s LCOE results adjusted for inflation and, for nuclear, are based on then-
estimated costs of the Vogtle Plant. Coal LCOE does not include cost of transportation and storage.
3 The fuel cost assumptions for Lazard’s LCOE analysis of gas-fired generation, coal-fired generation and nuclear generation resources are $ $ and $ respectively, for year-over-year comparison
purposes. See page titled “Levelized Cost of Energy Comparison—Sensitivity to Fuel Prices” for fuel price sensitivities.
4 Represents the illustrative midpoint LCOE for Dominion’s Coastal Virginia Offshore Wind (“CVOW”) project, based on the publicly disclosed capital cost of ~$ billion (excluding onshore transmission costs) and offshore wind estimates
from Lazard. Dominion’s projected LCOE for CVOW as of February 2025 is $91/MWh in 2027 dollars, with an expected COD in 4Q 2026.
5 Reflects the average of the high and low LCOE marginal cost of operating fully depreciated gas peaking, gas combined cycle, coal and nuclear facilities, inclusive of decommissioning costs for nuclear facilities. Analysis assumes that the
salvage value for a decommissioned gas or coal asset is equivalent to its decommissioning and site restoration costs. Inputs are derived from a benchmark of operating gas, coal and nuclear assets across the . Capacity factors, fuel,
variable and fixed operating expenses are based on upper- and lower-quartile estimates derived from Lazard’s research. See page titled “Levelized Cost of Energy Comparison—New Build Renewable Generation vs. Marginal Cost of
Conventional Generation” for additional details.
6 Represents illustrative LCOE values for Vogtle nuclear plant’s units 3 and 4. The analysis is based on publicly available estimates and suggestions from selected industry experts, indicating a cost “learning curve” of ~30% between Vogtle
units 3 and 4. Analysis assumes total operating capacity of ~ GW, total capital cost of ~$ billion, capacity factor of ~97%, operating life of 70 years and other operating parameters estimated by Lazard’s LCOE results, adjusted
for inflation.
7 Illustrative high case reflects elevated capital costs ($2,400/kW – $2,600/kW) based on recently observed market quotes for CCGT projects in early stages of development (post-2028 COD).
$1077
1
1
Renewable
Generation
Conventional
Generation3
Levelized Cost of Storage Cost of Firming IntermittencyLevelized Cost of Energy
Energy Generation Energy Storage Energy System
A L A Z A R D ’ S L E V E L I Z E D C O S T O F E N E R G Y A N A L Y S I S — V E R S I O N 1 8 . 0
8
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Levelized Cost of Energy Comparison—Sensitivity to . Federal Tax Subsidies
The Investment Tax Credit (“ITC”), Production Tax Credit (“PTC”) and Energy Community adder, among other provisions in the IRA, are
important components of the LCOE for renewable energy technologies
Source: Lazard estimates and publicly available information.
Note: Unless otherwise indicated, this analysis does not include other state or federal subsidies (., domestic content adder, etc.). The IRA is a comprehensive and evolving piece of legislation that is still being implemented and remains subject
to interpretation—important elements of the IRA are not included in our analysis and could impact outcomes. Lazard’s LCOE analysis assumes, for year-over-year reference purposes, 60% debt at an 8% interest rate and 40% equity at a
12% cost (together implying an after-tax IRR/WACC of %).
1 This sensitivity analysis assumes that projects qualify for the full ITC/PTC, have a capital structure that includes sponsor equity, debt and tax equity and assumes the equity owner has taxable income to monetize the tax credits and also
includes an Energy Community adder of 10% for ITC projects and $3/MWh for PTC projects.
2 This sensitivity analysis assumes that projects qualify for the full ITC/PTC, have a capital structure that includes sponsor equity, debt and tax equity and assumes the equity owner has taxable income to monetize the tax credits.
Renewable
Generation
$81
$51
$38
$24
$20
$50
$33
$66
$44
$37
$15
$44
$21
$70
$52
$217
$178
$78
$57
$45
$131
$111
$109
$93
$86
$75
$123
$103
$157
$141
$0 $25 $50 $75 $100 $125 $150 $175 $200 $225 $250 $275 $300
Solar PV—Community & C&I
Solar PV—Community & C&I (ITC)
Solar PV—Utility
Solar PV—Utility (ITC)
Solar PV—Utility (PTC)
Solar PV + Storage—Utility
Solar PV + Storage—Utility (ITC)
Geothermal
Geothermal (ITC)
Wind—Onshore
Wind—Onshore (PTC)
Wind + Storage—Onshore
Wind + Storage—Onshore (ITC)
Wind—Offshore
Wind—Offshore (PTC)
LCOE Subsidized (incl. Energy Community) Subsidized (excl. Energy Community)1
Levelized Cost of Energy ($/MWh)
2
Levelized Cost of Storage Cost of Firming IntermittencyLevelized Cost of Energy
Energy Generation Energy Storage Energy System
A L A Z A R D ’ S L E V E L I Z E D C O S T O F E N E R G Y A N A L Y S I S — V E R S I O N 1 8 . 0
9
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Renewable
Generation
Conventional
Generation
$81
$38
$50
$66
$37
$44
$70
$138
$138
$67
$41
$217
$78
$131
$109
$86
$123
$157
$262
$222
$179
$116
$0 $25 $50 $75 $100 $125 $150 $175 $200 $225 $250 $275
Solar PV—Community & C&I
Solar PV—Utility
Solar PV + Storage—Utility
Geothermal
Wind—Onshore
Wind + Storage—Onshore
Wind—Offshore
Gas Peaking
. Nuclear
Coal
Gas Combined Cycle
LCOE +/- 25% Fuel Price Adjustment
Levelized Cost of Energy Comparison—Sensitivity to Fuel Prices
Variations in fuel prices can materially impact the LCOE of conventional generation technologies
Source: Lazard estimates and publicly available information.
Note: Unless otherwise noted, the assumptions used in this sensitivity correspond to those used in the LCOE analysis as presented on the page titled “Levelized Cost of Energy Comparison—Version ”.
1 Assumes a fuel cost range for gas-fired generation resources of $ – $ (representing a sensitivity range of ± 25% of the $ used in the LCOE).
2 Assumes a fuel cost range for nuclear generation resources of $ – $ (representing a sensitivity range of ± 25% of the $ used in the LCOE).
3 Assumes a fuel cost range for coal-fired generation resources of $ – $ (representing a sensitivity range of ± 25% of the $ used in the LCOE).
1
2
3
Levelized Cost of Energy ($/MWh)
1
Levelized Cost of Storage Cost of Firming IntermittencyLevelized Cost of Energy
Energy Generation Energy Storage Energy System
A L A Z A R D ’ S L E V E L I Z E D C O S T O F E N E R G Y A N A L Y S I S — V E R S I O N 1 8 . 0
10
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Renewable
Generation
Conventional
Generation
Levelized Cost of Energy Comparison—Sensitivity to Carbon Pricing
Carbon pricing is one avenue for policymakers to address carbon emissions; a carbon price range of $40 – $60/Ton1 of carbon would
increase the LCOE for certain conventional generation technologies, as indicated below
Source: Lazard estimates and publicly available information.
Note: Unless otherwise noted, the assumptions used in this sensitivity correspond to those used in the LCOE analysis as presented on the page titled “Levelized Cost of Energy Comparison—Version ”. LCOE with Carbon Pricing is limited to
carbon emissions directly related to generation and does not include the impacts of carbon pricing on embodied carbon.
1 The current administration no longer maintains an estimate of the monetized impacts of greenhouse gas emissions. Previous administrations estimated the social cost of carbon to range from $5/Ton (first Trump Administration) to over
$200/Ton (Biden Administration).
2 The low and high ranges reflect the LCOE of selected conventional generation technologies including an illustrative carbon price of $40/Ton and $60/Ton, respectively.
$81
$38
$50
$66
$37
$44
$70
$149
$173
$141
$71
$108
$48
$63
$217
$78
$131
$109
$86
$123
$157
$251
$291
$220
$173
$249
$109
$132
$0 $25 $50 $75 $100 $125 $150 $175 $200 $225 $250 $275 $300
Solar PV—Community & C&I
Solar PV—Utility
Solar PV + Storage—Utility
Geothermal
Wind—Onshore
Wind + Storage—Onshore
Wind—Offshore
Gas Peaking
Gas Peaking w/ Carbon Pricing
. Nuclear
Coal
Coal w/ Carbon Pricing
Gas Combined Cycle
Gas Combined Cycle w/ Carbon Pricing
Levelized Cost of Energy ($/MWh)
LCOE LCOE with Carbon Pricing
2
2
2
Levelized Cost of Storage Cost of Firming IntermittencyLevelized Cost of Energy
Energy Generation Energy Storage Energy System
A L A Z A R D ’ S L E V E L I Z E D C O S T O F E N E R G Y A N A L Y S I S — V E R S I O N 1 8 . 0
11
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Levelized Cost of Energy Comparison—Sensitivity to Cost of Capital1
A key consideration in determining the LCOE for utility-scale generation technologies is the cost, and availability, of capital1. In practice,
this dynamic is particularly significant because the cost of capital for each asset is related to its specific operational characteristics and
the resulting risk/return profile
Average LCOE2
Source: Lazard estimates and publicly available information.
Note: Analysis assumes 60% debt and 40% equity. Unless otherwise noted, the assumptions used in this sensitivity correspond to those used on the page titled “Levelized Cost of Energy Comparison—Version ”.
1 Cost of capital as used herein indicates the cost of capital applicable to the asset/plant and not the cost of capital of a particular investor/owner.
2 Reflects the average of the high and low LCOE for each respective cost of capital assumption.
3 Given the limited public and/or observable data available for new-build nuclear projects, the LCOE presented herein reflects Lazard’s LCOE results adjusted for inflation and are based on then-estimated costs of the Vogtle Plant.
After-Tax IRR/WACC % % % % % %
Cost of Equity % % % % % %
Cost of Debt % % % % % %
$69
$75
$81
$88
$95
$104
$43 $48
$53 $58
$64
$71
$48 $52
$56
$61
$67 $73
$88
$97
$109
$122
$137
$153
$65 $69
$73
$78
$84
$89
$153
$167
$183
$200
$218
$238
$115
$131
$154
$180
$210
$242
$89
$96
$104
$113
$123
$135
25
50
75
100
125
150
175
200
225
$250
LCOE
($/MWh)
Gas Peaking
Geothermal
Coal
Gas Combined
Cycle
Solar PV—
Utility
Wind—Onshore
LCOE
. Nuclear3
Wind—Offshore
Levelized Cost of Storage Cost of Firming IntermittencyLevelized Cost of Energy
Energy Generation Energy Storage Energy System
A L A Z A R D ’ S L E V E L I Z E D C O S T O F E N E R G Y A N A L Y S I S — V E R S I O N 1 8 . 0
12
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Levelized Cost of Energy Comparison—New Build Renewable Generation vs. Marginal
Cost of Conventional Generation
Certain renewable energy generation technologies have an LCOE that is competitive with the marginal cost of selected conventional
generation technologies—notably, as incremental, intermittent renewable energy capacity is deployed and baseload gas-fired generation
utilization rates increase, this gap closes, particularly in low gas pricing and high energy demand environments
Source: Lazard estimates and publicly available information.
Note: Unless otherwise noted, the assumptions used in this sensitivity correspond to those used on page titled “Levelized Cost of Energy Comparison—Version ”.
1 See page titled “Levelized Cost of Energy Comparison—Sensitivity to . Federal Tax Subsidies” for additional details.
2 Reflects the marginal cost of operating fully depreciated gas, coal and nuclear facilities, inclusive of decommissioning costs for nuclear facilities. Analysis assumes that the salvage value for a decommissioned gas or coal asset is
equivalent to its decommissioning and site restoration costs. Inputs are derived from a benchmark of operating gas, coal and nuclear assets across the . Capacity factors, fuel, variable and fixed O&M are based on upper- and lower-
quartile estimates derived from Lazard’s research.
Subsidized (incl. Energy Community)LCOE Subsidized (excl. Energy Community)
$38
$24
$20
$50
$33
$37
$15
$44
$21
$47
$30
$31
$24
$78
$57
$45
$131
$111
$86
$75
$123
$103
$170
$38
$114
$39
$0 $25 $50 $75 $100 $125 $150 $175 $200
Solar PV—Utility
Solar PV—Utility (ITC)
Solar PV—Utility (PTC)
Solar PV + Storage—Utility
Solar PV + Storage—Utility (ITC)
Wind—Onshore
Wind—Onshore (PTC)
Wind + Storage—Onshore
Wind + Storage—Onshore (ITC)
Gas Peaking
. Nuclear
Coal
Gas Combined Cycle
Levelized Cost of Energy ($/MWh)
1
1
1
1
1
Marginal Cost2
Levelized Cost of
New Build
Renewable
Generation
Marginal Cost of
Conventional
Generation2
Levelized Cost of Storage Cost of Firming IntermittencyLevelized Cost of Energy
Energy Generation Energy Storage Energy System
A L A Z A R D ’ S L E V E L I Z E D C O S T O F E N E R G Y A N A L Y S I S — V E R S I O N 1 8 . 0
13
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Levelized Cost of Energy Comparison—Historical LCOE Comparison
Lazard’s LCOE analysis indicates significant historical cost declines for utility-scale renewable energy generation technologies, which has
begun to level out and even slightly increase in recent years
Source: Lazard estimates and publicly available information.
1 Reflects the average of the high and low LCOE for each respective technology in each respective year. Percentages represent the total change in the average LCOE since Lazard’s LCOE and LCOE , respectively.
2 Given the limited public and/or observable data available for new-build nuclear projects, the LCOE presented herein reflects Lazard’s LCOE results adjusted for inflation and are based on then-estimated costs of the Vogtle Plant.
Selected Historical Average LCOE Values1
Solar PV—
Utility
(84%)
$359
$248
$157
$125
$98 $79
$64 $55 $50 $43
$40 $37 $36
$60 $61 $58
$111
$111 $111
$102 $105
$109
$108 $102 $102 $102
$109 $112 $108
$117 $118
$122
$83
$82
$83 $75 $74
$74 $65 $63 $60 $58 $56 $59 $60
$70 $76 $78
$135
$124
$71 $72 $70
$59 $55
$47 $45 $42
$41 $40 $38 $50 $50
$61
$123
$96 $95 $96
$104
$112
$117 $117
$148 $151
$155
$163 $167
$180 $182
$180
$76
$107 $104
$116 $116 $116
$100 $98 $97 $91 $91 $80 $75
$82 $85 $88
$275
$243 $227
$216
$205 $205
$192 $191
$183 $179 $175 $175 $173
$168 $169
$200
20
80
140
200
260
320
$380
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2023 2024 2025
LCOE
($/MWh)
Gas Combined
Cycle
(5%)
Wind—
Onshore
(55%)
. Nuclear2
47%
Coal
10%
Gas Peaking
(27%)
Geothermal
16%
//
LCOE
Version
Since
Solar PV—
Utility
(4%)
Gas Combined
Cycle
3%
Wind—
Onshore
23%
. Nuclear2
(1%)
Coal
3%
Gas Peaking
18%
Geothermal
3%
Since
Levelized Cost of Storage Cost of Firming IntermittencyLevelized Cost of Energy
Energy Generation Energy Storage Energy System
A L A Z A R D ’ S L E V E L I Z E D C O S T O F E N E R G Y A N A L Y S I S — V E R S I O N 1 8 . 0
14
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Levelized Cost of Energy Comparison—Historical Renewable Energy LCOE
This year’s analysis shows a divergence in trends between wind and solar with solar costs declining slightly and wind costs increasing,
likely reflecting the difference in supply chain conditions across each technology
Source: Lazard estimates and publicly available information.
1 Reflects the average percentage increase/(decrease) of the high end and low end of the LCOE range.
2 Reflects the average compounded annual growth rate of the high end and low end of the LCOE range.
Wind—Onshore Solar PV—Utility
Solar PV—Utility LCOE Range Solar PV—Utility LCOE AverageWind—Onshore LCOE Range Wind—Onshore LCOE Average
$101 $99
$50 $48 $45
$37 $32 $32 $30 $29 $28 $26 $26 $24 $27
$37
$169
$148
$92 $95 $95
$81 $77
$62 $60 $56 $54 $54 $50
$75 $73
$86
0
50
100
150
200
$250
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2023 2024 2025
LCOE
($/MWh)
Wind—Onshore 2009 – 2025 Percentage Decrease/CAGR: (56%)1/(5%)2
Wind—Onshore 2020 – 2025 Increase/CAGR: 49%1/8%2
//
$323
$226
$148
$101
$91
$72
$58 $49 $46 $40 $36 $31 $30 $24 $29
$38
$394
$270
$166
$149
$104
$86
$70 $61 $53 $46 $44 $42 $41
$96 $92
$78
0
75
150
225
300
375
$450
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2023 2024 2025
LCOE
($/MWh)
Solar PV—Utility 2009 – 2025 Percentage Decrease/CAGR: (84%)1/(11%)2
Solar PV—Utility 2020 – 2025 Percentage Increase/CAGR: 54%1/9%2
//
LCOE
Version
Version
Levelized Cost of Storage Cost of Firming IntermittencyLevelized Cost of Energy
Energy Generation Energy Storage Energy System
A L A Z A R D ’ S L E V E L I Z E D C O S T O F E N E R G Y A N A L Y S I S — V E R S I O N 1 8 . 0
15
C O N F I D E N T I A L
Copyright 2025 Lazard
Energy StorageIII
C O N F I D E N T I A L
Copyright 2025 Lazard
Lazard’s Levelized Cost of Storage
Analysis—Version
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Introduction
Lazard’s Levelized Cost of Storage analysis addresses the following topics:
• LCOS Analysis:
− Comparative LCOS analysis for various energy storage systems on a $/MWh basis
− Comparative LCOS analysis for various energy storage systems on a $/kW-year basis
• Storage Value Snapshot Case Studies:
− Overview of potential revenue applications for various energy storage systems
− Overview of the Storage Value Snapshot Case Studies analysis and identification of selected geographies for each use case analyzed
− Results from the Storage Value Snapshot Case Studies analysis
• Appendix Materials, including:
− An overview of the use cases and operational parameters of selected energy storage systems for each use case analyzed
− An overview of the methodology utilized to prepare Lazard’s LCOS analysis
− A summary of the assumptions utilized in Lazard’s LCOS analysis
− Deconstruction of the LCOS for various generation technologies by capital cost, fixed operations and maintenance (“O&M”) expense and charging cost
Other factors would also have a potentially significant effect on the results contained herein but have not been examined in the scope of this current analysis.
These additional factors, among others, may include: recent tariff-related cost impacts; implementation and interpretation of the full scope of the IRA;
economic policy, transmission queue reform, network upgrades and other transmission matters; congestion, curtailment or other integration-related costs;
permitting or other development costs, unless otherwise noted; and costs of complying with various regulations (., federal import tariffs or labor
requirements). This analysis also does not address potential social and environmental externalities as well as the long-term residual and societal
consequences of various energy storage system technologies that are difficult to measure (., resource extraction, end-of-life disposal, lithium-ion-related
safety hazards, etc.). This analysis is intended to represent a snapshot in time and utilizes a wide, but not exhaustive, sample set of Industry data. As such, we
recognize and acknowledge the likelihood of results outside of our ranges. Therefore, this analysis is not a forecasting tool and should not be used as such given
the complexities of our evolving Industry, grid and resource needs.
Levelized Cost of Storage Cost of Firming IntermittencyLevelized Cost of Energy
Energy Generation Energy Storage Energy System
A L A Z A R D ’ S L E V E L I Z E D C O S T O F S T O R A G E A N A L Y S I S — V E R S I O N 1 0 . 0
18
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Levelized Cost of Storage Comparison—Version ($/MWh)
Lazard’s LCOS analysis evaluates standalone energy storage systems on a levelized basis to derive cost metrics across energy storage
use cases and configurations1
Source: Lazard estimates and publicly available information.
Note: Here and throughout this section, unless otherwise indicated, the analysis assumes 20% debt at an 8% interest rate and 80% equity at a 12% cost, which is a different capital structure than Lazard’s LCOE analysis. Capital costs include
the storage module, balance of system and power conversion equipment, collectively referred to as the energy storage system, equipment (where applicable) and EPC costs. Augmentation costs are not included in capital costs in this
analysis and vary across use cases due to usage profiles and lifespans. Charging costs are assessed at the weighted average hourly pricing (wholesale energy prices) across an optimized annual charging profile of the asset. See Appendix B
for charging cost assumptions and additional details. The projects are assumed to use a 5-year MACRS depreciation schedule.
1 See Appendix B for a detailed overview of the use cases and operational parameters analyzed in the LCOS.
2 This sensitivity analysis assumes that projects qualify for the full ITC and have a capital structure that includes sponsor equity, debt and tax equity and also includes a 10% Energy Community adder.
3 This sensitivity analysis assumes that projects qualify for the full ITC and have a capital structure that includes sponsor equity, debt and tax equity.
In-Front-of-the-
Meter Storage
Behind-the-Meter
Storage
$129
$95
$115
$83
$319
$249
$547
$385
$277
$209
$254
$192
$506
$396
$860
$632
$0 $250 $500 $750 $1,000
Utility-Scale Standalone
(100 MW, 2-Hour)
Utility-Scale Standalone
(100 MW, 2-Hour) (ITC)
Utility-Scale Standalone
(100 MW, 4-Hour)
Utility-Scale Standalone
(100 MW, 4-Hour) (ITC)
C&I Standalone
(1 MW, 2-Hour)
C&I Standalone
(1 MW, 2-Hour) (ITC)
Residential Standalone
( MW, 4-Hour)
Residential Standalone
( MW, 4-Hour) (ITC)
Levelized Cost of Storage ($/MWh)
LCOS Subsidized (incl. Energy Community) Subsidized (excl. Energy Community) 32
Levelized Cost of Storage Cost of Firming IntermittencyLevelized Cost of Energy
Energy Generation Energy Storage Energy System
A L A Z A R D ’ S L E V E L I Z E D C O S T O F S T O R A G E A N A L Y S I S — V E R S I O N 1 0 . 0
19
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
In-Front-of-the-
Meter Storage
Behind-the-Meter
Storage
Levelized Cost of Storage Comparison—Version ($/kW-year)
Lazard’s LCOS analysis evaluates standalone energy storage systems on a levelized basis to derive cost metrics across energy storage
use cases and configurations1
Source: Lazard estimates and publicly available information.
1 See Appendix B for a detailed overview of the use cases and operation parameters analyzed in the LCOS.
2 This sensitivity analysis assumes that projects qualify for the full ITC and have a capital structure that includes sponsor equity, debt and tax equity and also includes a 10% Energy Community adder.
3 This sensitivity analysis assumes that projects qualify for the full ITC and have a capital structure that includes sponsor equity, debt and tax equity.
$81
$60
$145
$105
$201
$157
$719
$505
$132
$241
$250
$830
$174
$319
$319
$1,129
$0 $200 $400 $600 $800 $1,000 $1,200
Utility-Scale Standalone
(100 MW, 2-Hour)
Utility-Scale Standalone
(100 MW, 2-Hour) (ITC)
Utility-Scale Standalone
(100 MW, 4-Hour)
Utility-Scale Standalone
(100 MW, 4-Hour) (ITC)
C&I Standalone
(1 MW, 2-Hour)
C&I Standalone
(1 MW, 2-Hour) (ITC)
Residential Standalone
( MW, 4-Hour)
Residential Standalone
( MW, 4-Hour) (ITC)
Levelized Cost of Storage ($/kW-year)
LCOS Subsidized (incl. Energy Community) Subsidized (excl. Energy Community) 32
Levelized Cost of Storage Cost of Firming IntermittencyLevelized Cost of Energy
Energy Generation Energy Storage Energy System
A L A Z A R D ’ S L E V E L I Z E D C O S T O F S T O R A G E A N A L Y S I S — V E R S I O N 1 0 . 0
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Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
$432 $442
$407
$373
$319
$590
$643
$448
$518 $506
0
100
200
300
400
500
600
700
$800
2020 2021 2023 2024 2025
LCOS
($/MWh)
Levelized Cost of Storage Comparison—Historical LCOS Comparison
This year’s analysis shows notable declines in the LCOS of utility scale and C&I battery energy storage systems. Key drivers include both
market dynamics—slower-than-expected EV demand and the resulting oversupply of cells—and technological advancements, including
increased cell capacity and energy density
Source: Lazard estimates and publicly available information.
Note: The methodology for the Levelized Cost of Storage has evolved between and given technological advances and data availability. Page presents the most comparable Utility-Scale and C&I Standalone storage technologies
included in the Levelized Cost of Storage report for that year.
1 Reflects the average percentage increase/(decrease) of the high end and low end of the LCOS range.
2 Reflects the average compounded annual growth rate of the high end and low end of the LCOS range.
Utility-Scale Standalone (100 MW, 4-Hour) C&I Standalone (1 MW, 2-Hour)
$132 $131
$200
$170
$115
$245
$232
$257
$296
$254
0
100
200
300
$400
2020 2021 2023 2024 2025
LCOS
($/MWh)
Utility-Scale Standalone (100 MW, 4-Hour) 2020 – 2025 Decrease/CAGR: (5%)1/(1%)2
//
C&I Standalone (1 MW, 2-Hour) 2020 – 2025 Percentage Decrease/CAGR: (20%)1/(4%)2
//
LCOS
Version
C&I Standalone
(1 MW, 2-Hour)
LCOS Range
C&I Standalone
(1 MW, 2-Hour)
LCOS Average
Levelized Cost of Storage Cost of Firming IntermittencyLevelized Cost of Energy
Energy Generation Energy Storage Energy System
LCOS
Version
A L A Z A R D ’ S L E V E L I Z E D C O S T O F S T O R A G E A N A L Y S I S — V E R S I O N 1 0 . 0
21
Utility-Scale Standalone
(100 MW, 4-Hour)
LCOS Range
Utility-Scale Standalone
(100 MW, 4-Hour)
LCOS Average
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Storage Value Snapshot Case Studies—Revenue Potential for Selected Use Cases
The numerous potential sources of revenue available to energy storage systems reflect the benefits provided to customers and the grid
• The scope of revenue sources is limited to those captured by existing or soon-to-be commissioned projects—revenue sources that are not clearly identifiable
or without publicly available data have not been analyzed
Source: Lazard estimates and publicly available information.
1 Represents the universe of potential revenue streams available to the various use cases. Does not represent the use cases analyzed in the Storage Value Snapshot Case Studies.
Use Cases1
Description
Utility-Scale
Standalone
Utility-Scale
PV + Storage
Utility-Scale
Wind + Storage
Commercial &
Industrial
Standalone
Commercial &
Industrial
PV + Storage
W
ho
le
sa
le
Demand
Response—
Wholesale
• Manages high wholesale price or emergency conditions on the grid by
calling on users to reduce or shift electricity demand
Energy
Arbitrage
• Storage of inexpensive electricity to sell later at higher prices (only
evaluated in the context of a wholesale market)
Frequency
Regulation
• Provides immediate (4-second) power to maintain generation-load balance
and prevent frequency fluctuations
Resource Adequacy • Provides capacity to meet generation requirements at peak load
Spinning/Non-
Spinning Reserves
• Maintains electricity output during unexpected contingency events (.,
outages) immediately (spinning reserve) or within a short period of time
(non-spinning reserve)
U
til
ity Demand
Response—Utility
• Manages high wholesale price or emergency conditions on the grid by
calling on users to reduce or shift electricity demand
C
us
to
m
er
Bill
Management
• Allows reduction of demand charge using battery discharge and the daily
storage of electricity for use when time of use rates are highest
Incentives
• Payments provided to residential and commercial customers to encourage the
acquisition and installation of energy storage systems
Levelized Cost of Storage Cost of Firming IntermittencyLevelized Cost of Energy
Energy Generation Energy Storage Energy System
A L A Z A R D ’ S L E V E L I Z E D C O S T O F S T O R A G E A N A L Y S I S — V E R S I O N 1 0 . 0
22
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Storage Value Snapshot Case Studies—Overview
Lazard’s Storage Value Snapshots analyze the financial viability of illustrative energy storage systems designed for selected use cases and
geographies
Source: Lazard estimates and publicly available information.
Note: Actual project returns may vary due to differences in location-specific costs, revenue streams and owner/developer risk preferences.
1 Refers to the California Independent System Operator.
2 Refers to the Electricity Reliability Council of Texas.
3 Refers to the Pacific Gas & Electric Company.
Location Description
Storage
(MW)
Generation
(MW)
Storage
Duration
(hours) Revenue Streams
In
-F
ro
nt
-o
f-
th
e-
M
et
er
S
to
ra
ge Utility-Scale
Standalone
CAISO1
(SP-15)
Large-scale energy storage system 100 – 4
• Energy Arbitrage
• Frequency Regulation
• Resource Adequacy
• Spinning/Non-Spinning Reserves
Utility-Scale
PV + Storage
ERCOT2
(South Texas)
Energy storage system designed to be paired
with large solar PV facilities
50 100 4
Utility-Scale
Wind + Storage
ERCOT2
(South Texas)
Energy storage system designed to be paired
with large wind generation facilities
50 100 4
B
eh
in
d-
th
e-
M
et
er
S
to
ra
ge
Commercial &
Industrial
Standalone
PG&E3
(California)
Energy storage system designed for behind-
the-meter peak shaving and demand charge
reduction for C&I energy users
1 – 2
• Demand Response—Utility
• Bill Management
• Incentives
• Tariff Settlement, Demand
Response Participation, Avoided
Costs to Commercial Customer
and Local Capacity Resource
Programs
Commercial &
Industrial
PV + Storage
PG&E3
(California)
Energy storage system designed for behind-
the-meter peak shaving and demand charge
reduction services for C&I energy users
1 4
1
2
3
4
5
Levelized Cost of Storage Cost of Firming IntermittencyLevelized Cost of Energy
Energy Generation Energy Storage Energy System
A L A Z A R D ’ S L E V E L I Z E D C O S T O F S T O R A G E A N A L Y S I S — V E R S I O N 1 0 . 0
23
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
C&I
Standalone
(PG&E)
C&I
PV + Storage
(PG&E)
0
50
100
150
200
250
300
350
400
450
$500
Demand Response—Utility Bill Management Local Incentive Payments
Utility-Scale
Standalone
(CAISO)
Utility-Scale
PV + Storage
(ERCOT)
Utility-Scale
Wind + Storage
(ERCOT)
0
50
100
150
200
250
300
350
400
450
$500
Energy Arbitrage Frequency Regulation Spinning/Non-Spinning Reserves Capacity/Resource Adequacy
Project economics evaluated in the Storage Value Snapshot Case Studies continue to evolve year-over-year as costs change and the
value of revenue streams adjust to reflect underlying market conditions, utility rate structures and policy developments. Notably, this year
capacity/resource adequacy payments nearly doubled which, combined with LCOS declines, significantly increased project returns
Storage Value Snapshot Case Studies—Results
Source: Lazard estimates and publicly available information.
Note: Levelized costs presented for each Value Snapshot reflect local market and operating conditions (including installed costs, market prices, charging costs and incentives) and are different in certain cases from the LCOS results for the
equivalent use case on the page titled “Levelized Cost of Storage Comparison—Version ($/MWh)”, which are more broadly representative of . storage market conditions as opposed to location-specific conditions. Levelized
revenues in all cases are gross revenues (not including charging costs). Subsidized levelized cost for each Value Snapshot reflects: (1) average cost structure for storage, solar and wind capital costs, (2) charging costs based on local
wholesale prices or utility tariff rates and (3) all applicable state and federal tax incentives, including 30% federal ITC for solar and/or storage and $ federal PTC for wind. Value Snapshots do not include cash payments from state
or utility incentive programs. Revenues for Value Snapshots (1) – (3) are based on hourly wholesale prices from the 365 days prior to December 31, 2024. Revenues for Value Snapshots (4) – (5) are based on the most recent tariffs, programs
and incentives available as of February 1, 2025.
1 In previous versions of this analysis, Energy Arbitrage was referred to as Wholesale Energy Sales.
%%%
$/MWh
1 2 3
In-Front-of-the-Meter Storage Behind-the-Meter Storage
1
Subsidized IRR
% %
$/MWh
Subsidized IRR
54
Levelized Cost of Storage Cost of Firming IntermittencyLevelized Cost of Energy
Energy Generation Energy Storage Energy System
A L A Z A R D ’ S L E V E L I Z E D C O S T O F S T O R A G E A N A L Y S I S — V E R S I O N 1 0 . 0
24
C O N F I D E N T I A L
Copyright 2025 Lazard
Energy SystemIV
C O N F I D E N T I A L
Copyright 2025 Lazard
Cost of Firming IntermittencyA
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Market Overview—Current Generation Mix
Source: Publicly available information.
Note: Numbers may not sum due to rounding.
ERCOT
CAISO
Southeast
NYISOMISONorthwest
2024 Generation Mix by Region
PJM
ISO-NE
The current generation mix across the . varies significantly by market—resource availability, operational constraints, load profiles,
transmission infrastructure, seasonal weather patterns and regulatory constructs, among other factors, are key drivers of such variation
Natural
Gas, 45%
Solar, 23%
Hydro, 12%
Wind, 10%
Nuclear, 10%
Southwest
SPP
Hydro, 30%
Natural
Gas, 24%Coal, 19%
Wind, 16%
Solar, 6%
Nuclear, 3%
Other (incl. Petroleum), 3%
Natural
Gas, 39%
Coal, 26%
Wind, 15%
Nuclear, 14%
Solar, 2%
Hydro, 2%
Other (incl. Petroleum), 0%
Natural
Gas, 52%
Hydro,
21%
Nuclear, 20%
Wind, 5%
Other (incl. Petroleum), 3%
Natural
Gas, 57%Nuclear,
25%
Hydro, 7%
Other (incl. Petroleum), 5%
Wind, 3% Solar, 1%
Coal, <1%
Natural
Gas, 44%
Nuclear,
32%
Coal, 14%
Wind, 4%
Other (incl. Petroleum), 2%
Hydro, 2%
Solar, 2%
Natural
Gas, 50%
Nuclear,
25%
Coal, 16%
Solar, 4%
Hydro, 3% Other (incl. Petroleum), 1%
Natural
Gas, 44%
Wind,
24%
Coal, 13%
Solar, 10%
Nuclear, 8%
Other (incl. Petroleum), <1%
Hydro, <1%
Wind, 38%
Natural Gas, 29%
Coal, 25%
Nuclear, 5%
Hydro, 3%Solar, <1%
Other (incl. Petroleum), <1%
Natural
Gas, 43%
Nuclear, 24%
Coal, 13%
Solar, 9%
Wind, 8%
Hydro, 3%
Other (incl. Petroleum), <1%
Levelized Cost of Storage Cost of Firming IntermittencyLevelized Cost of Energy
Energy Generation Energy Storage Energy System
A C O S T O F F I R M I N G I N T E R M I T T E N C Y
27
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
BA-Specified
“Firming” Source ELCC Values2
Net CONE1
($/kW-month) Selected Market Commentary
MISO
Natural Gas
Peaker
Solar: 39%
Wind: 26%
$
• In March 2024, MISO adopted the FERC Reliability Availability and Need (“RAN”) seasonal capacity
construct for wind and solar resources
• Seasonal wind accredited capacity values are % for summer, % for fall, % for winter and
% for spring
• Solar capacity values are 50% for all seasons except winter, which is 5%
CAISO
4-Hour Lithium-
Ion Battery
Solar: 7%
PV + Storage3: 41%
Wind: 12%
$
• Increasing levels of solar penetration in CAISO have shifted peak demand later in the day, reducing the
ELCC value for solar
• CAISO significantly reduced ELCC values for 4-hour battery storage systems, driven by significant growth
in 4-hour storage capacity
SPP
Natural Gas
Peaker
Solar: 51%
Wind: 20%
$
• SPP published seasonal accreditation values based on 2024, assigning separate values to resources for
summer and winter seasons
• Summer wind and solar contributions are % and %, respectively, whereas winter values shift to
% for wind and % for solar
PJM
Natural Gas
Peaker
Solar: 12%
PV + Storage3: 33%
Wind: 38%
$
• PJM adopted a new, marginal ELCC methodology to begin in the 2025/2026 delivery year that reduces the
reliability value of highly correlated resources, such as solar and short-duration storage4
• The update is expected to better capture expected resource performance during system peak
ERCOT
Natural Gas
Peaker
Solar: 38%
Wind: 25%
$
• ERCOT maintains notably high ELCC values despite having the highest renewable penetration by
capacity of the . regulatory markets
• ERCOT updates its capacity scheme every three years; the most recent publication was December 2022
Many grid operators and utilities use effective load-carrying capability (“ELCC”) to measure the reliability of new power generation
resources to contribute to the electricity grid at key periods of demand, particularly intermittent ones like wind and solar. Combined with
the net cost of new entry (“Net CONE”)1, as determined by the grid operator, ELCC helps to guide decisions on resource planning,
capacity adequacy and system reliability. Balancing authorities (“BA”s) such as MISO, CAISO, SPP, PJM and ERCOT have adopted ELCC
accreditation frameworks to ensure a reliable and efficient grid
• ELCC measures the performance of a resource at times of greatest “capacity need” for the system, where capacity need is a function of electricity demand
patterns and the generation mix in each region—in general, the higher the renewable resource penetration, the lower the ELCC accreditation for each
additional renewable resource
Source: Publicly available information.
1 Net “CONE” is defined as capital and operating costs less expected market revenues for a new, firm resource (., gas peaker or battery storage). Net CONE is established by the respective balancing authority.
2 ELCC values are calculated by the respective balancing authority. ELCC is an indicator of the incremental reliability contribution of a given resource to the electricity grid based on its contribution to meeting peak electricity demand. For
example, a 1 MW wind resource with a 15% ELCC provides MW of capacity contribution and would need to be supplemented by MW of additional firm capacity to represent the addition of 1 MW of firm system capacity. Where
seasonal accreditation values exist, values have been annualized.
3 For PV + Storage cases, the effective ELCC value is represented. CAISO and PJM assess ELCC values separately for the PV and storage components of a system. Storage ELCC value is provided only for the capacity that can be charged
directly by the accompanying resource up to the energy required for a 4-hour discharge during peak load. Any capacity available in excess of the 4-hour maximum discharge is attributed to the system at the solar ELCC. ELCC values for
storage range from 55% to 75% for PJM and CAISO, respectively.
4 This year’s analysis does not reflect this future methodology.
Levelized Cost of Storage Cost of Firming IntermittencyLevelized Cost of Energy
Energy Generation Energy Storage Energy System
A C O S T O F F I R M I N G I N T E R M I T T E N C Y
Market Overview—Current Firming Cost Frameworks
28
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Lazard’s Cost of Firming Intermittency analysis builds on the LCOE results by evaluating system-level costs associated with
supplementing intermittent renewable energy on the grid with firm capacity to ensure reliable electricity delivery during peak demand
periods. The analysis utilizes ELCC and Net CONE values assessed and published by grid operators for each regional market to determine
these costs
• The firm capacity value of a new resource is calculated as Nameplate Capacity × ELCC %, where:
− Nameplate Capacity of a resource refers to its maximum potential energy output, and
− ELCC measures the performance of a resource at times of greatest “capacity need” for the system, where capacity need is a function of
electricity demand patterns and the generation mix in each region
• Over time, increased renewable penetration or changes in demand patterns can shift the timing of the capacity need, impacting ELCC
• The remaining non-firm capacity (Nameplate Capacity × (1 – (ELCC %))) is “firmed” at the Net CONE, a $/kW-month figure which is intended to
reflect capital and operating costs less expected market revenues for a new, firm resource (., gas peaker or battery storage)
− Net CONE is assessed and published by grid operators for each regional market
In the following analysis, the Levelized Firming Cost is defined as the additional capacity payment, priced at Net CONE, required to bring
the ELCC of the combined system (intermittent and firming resource) to 100%. The LCOE plus Levelized Firming Cost varies between
ISOs, due to (1) the standalone LCOE in the region based on regional capacity factor for wind or solar, (2) the ELCC value of the standalone
renewable resource and (3) the region’s Net CONE
Nameplate Capacity (kW) × (1 – ELCC (%)) × Net CONE ($/kW-month) × 12 Months
Nameplate Capacity (MW) × Regional Capacity Factor (%) × 8,760 Hours
Levelized Firming Cost
($/MWh)
Cost of Firming Intermittency—Methodology
Levelized Cost of Storage Cost of Firming IntermittencyLevelized Cost of Energy
Energy Generation Energy Storage Energy System
A C O S T O F F I R M I N G I N T E R M I T T E N C Y
29
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Cost of Firming Intermittency—Results
The Cost of Firming Intermittency or “firming cost” is the incremental cost to firm1 solar, solar + storage or wind resources through
additional monthly capacity payments to a firming resource under current regional system planning constructs
LCOE plus Levelized Firming Cost ($/MWh)2
Gas Combined Cycle LCOE
($48 – $109/MWh)
Gas Peaking LCOE ($149 – $251/MWh)
2 4,5 1
Solar Wind Solar PV + Storage Wind Solar Wind Solar PV + Storage Wind Solar Wind
ELCC3 39% 26% 7% 41%4 12% 51% 20% 38% 33%4 38% 38% 25%
Capacity Factor 20% 37% 27% 27% 33% 21% 40% 18% 18% 30% 24% 34%
Resource Penetration 13% 26% 43% 43% 17% 2% 61% 2% 2% 5% 34% 46%
MISO CAISO SPP PJM ERCOT
Source: Lazard estimates and publicly available information.
Note: Total, including firming cost, does not represent the cost of building a 24/7 firm resource on a single project site but, instead, the LCOE of a renewable resource and the additional capacity costs required to achieve the resource adequacy
requirement in the relevant reliability region based on the net cost of new entry (“Net CONE”). ISO ELCC data as of April 2025 and representative of annualized ELCC values.
1 Firming costs reflect the cost of additional capacity required to supplement the net capacity of the renewable resource (nameplate capacity * (1 – ELCC)) and the Net CONE of a new firm resource (capital and operating costs, less expected market
revenues). Net CONE is assessed and published by grid operators for each regional market. Grid operators use a natural gas peaker as the assumed new resource in MISO ($ SPP ($ PJM ($ and ERCOT
($ In CAISO, the assumed new resource is a 4-hour lithium-ion battery storage system ($ For the PV + Storage cases in CAISO and PJM, assumed storage configuration is 50% of PV capacity and 4-hour duration.
2 Reflects the average of the high and low of Lazard’s LCOE for each technology using the regional capacity factor, as indicated, to demonstrate the regional differences in project costs.
3 ELCC is an indicator of the incremental reliability contribution of a given resource to the electricity grid based on its contribution to meeting peak electricity demand. For example, a 1 MW wind resource with a 15% ELCC provides MW of
capacity contribution and would need to be supplemented by MW of additional firm capacity in order to represent the addition of 1 MW of firm system capacity.
4 For PV + Storage cases, the effective ELCC value is represented. CAISO and PJM assess ELCC values separately for the PV and storage components of a system. Storage ELCC value is provided only for the capacity that can be charged directly by
the accompanying resource up to the energy required for a 4-hour discharge during peak load. Any capacity available in excess of the 4-hour maximum discharge is attributed to the system at the solar ELCC. ELCC values for storage range from 55%
to 75% for PJM and CAISO, respectively.
5 This sensitivity analysis assumes that projects qualify for the full ITC, have a capital structure that includes sponsor equity, debt and tax equity and assumes the equity owner has taxable income to monetize the tax credits.
Levelized Cost of Storage Cost of Firming IntermittencyLevelized Cost of Energy
Energy Generation Energy Storage Energy System
A C O S T O F F I R M I N G I N T E R M I T T E N C Y
$66 $61 $51
$77 $69 $65 $58
$74
$114
$77
$55 $67$53 $49 $41
$63 $59 $52 $43 $51
$93
$70
$44 $55
$50
$50 $23
$23
$86
$86
$66
$66
$73
$73
$44
$44
$14
$14
$48
$48
$51
$51
$42
$42
$42
$42
$24
$24
$116
$103
$84
$71
$137
$127
$142
$128
$142
$131
$109
$96
$72
$57
$122
$99
$164
$144
$118 $111
$97
$86 $91 $80
0
25
50
75
100
125
150
175
200
225
$250
Unsubsidized Regional LCOE Subsidized Regional LCOE (excl. Energy Community) Levelized Firming Cost
30
C O N F I D E N T I A L
Copyright 2025 Lazard
AppendixV
C O N F I D E N T I A L
Copyright 2025 Lazard
LCOE
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Year 0 1 2 3 4 5 30 Key Assumptions
Capacity (MW) (A) 300 300 300 300 300 300 Capacity (MW) 300
Capacity Factor (B) 55% 55% 55% 55% 55% 55% Capacity Factor 55%
Total Generation ('000 MWh) (C)* = (A) x (B) 1,445 1,445 1,445 1,445 1,445 1,445 Fuel Cost ($/MMBtu) $
Levelized Energy Cost ($/M Wh) (D) $ $ $ $ $ $ Heat Rate (Btu/kWh) 0
Total Revenues (E)* = (C) x (D) $ $ $ $ $ $ Fixed O&M ($/kW-year) $
Variable O&M ($/MWh) $
Total Fuel Cost (F) -- -- -- -- -- -- O&M Escalation Rate %
Total O&M (G)* Capital Structure
Total Operating Costs (H) = (F) + (G) $ $ $ $ $ $ Debt %
Cost of Debt %
EBITDA (I) = (E) - (H) $ $ $ $ $ $ Equity %
Cost of Equity %
Debt Outstanding - Beginning of Period (J) $ $ $ $ $ $ Taxes and Tax Incentives:
Debt - Interest Expense (K) () () () () () () Combined Tax Rate 40%
Debt - Principal Payment (L) () () () () () () Economic Life (years) 30
Levelized Debt Service (M) = (K) + (L) ($) ($) ($) ($) ($) ($) MACRS Depreciation (Year Schedule) 5
Capex
EBITDA (I) $ $ $ $ $ $ EPC Costs ($/kW) $1,900
Depreciation (MACRS) (N) () () () () () Additional Ow ner's Costs ($/kW) $0
Interest Expense (K) () () () () () Transmission Costs ($/kW) $0
Taxable Income (O) = (I) + (N) + (K) ($) ($) ($) ($) ($) ($) Total Capital Costs ($/kW) $1,900
Tax Benefit (Liability) (P) = (O) x (tax rate) $ $ $ $ $ ($) Total Capex ($m) $570
After-Tax Net Equity Cash Flow (Q) = (I) + (M) + (P) ($) $ $ $ $ $ ($)
IRR For Equity Investors 12%
Levelized Cost of Energy Comparison—Methodology
Lazard’s LCOE analysis consists of creating a power plant model representing an illustrative project for each relevant technology and
solving for the $/MWh value that results in a levered IRR equal to the assumed cost of equity (see subsequent “Key Assumptions” pages
for detailed assumptions by technology)
($ in millions, unless otherwise noted)
Source: Lazard estimates and publicly available information.
Note: Numbers presented for illustrative purposes only.
* Denotes unit conversion.
1 Assumes half-year convention for discounting purposes.
2 Reflects initial debt financing to fund capex.
3 Assumes full monetization of tax benefits or losses immediately.
4 Reflects initial cash outflow from equity investors to fund capex.
5 Reflects a “key” subset of all assumptions for methodology illustration purposes only. Does not reflect all assumptions.
6 Economic life sets debt amortization schedule.
1
Unsubsidized Onshore Wind — Low Case Sample Illustrative Calculations
6
3
5
4
Technology-Dependent
Consistent Across
Versions/Technologies
2
A L C O E V 1 8 . 0
33
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Levelized Cost of Energy—Key Assumptions
Renewable Energy: Solar PV
Units Community and C&I Utility
Low High Low High
Net Facility Output MW 150
Total Capital Cost $/kW $1,600 – $3,300 $1,150 – $1,600
Fixed O&M $/kW-yr $ – $ $ – $
Variable O&M $/MWh –– ––
Heat Rate Btu/kWh –– ––
Capacity Factor % 20% – 15% 30% – 20%
Fuel Price $/MMBTU
–– ––
Construction Time Months 6 15
Facility Life Years 30 35
Levelized Cost of Energy $/MWh $81 – $217 $38 – $78
Source: Lazard estimates and publicly available information.
A L C O E V 1 8 . 0
34
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Renewable Energy
Units Geothermal Wind—Onshore Wind—Offshore
Low High Low High Low High
Net Facility Output MW 250 300 900
Total Capital Cost $/kW $5,000 – $6,460 $1,900 – $2,300 $3,450 – $6,550
Fixed O&M $/kW-yr $ – $ $ – $ $ – $
Variable O&M $/MWh $ – $ –– ––
Heat Rate Btu/kWh –– –– ––
Capacity Factor % 90% – 80% 55% – 30% 55% – 45%
Fuel Price $/MMBTU –– –– ––
Construction Time Months 36 18 24
Facility Life Years 25 30 30
Levelized Cost of Energy $/MWh $66 – $109 $37 – $86 $70 – $157
Levelized Cost of Energy—Key Assumptions (cont’d)
Source: Lazard estimates and publicly available information.
A L C O E V 1 8 . 0
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Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Levelized Cost of Energy—Key Assumptions (cont’d)
Source: Lazard estimates and publicly available information.
Note: Hybrid scenarios assume 10% cost synergies for storage capital costs and 25% synergies for inverter costs due to colocation of the storage and generation asset.
Renewable Energy: Hybrid Generation + Storage
Units Solar PV + Storage—Utility Wind + Storage—Onshore
Low High Low High
Storage
Power Rating MW 50 50
Duration Hours 4 4
Usable Energy MWh 200 200
90% Depth of Discharge Cycles/Year % 350 350
Roundtrip Efficiency % 92% 92%
Inverter Cost $/kW $19 – $50 $19 – $50
Total Capital Cost (excl. Inverter) $/kWh $122 – $313 $122 – $313
Storage O&M $/kWh $ – $ $ – $
Generation
Capacity MW 100 100
Capacity Factor % % – % % – %
Project Life Years 35 30
Total Capital Cost $/kW $1,150 – $1,600 $1,900 – $2,300
Fixed O&M $/kW $ – $ $ – $
Extended Warranty Start Year 3 3
Warranty Expense % of Capital Costs % % – % % – %
Charging Cost $/MWh $ $
Unsubsidized LCOE $/MWh $50 – $131 $44 – $123
A L C O E V 1 8 . 0
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Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Levelized Cost of Energy—Key Assumptions (cont’d)
Source: Lazard estimates and publicly available information.
Conventional Energy
Units Gas Peaking (New Build) . Nuclear (New Build) Coal (New Build)
Gas Combined Cycle
(New Build)
Low High Low High Low High Low High
Net Facility Output MW 550 – 175 2,200 600 1,225 – 750
Total Capital Cost $/kW $1,150 – $1,450 $9,020 – $14,820 $3,405 – $7,210 $1,200 – $1,600
Fixed O&M $/kW-yr $ – $ $ – $ $ – $ $ – $
Variable O&M $/MWh $ – $ $ – $ $ – $ $ – $
Heat Rate Btu/kWh 10,275 – 11,175 10,450 8,750 – 12,000 6,475 – 6,550
Capacity Factor % 15% – 10% 92% – 89% 85% – 65% 90% – 30%
Fuel Price $/MMBTU $
$ $
$
Construction Time Months 24 84 60 – 66 24
Facility Life Years 30 70 40 30
Levelized Cost of Energy $/MWh $149 – $251 $141 – $220 $71 – $173 $48 – $109
A L C O E V 1 8 . 0
37
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Levelized Cost of Energy—Key Assumptions (cont’d)
Source: Lazard estimates and publicly available information.
A L C O E V 1 8 . 0
38
Marginal Cost of Selected Existing Conventional Generation
Units Gas Peaking (Operating) . Nuclear (Operating) Coal (Operating)
Gas Combined Cycle
(Operating)
Low High Low High Low High Low High
Net Facility Output MW 240 – 50 2,200 600 550
Total Capital Cost $/kW $0 $0 $0 $0
Fixed O&M $/kW-yr $ – $ $ – $ $ – $ $ – $
Variable O&M $/MWh $ – $ $ – $ $ – $ $ – $
Heat Rate Btu/kWh 10,900 – 12,550 10,400 – 10,400 10,250 – 11,800 6,950 – 7,475
Capacity Factor % 5% – 1% 91% – 87% 49% – 7% 62% – 17%
Fuel Price $/MMBtu $ – $ $ – $
$ – $
$ – $
Construction Time Months 24 84 60 24
Facility Life Years 30 70 40 30
Levelized Cost of Energy $/MWh $47 – $170 $30 – $38 $31 – $114 $24 – $39
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Renewable
Energy
Conventional Energy
Levelized Cost of Energy Components—Low End ($/MWh)
Certain renewable energy generation technologies are already cost-competitive with conventional generation technologies; key factors
regarding the continued cost decline of renewable energy generation technologies are the ability of technological development and
Industry scale to continue lowering operating expenses and capital costs for renewable energy generation technologies
Source: Lazard estimates and publicly available information.
Note: Figures may not sum due to rounding.
$74
$34
$45
$55
$32
$39
$58
$102
$113
$50
$21
$7
$4
$4
$2
$5
$5
$12
$8
$15
$5
$1
$9
$4
$4
$3
$3
$35
$9
$13
$22
$81
$38
$50
$66
$37
$44
$70
$149
$141
$71
$48
$0 $25 $50 $75 $100 $125 $150 $175
Solar PV—Community & C&I
Solar PV—Utility
Solar PV + Storage—Utility
Geothermal
Wind—Onshore
Wind + Storage—Onshore
Wind—Offshore
Gas Peaking
. Nuclear
Coal
Gas Combined Cycle
Capital Cost Fixed O&M Variable O&M Fuel Cost
Levelized Cost of Energy ($/MWh)
A L C O E V 1 8 . 0
39
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Levelized Cost of Energy Components—High End ($/MWh)
Certain renewable energy generation technologies are already cost-competitive with conventional generation technologies; key factors
regarding the continued cost decline of renewable energy generation technologies are the ability of technological development and
Industry scale to continue lowering operating expenses and capital costs for renewable energy generation technologies
Source: Lazard estimates and publicly available information.
Note: Figures may not sum due to rounding.
Renewable
Energy
Conventional Energy
$202
$70
$123
$82
$71
$108
$133
$188
$188
$134
$72
$15
$8
$8
$2
$15
$15
$23
$19
$17
$17
$10
$25
$5
$5
$6
$5
$39
$9
$18
$23
$217
$78
$131
$109
$86
$123
$157
$251
$220
$173
$109
$0 $25 $50 $75 $100 $125 $150 $175 $200 $225 $250 $275
Solar PV—Community & C&I
Solar PV—Utility
Solar PV + Storage—Utility
Geothermal
Wind—Onshore
Wind + Storage—Onshore
Wind—Offshore
Gas Peaking
. Nuclear
Coal
Gas Combined Cycle
Capital Cost Fixed O&M Variable O&M Fuel Cost
Levelized Cost of Energy ($/MWh)
A L C O E V 1 8 . 0
40
C O N F I D E N T I A L
Copyright 2025 Lazard
LCOS
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Year 0 1 2 3 4 5 20 Key Assumptions
Capacity (MW) (A) 100 100 100 100 100 100 Power Rating (MW) 100
Available Capacity (MW) 110 109 107 104 102 110 110 Duration (Hours) 2
Total Generation ('000 MWh) (B)* 63 63 63 63 63 63 Usable Energy (MWh) 200
Levelized Storage Cost ($/MWh) (C) $95 $95 $95 $95 $95 $95 90% Depth of Discharge Cycles/Day 1
Total Revenues (D)* = (B) x (C) $ $ $ $ $ $ Operating Days/Year 350
Charging Cost ($/kWh) $
Total Charging Cost (E) () () () () () () Fixed O&M Cost ($/kWh) $
Total O&M, Warranty, & Augmentation (F)* () () () () () () Fixed O&M Escalator (%) %
Total Operating Costs (G) = (E) + (F) ($) ($) ($) ($) ($) ($) Charging Cost Escalator (%) %
Efficiency (%) 91%
EBITDA (H) = (D) - (G) $ $ $ $ $ $ Capital Structure
Debt %
Debt Outstanding - Beginning of Period (I) $ $ $ $ $ $ Cost of Debt %
Debt - Interest Expense (J) () () () () () () Equity %
Debt - Principal Payment (K) () () () () () () Cost of Equity %
Levelized Debt Service (L) = (J) + (K) () () () () () () Taxes
Combined Tax Rate %
EBITDA (H) $ $ $ $ $ $ Economic Life (years) 20
Depreciation (MACRS) (M) () () () () () MACRS (Year Schedule) 5 Years
Interest Expense (J) () () Federal ITC - BESS 40%
Taxable Income (N) = (H) + (M) + (J) ($) ($) ($) ($) ($) $ Capex
Tax Benefit (Liability) (O) = (N) x (Tax Rate) $ $ $ $ $ ($) Total Initial Installed Cost ($/kWh) $169
Extended Warranty (% of Capital Cost) %
Federal Investment Tax Credit (ITC) (P) $ $ $ $ $ $ Extended Warranty Start Year 3
Total Capex ($m) $34
After-Tax Net Equity Cash Flow (Q) = (H) + (L) + (O) + (P) ($) $ $ $ $ $ $
IRR For Equity Investors %
Levelized Cost of Storage Comparison—Methodology
Lazard’s LCOS analysis consists of creating a power plant model representing an illustrative project for each relevant technology and
solving for the $/MWh value that results in a levered IRR equal to the assumed cost of equity (see subsequent “Key Assumptions” page for
detailed assumptions by technology)
Source: Lazard estimates and publicly available information.
Note: Numbers presented for illustrative purposes only.
* Denotes unit conversion.
1 Assumes half-year convention for discounting purposes.
2 Total Generation reflects (Cycles) x (Available Capacity) x (Depth of Discharge) x (Duration). Note for the purpose of this analysis, Lazard accounts for degradation in the available capacity calculation.
3 Charging Cost reflects (Total Generation) / [(Efficiency) x (Charging Cost) x (1 + Charging Cost Escalator)].
4 O&M costs include general O&M (BESS plus any relevant Solar PV or Wind O&M, escalating annually at %), augmentation costs (incurred in years needed to maintain usable energy at original storage module cost) and warranty costs
starting in year 3.
5 Reflects initial debt financing to fund capex.
6 Reflects initial cash outflow from equity sponsor.
7 Reflects a “key” subset of all assumptions for methodology and illustration purposes only. Does not reflect all assumptions.
8 Initial Installed Cost includes inverter cost, module cost, balance-of-system cost and EPC cost.
Subsidized Utility-Scale Standalone (100 MW/200 MWh)—Low Case Sample Calculations
1 7
4
8
2
3
6
Technology-Dependent
Consistent Across
Versions/Technologies
($ in millions, unless otherwise noted)
5
B L C O S V 1 0 . 0
42
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Levelized Cost of Storage—Key Assumptions
Utility-Scale
Standalone
C&I
Standalone
Residential
Standalone
Units (100 MW/200 MWh) (100 MW/400 MWh) (1 MW/2 MWh) ( MW/ MWh)
Power Rating MW 100 100 1
Duration Hours
Usable Energy MWh 200 400 2
90% Depth of Discharge Cycles/Day # 1 1 1 1
Operating Days/Year # 350 350 350 350
Solar/Wind Capacity MW
Annual Solar/Wind Generation MWh 0 0 0 0
Project Life Years 20 20 20 20
Annual Storage Output MWh 63,000 126,000 630 8
Lifetime Storage Output MWh 1,260,000 2,520,000 12,600 158
Initial Capital Cost—DC $/kWh $113 – $244 $107 – $232 $238 – $445 $721 – $1,338
Initial Capital Cost—AC $/kW $26 – $70 $25 – $67 $40 – $80 $0 – $0
EPC Costs $/kWh $29 – $122 $28 – $116 $56 – $168 $0 – $0
Solar/Wind Capital Cost $/kW $0 – $0 $0 – $0 $0 – $0 $0 – $0
Total Initial Installed Cost M $ $31 – $80 $56 – $146 $1 – $1 $0 – $0
Storage O&M $/kWh $ – $ $ – $ $ – $ $ – $
Extended Warranty Start Year 3 3 3 3
Warranty Expense % of Capital Costs % % – % % – % % – % % – %
Investment Tax Credit (Solar) % 0% 0% 0% 0%
Investment Tax Credit (Storage) % % – % % – % % – % % – %
Production Tax Credit $/MWh $0 $0 $0 $0
Charging Cost $/MWh $33 $27 $111 $152
Charging Cost Escalator % % % % %
Efficiency of Storage Technology % 91% – 87% 92% – 86% 92% – 88% 91% – 88%
Unsubsidized LCOS $/MWh $129 – $277 $115 – $254 $319 – $506 $547 – $860
Source: Lazard estimates and publicly available information.
Note: All cases were modeled using 90% depth of discharge and 10% overbuild. Wholesale charging costs reflect weighted average hourly wholesale energy prices across a representative charging profile of a standalone storage asset
participating in wholesale revenue streams. Escalation is derived from the EIA’s “AEO 2022 Energy Source–Electric Price Forecast (20-year CAGR)”.
B L C O S V 1 0 . 0
43
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
In-Front-of-the-Meter
Storage
Behind-the-Meter
Storage
$62
$58
$124
$296
$20
$18
$41
$32
$47
$39
$154
$220
$129
$115
$319
$547
$0 $100 $200 $300 $400 $500 $600
Utility-Scale Standalone
(100 MW, 2-Hour)
Utility-Scale Standalone
(100 MW, 4-Hour)
C&I Standalone
(1 MW, 2-Hour)
Residential Standalone
( MW, 4-Hour)
Capital Cost Fixed O&M Charging Cost
Levelized Cost of Storage Components—Low End ($/MWh)
Capital costs, fixed operating costs and charging costs contribute to the all-in cost in varying proportions depending on the specific
energy storage use case and configuration
Source: Lazard estimates and publicly available information.
Note: Figures may not sum due to rounding.
Levelized Cost of Storage ($/MWh)
B L C O S V 1 0 . 0
44
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
In-Front-of-the-Meter
Storage
Behind-the-Meter
Storage
$174
$161
$275
$566
$49
$48
$61
$61
$53
$45
$171
$233
$277
$254
$506
$860
$0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000
Utility-Scale Standalone
(100 MW, 2-Hour)
Utility-Scale Standalone
(100 MW, 4-Hour)
C&I Standalone
(1 MW, 2-Hour)
Residential Standalone
( MW, 4-Hour)
Capital Cost Fixed O&M Charging Cost
Levelized Cost of Storage Components—High End ($/MWh)
Capital costs, fixed operating costs and charging costs contribute to the all-in cost in varying proportions depending on the specific
energy storage use case and configuration
Source: Lazard estimates and publicly available information.
Note: Figures may not sum due to rounding.
Levelized Cost of Storage ($/MWh)
B L C O S V 1 0 . 0
45
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Energy Storage Use Cases—Overview
By identifying and evaluating selected energy storage applications, Lazard’s LCOS analyzes the cost of energy storage for in-front-of-the-
meter and behind-the-meter use cases
Source: Lazard estimates and publicly available information.
1 For the purposes of this analysis, “energy arbitrage” in the context of storage systems paired with solar PV includes revenue streams associated with the sale of excess generation from the solar PV system, as appropriate, for a given use
case.
2 The Value Snapshot Case Studies only evaluate the 4-hour utility-scale use case.
Use Case Description Technologies Assessed
In
-F
ro
nt
-o
f-
th
e-
M
et
er
St
or
ag
e
Utility-Scale
Standalone
• Large-scale energy storage system designed for rapid start and precise following of
dispatch signal
• Variations in system discharge duration are designed to meet varying system
needs (., short-duration frequency regulation, longer-duration energy arbitrage1
or capacity, etc.)
− To better reflect current market trends, this analysis analyzes 2- and 4-hour
durations2
• Lithium Iron Phosphate (LFP)
• Lithium Nickel Manganese
Cobalt Oxide (NMC)
B
eh
in
d-
th
e-
M
et
er
S
to
ra
ge
Commercial &
Industrial
Standalone
• Energy storage system designed for behind-the-meter peak shaving and demand
charge reduction for C&I users
− Units are often configured to support multiple commercial energy management
strategies and provide optionality for the system to provide grid services to a
utility or the wholesale market, as appropriate, in a given region
• Lithium Iron Phosphate (LFP)
• Lithium Nickel Manganese
Cobalt Oxide (NMC)
Residential
Standalone
• Energy storage system designed for behind-the-meter residential home use—
provides backup power and power quality improvements
− Depending on geography, can arbitrage residential time-of-use (“TOU”) rates
and/or participate in utility demand response programs
• Lithium Iron Phosphate (LFP)
• Lithium Nickel Manganese
Cobalt Oxide (NMC)
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46
Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Energy Storage Use Cases—Illustrative Operational Parameters
Lazard’s LCOS evaluates selected energy storage applications and use cases by identifying illustrative operational parameters 1
• Energy storage systems may also be configured to support combined/“stacked” use cases
Project
Life
(Years)
Storage
(MW)2
Solar/
Wind
(MW)
Battery
Degradation
(per annum)
Storage
Duration
(Hours)
Nameplate
Capacity
(MWh)3
90% DOD
Cycles/
Day4
Days/
Year5
Annual
MWh6
Project
MWh
In
-F
ro
nt
-o
f-
th
e-
M
et
er
St
or
ag
e
Utility-Scale
Standalone
20 100 – % 2 200 1 350 63,000 1,260,000
20 100 – % 4 400 1 350 126,000 2,520,000
B
eh
in
d-
th
e-
M
et
er
S
to
ra
ge
Commercial &
Industrial
Standalone
20 1 – % 2 2 1 350 630 12,600
Residential
Standalone 20 – % 4 1 350 8 158
= “Usable Energy”7
A B FC ED
x
=
B C
G
x x
=
D E F
H
x
=
A G
Source: Lazard estimates and publicly available information.
Note: Operational parameters presented herein are applied to Value Snapshot and LCOS calculations. Annual and Project MWh in the Value Snapshot analysis may vary from the representative project.
1 The use cases herein represent illustrative current and contemplated energy storage applications.
2 Indicates power rating of system (., system size).
3 Indicates total battery energy content on a single, 100% charge or “usable energy”. Usable energy divided by power rating (in MW) reflects hourly duration of system. This analysis reflects common practice in the market whereby batteries
are upsized in year one to 110% of nameplate capacity (., a 100 MWh battery actually begins project life with 110 MWh).
4 “DOD” denotes depth of battery discharge (., the percent of the battery’s energy content that is discharged). A 90% DOD indicates that a fully charged battery discharges 90% of its energy. To preserve battery longevity, this analysis
assumes that the battery never charges over 95%, or discharges below 5%, of its usable energy.
5 Indicates number of days of system operation per calendar year.
6 Augmented to nameplate MWh capacity as needed to ensure usable energy is maintained at the nameplate capacity, based on Year 1 storage module cost.
7 Usable energy indicates energy stored and available to be dispatched from the battery.
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Copyright 2025 Lazard
This analysis has been prepared by Lazard for general informational and illustrative purposes only, and it is not intended to be, and should not be construed as, financial or
other advice. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of Lazard.
Lazard’s LCOE+ will continue to evolve over time, and we appreciate that there can, and will be, varied views regarding the specifics of our analyses. Accordingly, we would be
happy to discuss any of our underlying assumptions and analyses in further detail—and, to be clear, we welcome these discussions as we try to improve our studies over time. In
that regard, the studies remain our attempt to contribute in a differentiated and impactful manner to the Industry.
More generally, Lazard remains committed to our Power, Energy & Infrastructure Group clients, who remain our highest priority. In that regard, we believe that we have the greatest
allocation of resources and effort devoted to this sector of any investment bank. Further, we have an ongoing and intense focus on strategic issues that require long-term
commitment and planning. Accordingly, Lazard strives to maintain its preeminent position as a thought leader and leading advisor to clients on their most important matters,
especially in this Industry.
If you have any questions regarding this memorandum or Lazard’s LCOE+, please feel free to contact any member of the Lazard Power, Energy & Infrastructure Group, including
those listed below.
Isabelle Carpenter
Analyst
Tel: +1 917 994-3154
@
Quinn Lewis
Analyst
Tel: +1 332 204-5512
@
George Rao
Analyst
Tel: +1 713 236-4659
@
Bill Sembo
Senior Advisor
Tel: +1 713 236-4653
@
George Bilicic
Vice Chairman of Investment Banking, Global Head of Power, Energy & Infrastructure
Tel: +1 212 632-1560
@
Frank Daily
Managing Director
Tel: +1 713 236-4647
@
Pablo Hernandez
Schmidt-Tophoff
Managing Director
Tel: +1 713 236-4618
@
Gregory Hort
Managing Director
Tel: +1 212 632-6022
@
Mark Lund
Managing Director
Tel: +1 713 236-4639
@
Chris Miller
Managing Director
Tel: +1 713 236-4675
@
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Managing Director
Tel: +1 212 632-6758
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Kevin Chi
Director
Tel: +1 212 632-8240
@
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Director
Tel: +1 212 632-1966
@
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Director
Tel: +1 713 236-4673
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Director
Tel: +1 713 236-4624
@
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Director
Tel: +1 713 236-4652
@
Sarah Steiner
Director
Tel: +1 212 632-1873
@
Li Wynn Tan
Director
Tel: +1 212 632-1313
@
Lauren Davis
Vice President
Tel: +1 332 204-5527
@
Brody Adams
Associate
Tel: +1 917 994-3218
@
Zain Baquer
Associate
Tel: +1 917 994-3302
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Clare Everts
Associate
Tel: +1 917 994-3240
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Sebastian Laso Errazuriz
Associate
Tel: +1 917 994-3210
@
B L C O S V 1 0 . 0
48
LEVELIZED COST OF ENERGY+
Slide Number 2
Slide Number 3
Executive Summary—Selected Key Findings from Lazard’s 2025 LCOE+
Slide Number 5
Slide Number 6
Introduction
Levelized Cost of Energy Comparison—Version
Levelized Cost of Energy Comparison—Sensitivity to . Federal Tax Subsidies
Levelized Cost of Energy Comparison—Sensitivity to Fuel Prices
Levelized Cost of Energy Comparison—Sensitivity to Carbon Pricing
Levelized Cost of Energy Comparison—Sensitivity to Cost of Capital1
Levelized Cost of Energy Comparison—New Build Renewable Generation vs. Marginal Cost of Conventional Generation
Levelized Cost of Energy Comparison—Historical LCOE Comparison
Levelized Cost of Energy Comparison—Historical Renewable Energy LCOE
Slide Number 16
Slide Number 17
Introduction
Levelized Cost of Storage Comparison—Version ($/MWh)
Levelized Cost of Storage Comparison—Version ($/kW-year)
Levelized Cost of Storage Comparison—Historical LCOS Comparison
Storage Value Snapshot Case Studies—Revenue Potential for Selected Use Cases
Storage Value Snapshot Case Studies—Overview
Storage Value Snapshot Case Studies—Results
Slide Number 25
Slide Number 26
Market Overview—Current Generation Mix
Market Overview—Current Firming Cost Frameworks
Slide Number 29
Cost of Firming Intermittency—Results
Slide Number 31
Slide Number 32
Levelized Cost of Energy Comparison—Methodology
Levelized Cost of Energy—Key Assumptions
Levelized Cost of Energy—Key Assumptions (cont’d)
Levelized Cost of Energy—Key Assumptions (cont’d)
Levelized Cost of Energy—Key Assumptions (cont’d)
Levelized Cost of Energy—Key Assumptions (cont’d)
Levelized Cost of Energy Components—Low End ($/MWh)
Levelized Cost of Energy Components—High End ($/MWh)
Slide Number 41
Levelized Cost of Storage Comparison—Methodology
Levelized Cost of Storage—Key Assumptions
Levelized Cost of Storage Components—Low End ($/MWh)
Levelized Cost of Storage Components—High End ($/MWh)
Energy Storage Use Cases—Overview
Energy Storage Use Cases—Illustrative Operational Parameters
Slide Number 48
