Fact brief – Does solar energy need subsidies to compete with fossil fuels?
Posted on 16 June 2026 by Sue Bin Park
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Does solar energy need subsidies to compete with fossil fuels?
Unsubsidized utility-scale solar is now generally cheaper than building fossil fuel power plants.
Costs are often compared using “levelized cost of energy,” the average lifetime cost to build and run a power plant divided by the electricity it produces. A 2025 analysis estimates the mean LCOE of utility-scale solar at about $58 per megawatt-hour without subsidies, compared to $79 for new natural gas plants and $128 for new coal. The International Energy Agency reports solar energy is the cheapest source of new electricity generation in most parts of the world.
Solar costs have fallen sharply over the past decade as panel prices have dropped and the industry has grown. Subsidies can further lower costs, but solar is not dependent on them to compete with fossil fuels.
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This fact brief is responsive to quotes such as this one.
Sources
International Energy Agency World Energy Outlook 2020
Lazard Lazard Releases 2025 Levelized Cost of Energy+ Report
Reuters Around 90% of renewables cheaper than fossil fuels worldwide, IRENA says
Scientific American Wind and Solar Energy Are Cheaper Than Electricity from Fossil-Fuel Plants
Columbia Law School Sabin Center for Climate Change Law Rebutting 33 False Claims About Solar, Wind, and Electric Vehicles
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Fact briefs are short, credibly sourced summaries that offer “yes/no” answers in response to claims found online. They rely on publicly available, often primary source data and documents. Fact briefs are created by contributors to Gigafact — a nonprofit project looking to expand participation in fact-checking and protect the democratic process. See all of our published fact briefs here.
