Fact brief: Does solar energy need subsidies to compete with fossil fuels?

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No.

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.

See a full discussion of this at Skeptical Science

This fact brief responds to conversations 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

Skeptical Science is a non-profit science education organization. Our goal is to remove a roadblock to climate action by building public resilience against climate misinformation. We achieve this by publishing debunking of climate myths as well as providing resources for educators, communicators, scientists, and the general public. Skeptical Science was founded and is led by John Cook, a Senior Research Fellow with the Melbourne Centre for Behaviour Change at the University of Melbourne.

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