Which form of energy is the cheapest? CBS News asked the experts to find out.

The debate over which form of energy offers the best value in today’s world is more critical than ever, especially in the face of climate change. The emergence of renewable energy sources like wind and solar has sparked a heated discussion on the national stage, with policymakers and industry leaders weighing in on the best path forward.

In the United States, energy policy has long been influenced by political factors. Former President Biden made a significant endorsement of renewable energy with the 2022 Inflation Reduction Act (IRA), which provided tax credits and rebates for investments in clean energy technologies. In contrast, President Trump has been a strong supporter of the oil and gas industry, signing legislation that phases out clean energy incentives while expanding tax breaks for fossil fuels.

The global trade landscape has also been affected by these policies, with tariffs imposed on numerous U.S. trading partners potentially driving up costs for energy projects. Concerns over rising energy prices have led to a push for policies that benefit traditional energy sources like oil and gas.

To determine the cheapest form of energy, CBS News conducted an analysis of the costs associated with producing coal, gas, nuclear, wind, and solar energy. The Levelized Cost of Energy (LCOE) was used as a benchmark for wholesale energy costs, taking into account factors such as tax incentives and tariffs.

While LCOE calculations are widely used, they do not provide a complete picture of the cost and value of energy. Other factors, including interest rates and federal regulations, can significantly impact the cost of energy infrastructure. Additionally, the reliability of certain energy sources, such as solar and wind, must be considered, as they may require backup sources of energy.

Government tax subsidies have historically played a role in energy production, with oil and gas companies receiving support for over a century. Renewable energy projects have only recently begun to receive a larger share of federal funding. The IRA introduced by President Biden includes provisions aimed at lowering the cost of developing clean energy projects, such as the investment tax credit and production tax credit.

However, the recent legislation signed by President Trump will phase out these credits over the next two years, favoring the oil and gas industry with nearly $18 billion in tax incentives over the next decade. Estimates vary on the total amount of subsidies provided to the fossil fuel industry, with figures ranging from $20 billion to $760 billion annually.

Oil and gas companies have welcomed the new legislation as a victory for the industry, highlighting the ongoing debate over the best approach to energy production in the face of climate change and rising energy prices. The impact of tariffs on energy production costs is a topic of concern for many in the industry. Sunil Mathew, the chief financial officer of Occidental Petroleum, recently highlighted the significant cash tax benefits that the company expects to receive as a result of the new law. Occidental Petroleum anticipates savings of $700 million to $800 million in cash taxes by the end of next year.

In addition to tax benefits, tariffs imposed by President Trump are also expected to affect the cost of funding energy projects in the United States. To assess the impact of tariffs on energy costs, CBS News consulted a model developed by Wood Mackenzie, a global data and analytics company.

According to the model, battery storage production is projected to be most heavily impacted by U.S. tariffs. Chris Seiple, vice chairman of the power and renewables group at Wood Mackenzie, explained that while some energy equipment is domestically produced, technologies like battery cells are predominantly imported from abroad, making them more vulnerable to tariffs.

The potential increase in costs due to tariffs could lead to companies relocating their manufacturing operations to non-tariffed countries to avoid additional financial burdens. This shifting of production locations could result in a “whack-a-mole” effect over time.

Despite the challenges posed by tariffs, renewable energy sources remain the most cost-competitive form of generating and distributing energy. According to Lazard, onshore wind and utility-scale solar are the most affordable forms of energy production. In contrast, fossil fuel and nuclear energy sources are more expensive to generate.

Experts attribute the cost-effectiveness of renewable energy to lower operating and maintenance expenses compared to fossil fuel production. The volatility of oil, gas, and coal prices also contributes to the higher costs associated with fossil fuel energy production.

While renewable energy is considered the most competitive in terms of costs, experts emphasize the importance of maintaining a diverse range of energy sources to meet growing electricity demands. Combining various forms of energy is crucial for achieving the most cost-effective energy system.

In conclusion, the interplay between tariffs, tax benefits, and energy production costs underscores the complexity of the energy industry. As companies navigate these challenges, it is essential to prioritize sustainability, affordability, and reliability in the pursuit of a robust energy infrastructure. Before transitioning to the business and finance sector, she gained valuable experience working at “60 Minutes,” CBSNews.com, and CBS News 24/7 as part of the prestigious CBS News Associate Program. This program provided her with a solid foundation in journalism and reporting, equipping her with the skills and knowledge needed to excel in the fast-paced world of news media.

During her time at “60 Minutes,” she had the opportunity to work alongside some of the industry’s top journalists and producers, learning the ins and outs of investigative reporting and storytelling. She honed her research and fact-checking skills, ensuring that every story was thoroughly vetted and accurate before going to air. Her time at CBSNews.com allowed her to expand her digital journalism skills, learning how to craft compelling online content that engaged readers and viewers.

At CBS News 24/7, she gained valuable experience working in a 24-hour news environment, where deadlines were tight and accuracy was paramount. She learned how to work under pressure, delivering breaking news stories with speed and precision. This experience taught her the importance of staying calm and focused in high-pressure situations, a skill that would serve her well in her future career in the business and finance vertical.

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With her background in journalism and her passion for storytelling, she is poised to make a significant impact in the business and finance vertical. Her dedication to accuracy, thorough research, and compelling storytelling will set her apart in the competitive world of financial journalism. She is ready to take on new challenges and continue to grow and evolve in her career, bringing a fresh perspective and unique voice to the business and finance sector.