Solar, Wind Emerge as Canada’s Cheapest New Power as Prices Fall by Half

This article was published by The Energy Mix on Feb. 2, 2026.

Contracted energy costs for wind and solar projects in Canada have fallen to half of what they were 10 years ago, new analysis shows.

“Now, they’re the lowest-cost form of new electricity generation,” write Pembina Institute electricity program manager David Pickup and senior analyst Will Noel, citing Ontario and Alberta grid operators and global analysts. The authors say the trend is expected to continue, with projections that wind and solar costs will fall another 25% to 50% over the next decade.

The cost decline comes at a good time, as demand for new electricity generation rises with the increasing adoption of electric vehicles, heat pumps, and other new technologies.

Plunging price trends make new wind and solar projects more affordable, and they can also be brought online faster than fossil fuel and nuclear power plants, Pickup and Noel add. “Getting more affordable electricity generation onto the grid— fast—underpins the competitiveness of the economy.”

Competitive procurement processes at the provincial level helped the wind and solar sectors expand by creating market certainty. The provinces that ran these procurements are now on track to bring online thousands of megawatts of renewable energy in the coming years. Quebec, for instance, has announced plans to develop 10,000 megawatts of wind and 3,000 megawatts of solar energy by 2035, and Manitoba is set to request proposals this March to procure 600 megawatts of wind. In Ontario, a technology-agnostic competitive bid process for up to 7,500 megawatts of new energy and capacity is under way, open to wind and solar developers, energy storage projects, and gas plants.

The Pembina analysts say provincial and territorial governments aiming to take advantage of low-cost electricity from wind and solar will need to plan their systems around a modernized grid.

“This means harnessing the latest technology—including interprovincial interties, demand-side measures, and long-duration energy