Writing in the Journal of Environmental Studies and Sciences, researchers said the model used by the government is incomplete because it all but ignores the economic damages climate change will inflict on future generations.
Without properly accounting for pollution costs, natural gas appears to be the cheapest generation option for new power plants, but that's a faulty assumption, the study authors said.
"It turns out that the price we now pay for energy is much higher than what shows up on our electric bills or the tab at the gas pump," Laurie Johnson, chief economist in the climate and clean air program at the Natural Resources Defense Council, said.
Considering the economic costs of carbon and other pollutants from fossil fuel generation, the researchers said, building new electricity generation capacity using wind and solar power would be more cost effective than either natural gas or coal.
"With approximately 40 percent of all carbon emissions in the United States coming from power plants, the economic advantages of clean electricity sources are significant," Johnson said.