Solar, Wind, and Battery Costs to Drop in 2025: BNEF

The cost of renewable energy technologies, including solar, wind, and battery storage, is expected to decline further in 2025 by 2-11 percent, continuing the trend of falling prices that has made clean energy more competitive than fossil fuels in most global markets.

According to BloombergNEF’s (BNEF) latest Levelized Cost of Electricity (LCOE) Report, the global benchmark cost for battery storage projects dropped by a third in 2024 to USD 104 per megawatt-hour (MWh), largely due to an oversupply of battery packs caused by slowing electric vehicle sales. Meanwhile, the cost of fixed-axis solar farms declined by 21 percent globally, as manufacturers sold solar modules at or below production costs amid continued overcapacity. In 2025, battery storage costs are expected to fall below USD 100/MWh, while wind and solar power costs will decline further by 4 percent and 2 percent, respectively.

China’s dominance in clean-tech manufacturing has been a key driver behind these cost reductions, with the country able to produce electricity from major power-generating technologies 11-64 percent cheaper than other markets. Onshore wind power in China, for example, costs 24 percent less than the global benchmark of USD 38/MWh, thanks to lower turbine prices. However, wind turbine costs outside China have remained high since 2020, as manufacturers maintain pricing strategies to improve margins. Despite trade barriers such as import tariffs introduced by various countries to protect their domestic industries, BNEF still expects the LCOE for clean energy technologies to decline between 22-49 percent by 2035, with onshore wind falling 26 percent, offshore wind 22 percent, fixed-axis solar PV 31 percent, and battery storage nearly 50 percent.

The rapid decline in renewable energy costs has made new solar and wind farms more cost-effective than new coal and gas plants in nearly every major market. “New solar plants, even without subsidies, are within touching distance of new US gas plants. This is remarkable, given that US gas prices are only a quarter of prevailing prices in Europe and Asia,” said Amar Vasdev, lead author of the BNEF report.

"This makes solar even more attractive in the coming years, especially as the US moves toward exporting liquefied natural gas (LNG), exposing its protected gas market to global price competition," he further added.

Despite concerns about China’s increasing dominance in the global renewable energy supply chain, experts believe that the overall trend of cost reductions is too strong to be reversed. “China is exporting green energy tech so cheaply that the rest of the world is considering trade barriers to protect their own industries,” said Matthias Kimmel, Head of Energy Economics at BNEF. “But the overall trend of cost reductions is so strong that nobody—not even President Trump—will be able to stop it," he noted.

As clean energy continues to outcompete fossil fuels on cost, the global energy transition is expected to accelerate, further reducing reliance on coal and gas in the years ahead.