The global benchmark cost for a 4-hour battery project dropped 27% YoY to $78/MWh in 2025, says BloombergNEF
Other clean technologies like fixed-axis solar and onshore and offshore wind became costlier due to supply chain constraints, weaker resources, and market reforms in China
Thermal power costs increased sharply, driven by higher equipment prices and strong demand from data centers
In 2025, 87 GW of combined solar and storage projects were installed at an average cost of $57/MWh as co-located systems continue to become competitive
The growing adoption of battery storage ensured the cost of such projects declined to record lows in 2025, even as prices for other clean power technologies spiraled up.
According to Bloomberg New Energy Finance (BloombergNEF), the global benchmark cost for a 4-hour battery project declined by 27% year-over-year (YoY) to $78/MWh last year. This is a record low since 2009, when it started tracking costs, determined by lower pack prices, increasing competition amongst manufacturers, and improved system designs.
In comparison, the benchmark cost of a typical fixed-axis solar farm rose by 6% to $39/MWh. It reached $40/MWh for onshore wind and $100/MWh for offshore wind. Prices for these clean technologies rose owing to supply chain constraints, tighter resource availability, and market reforms in mainland China, reads BloombergNEF’s Levelized Cost of Electricity 2026 report.
Thermal power became more expensive in 2025. Higher equipment prices for new gas and coal plants pushed the global cost of electricity from combined-cycle gas turbines (CCGTs) up 16% to $102/MWh, the highest level ever recorded. BloombergNEF expects gas turbine prices to remain elevated in the near future with high demand from data centers.
On the other hand, the trend of co-located renewable energy projects, especially those combining solar with storage, is accelerating the decline in battery storage prices. In 2025, 87 GW of combined solar and storage projects were installed, delivering power at an average of $57/MWh.
“The levelized cost of electricity for a four-hour system is now below $100/MWh in six markets. As costs continue to drop, we expect battery storage to strengthen solar project revenues, support broader renewable deployment and accelerate the shift toward storage-led system balancing over fossil-fuel-based peaking capacity,” said Amar Vasdev, the Lead Author of the report and Senior Energy Economics Associate at BloombergNEF.
Going forward, analysts stress that co-located, fast-to-install solar and 4-hour battery systems can meet a substantial share of data-center electricity demand at a lower cost than gas, as the latter faces supply chain and grid connection delays. These are becoming more competitive in places like California and Texas.
“We are in the middle of a race for electrons to meet power demand growth from electrification and data centers. Renewables are already outcompeting the operating costs of existing fossil-fuel plants in key markets, and not just for new-build projects,” said Vasdev.
BloombergNEF expects clean energy technology costs to keep falling despite trade barriers, supply chain issues, and higher financing costs, driven by innovation and competition. By 2035, it forecasts LCOE cost reductions of 30% in solar, 25% in battery storage, 23% in onshore wind, and 20% in offshore wind.
Vasdev added, “New solar farms already undercut new coal or gas generation in almost all Asia-Pacific markets, while wind has displaced gas as the cheapest source of new-build generation in the US and Canada. Solar consistently beats fossil-fuel alternatives in Southern Europe and wind in Northern Europe.”
The Energy and Resources Institute (TERI) in a 2025 report on the Indian market claimed that solar and storage together are more cost-effective than new thermal power plants for round-the-clock electricity (see TERI: Solar-Plus-Storage Now Cheaper Than New Thermal Power).
Ember’s 2025 report stressed that 24/365 solar generation is already cheaper than coal or nuclear power in several parts of the world, thanks to storage integration (see Batteries Can Unlock '24/365 Solar Generation', Says Ember).
TaiyangNews explored the role of inverters and storage businesses in the growth of solar generation in the 2nd edition of its Inverters & Battery Storage Conference (see Inverters And Battery Storage Drive Smarter Solar Systems).