The cost of clean power technologies such as wind, solar, and battery technologies are expected to fall further by 2–11% in 2025, breaking 2024’s record.
According to a latest report by research provider BloombergNEF (BNEF), new wind and solar farms are already undercutting new coal and gas plants on production cost in almost every market globally. Meanwhile, China’s clean technology manufacturing overcapacity has led to rising protectionism in the form of import tariffs by countries to avoid cheap imports upending their own energy markets. Trade barriers could temporarily stall cost declines, but BNEF still expects the levelised cost of electricity for clean technologies to fall 22–49% by 2035.
BNEF’s levelised cost of electricity report indicates that the global benchmark cost for battery storage projects fell by a third in 2024 to US$104 MWh, as a surplus in supply due to slower electric vehicle sales led to cheaper prices for battery packs. Meanwhile, the cost of a typical fixed axis solar farm fell by 21% globally last year. Modules were sold at or below the cost of production, with no signs of the overcapacity in the solar supply chain easing in 2025. Batteries will cross the $100/MWh watershed in 2025, while global benchmarks for wind and solar generation are also set to fall 4% and 2%, respectively.
Amar Vasdev, Lead Author of BNEF’s report, noted: “New solar plants, even without subsidies, are within touching distance of new US gas plants. This is remarkable because US gas prices are only a quarter of prevailing gas prices in Europe and Asia. It really raises the bar on what is possible even in the current market. This opens up the likelihood that solar will become even more compelling in the coming years, especially if the US starts exporting liquified natural gas and exposes its protected gas market to global price competition.”
China’s abundance of clean technology manufacturing capacity was a key driver behind cost declines last year and has a major impact on project economics at home and abroad. On average, the country can produce a MWh of electricity from major power generating technologies 11–64% cheaper than other markets.
For example, power generated from onshore wind turbines costs around 24% less than the global benchmark of US$38/MWh. While wind turbine prices in China have been falling, they have increased elsewhere since 2020. BNEF’s turbine price index shows component costs coming down again in 2025, but manufacturers are keeping prices high to improve margins.
Although clean power technologies have improved markedly over the last few decades, there is still room for further technological and economic efficiencies. Looking to 2035, BNEF’s global benchmark LCOEs falls 26% for onshore wind, 22% for offshore wind, 31% for fixed-axis photovoltaics, and almost 50% for battery storage.
Matthias Kimmel, Head of Energy Economics at BNEF, commented: “China is exporting green energy technology so cheaply that the rest of the world is thinking about erecting barriers to protect their own industries, but the overall trend in cost reductions is so strong that nobody, not even President Trump, will be able to halt it.”
BNEF’s levelised cost of electricity, now in its sixteenth year, provides the industry standard for the cost of electricity generation, covering 29 technologies in over 50 countries.
For more news and technical articles from the global renewable industry, read the latest issue of Energy Global magazine.
Energy Global’s Winter 2024 issue
Don’t miss out on our last issue of the year! The Winter issue of Energy Global is out now; this issue kicks off with a guest comment from Veronica Maxted, Director of Renewables at RS Group before moving on to a regional report on the current state of the renewables industry in North America. This edition of the magazine also explores key topics such as inspection and maintenance, solar optimisation, energy storage technology, geothermal drilling and operations, and much more. With contributions from key industry leaders such as Viridien, Hexagon, DNV Energy Systems, and Halliburton, among others, dive into the issue and see what you could learn.
Read the article online at: https://www.energyglobal.com/energy-storage/07022025/global-cost-of-renewables-to-continue-falling-in-2025-as-china-extends-manufacturing-lead/
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