Battery Storage Costs Plunge to $78/MWh in 2025 Amid Rising Renewable Costs

Battery storage costs fell sharply in 2025 even as the cost of most other clean power technologies increased, according to the latest Levelized Cost of Electricity (LCOE) 2026 report by BloombergNEF (BNEF).

The report found that the global benchmark cost for a four-hour battery storage project dropped 27% year-on-year to $78 per megawatt-hour (MWh) in 2025, the lowest level recorded since BNEF began tracking the data in 2009. Lower battery pack prices, rising competition among manufacturers and improved system designs were key drivers behind the decline (BloombergNEF, 2026).

Falling battery costs are also accelerating the deployment of hybrid renewable projects. In 2025, developers installed 87GW of co-located solar and storage capacity, producing electricity at an average cost of $57/MWh, the report noted.

In contrast, the cost of several other renewable technologies increased during the year. The global benchmark LCOE for fixed-axis solar farms rose 6% to $39/MWh, while onshore wind climbed to $40/MWh and offshore wind surged to $100/MWh amid supply-chain constraints, weaker resource availability in some regions and market reforms in China (BloombergNEF, 2026).

Amar Vasdev, senior energy economics associate at BloombergNEF and lead author of the report, said falling battery prices are transforming the economics of energy storage. “Cheaper costs due to manufacturing overcapacity from the electric vehicle market and better system designs are transforming the economics for large energy storage projects,” Vasdev said. He added that the levelized cost of electricity for a four-hour system is now below $100/MWh in six markets.

Thermal generation costs also increased. The global LCOE for new combined-cycle gas turbine plants rose 16% to $102/MWh, the highest level on record, driven by higher equipment costs and strong turbine demand linked to rapid data-center expansion.

Despite recent cost increases, BNEF expects clean-energy technologies to become significantly cheaper over the next decade. By 2035, the firm forecasts LCOE reductions of 30% for solar, 25% for battery storage, 23% for onshore wind and 20% for offshore wind.

According to BNEF, these trends indicate that renewables paired with storage are increasingly becoming the most cost-effective sources of firm and flexible power in many global markets.