Battery storage costs have fallen to record lows, making solar power available around the clock for the first time at competitive prices. A new report released December 11 by energy think tank Ember shows utility-scale battery storage now costs just $65 per megawatt hour outside China and the United States.
The dramatic price fall means solar power can now be stored during the day and released at night without breaking the bank. This shifts solar from a daytime-only energy source to reliable electricity that works any time.
“After a 40 per cent fall in 2024 in battery equipment costs, it’s clear we’re on track for another major fall in 2025,” said Kostantsa Rangelova, Global Electricity Analyst at Ember. “The economics for batteries are unrecognisable, and the industry is only just getting to grips with this new paradigm.”
How Low Have Prices Actually Gone?
The Ember report draws on recent auctions in Italy, Saudi Arabia and India, along with interviews with developers across global markets. The findings show the total capital cost of building long-duration battery storage has dropped to $125 per kilowatt hour.
That figure breaks down to roughly $75 per kilowatt hour for core equipment shipped from China and $50 per kilowatt hour for installation and grid connection. These prices apply to large utility-scale projects that store energy for four hours or longer.
Recent auction results back up these numbers. Saudi Arabia’s Tabuk and Hail projects awarded equipment contracts in August 2025 for $73 to $75 per kilowatt hour. Italy’s MACSE tender in October 2025 suggests similar all-in project costs of around $120 per kilowatt hour. India’s 2025 auctions show comparable prices with additional support from domestic subsidies.
The price of lithium iron phosphate battery cells for stationary energy storage dropped to around $40 per kilowatt hour in Chinese domestic markets as of November 2025. These cells get integrated into 20-foot containers that house five to six megawatt hours of storage capacity.
What This Means for Electricity Bills
The storage cost of $65 per megawatt hour applies to shifting electricity from one time to another. For solar power, this means moving daytime generation to evening and nighttime hours when people actually need it most.
If half of a solar farm’s daily output gets stored for nighttime use, the storage adds about $33 per megawatt hour to the total cost. The global average price of solar power in 2024 stood at $43 per megawatt hour according to IRENA. Adding storage brings the total to $76 per megawatt hour for solar power available on demand.
“Solar is no longer just cheap daytime electricity; now it’s anytime dispatchable electricity,” Rangelova said. “This is a game-changer for countries with fast-growing demand and strong solar resources.”
That $76 per megawatt hour price point undercuts new natural gas plants in many markets, especially countries that rely on expensive liquefied natural gas imports. The cost comparison makes solar plus storage the cheapest option for meeting growing electricity demand in much of the world.
Technology Improvements Speed the Transition
Lower battery prices tell only part of the story. Modern batteries perform far better than earlier generations, which amplifies the cost advantages.
Today’s lithium iron phosphate batteries last 20 years compared to roughly 10 years for older models. This extended lifetime alone cuts storage costs by $20 per megawatt hour. Current batteries also operate at 90 percent efficiency compared to 85 percent for older systems, saving another $5 per megawatt hour.
Improved safety and shift toward guaranteed revenue contracts through auctions have reduced project risk. This allows developers to secure financing at lower interest rates. Dropping the cost of capital from 10 percent to 7 percent saves $10 per megawatt hour on storage costs.
These performance gains combine with falling equipment prices to drive storage costs down faster than battery prices alone would suggest. The levelised cost of storage has dropped by over one third in recent years even before accounting for cheaper batteries.
Where the Market Goes Next
Battery manufacturing capacity already exceeds demand by a factor of three as of 2024. This oversupply creates fierce competition among manufacturers and continues to push prices down.
The International Energy Agency projects that 80 percent of global energy demand growth over the next decade will come from regions with high-quality solar radiation. Most of this growth represents electricity demand as countries electrify transportation, heating and industry.
Countries can import battery equipment now while building domestic manufacturing capacity over time. Even when core equipment comes from abroad, roughly 40 percent of total project value remains local through engineering, construction, grid connection and other work.
The technology itself keeps improving. Most grid-scale batteries now use lithium iron phosphate chemistry with no nickel or cobalt. Manufacturers have begun shifting toward sodium-ion batteries that also eliminate lithium, removing all critical minerals from the battery.
Impact on Energy Planning Worldwide
The plummeting storage costs reshape how countries can meet growing electricity demand. Nations with strong solar resources can now plan power systems around solar and batteries rather than fossil fuels.
This matters most in regions where electricity demand is growing fastest. Countries across Asia, Africa, the Middle East and Latin America can leapfrog older power plant technologies and build clean energy systems from the start.
Saudi Arabia, traditionally an oil producer, is now building some of the world’s cheapest battery storage projects. The kingdom awarded contracts for battery equipment at $73 to $75 per kilowatt hour, among the lowest prices globally.
India concluded multiple battery storage auctions in 2025 at competitive prices. The country provides capital subsidies of about $20 per kilowatt hour to support domestic storage deployment. Even with subsidies factored out, Indian projects show storage costs near $120 per kilowatt hour.
Italy’s October 2025 auction cleared at 13 euros per kilowatt hour per year. This price level indicates project costs around $120 per kilowatt hour and demonstrates that competitive storage economics extend beyond emerging markets into Europe.
The Speed of Change Surprises Industry
The battery storage industry has seen costs fall by 20 percent per year on average over the past decade while deployment increased by roughly 80 percent annually. But the pace of decline accelerated sharply in 2024.
Core battery equipment costs dropped 40 percent in 2024 compared to 2023 according to BloombergNEF. Industry experts interviewed by Ember expect another major decline in 2025, though they did not quantify the exact percentage.
Installation costs also continue falling as battery systems become more standardized. Integrating components like power conversion systems directly into AC blocks has simplified deployment and reduced project risk.
The report notes that battery storage now delivers multiple value streams beyond just shifting energy in time. Batteries provide grid services including frequency control, voltage support and emergency backup power. These services create additional revenue that further improves project economics.
The confluence of falling costs, improving performance and growing demand positions solar plus storage as the backbone of future power systems in much of the world. The shift from daytime-only solar to round-the-clock dispatchable power fundamentally changes how countries can meet their energy needs.
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