- The cost of large scale battery storage has fallen to a level that makes solar power reliably available day and night at a price that can compete with fossil fuels, according to a new report by energy think tank Ember.
Drawing on recent auctions in Saudi Arabia Italy and India as well as interviews with developers and analysts across global markets the report finds that utility scale battery energy storage systems now cost about 125 dollars per kilowatt hour to build as of October 2025. This figure applies to long duration projects of four hours or more and excludes China and the United States where costs remain higher.
At this price the levelised cost of storage the cost of shifting electricity from one time of day to another falls to around 65 dollars per megawatt hour. Ember says this marks a turning point for the power sector as batteries are now cheap enough to turn solar energy into dispatchable electricity that can be used when demand is highest including during the evening and night.
The analysis shows that storing half of a day’s solar generation overnight would add just US$ 33 per megawatt hour to the cost of solar power. With the global average price of solar at US$ 43 dollars per megawatt hour in 2024 this would bring the total cost of dispatchable solar to about 76 dollars per megawatt hour. That is cheaper than building new gas power plants in many regions especially those dependent on imported fuel.
Ember attributes the sharp fall in costs to a combination of cheaper battery equipment longer lifetimes higher efficiency and lower financing costs driven by clearer revenue models such as government backed auctions. Lithium iron phosphate batteries now typically have a design life of 20 years with high performance guarantees and round trip efficiencies of around 90 percent.
Core battery equipment sourced from China accounts for about US$ 75 dollars per kilowatt hour of the total cost while installation and grid connection add around 50 dollars per kilowatt hour. Recent auctions provide strong evidence for these figures including projects in Saudi Arabia priced close to 120 dollars per kilowatt hour and Italian and Indian tenders that imply similar or even lower costs once subsidies are taken into account.
Battery equipment prices fell by around 40 percent in 2024 and Ember says there is strong evidence of further significant declines in 2025 driven by manufacturing scale up intense competition and global oversupply. Over the past decade installed battery costs have fallen by around 20 percent per year on average.
The report argues that cheap storage fundamentally changes the role of solar power. Rather than being limited to daytime generation solar can now meet a much larger share of evening and night time demand without the need for fossil fuel backup. While this does not yet deliver constant power in all seasons it is enough to align solar generation far more closely with real world demand.
This shift is particularly important for regions where most future electricity demand growth is expected and where solar resources are strong. Ember says combining solar with storage is now the fastest cheapest and most secure way for many countries to meet rising demand reduce emissions and cut reliance on imported fuels.
With battery manufacturing capacity expanding rapidly and new technologies such as sodium ion batteries emerging the report concludes that solar and storage together are set to play a central role in meeting global energy demand growth over the next decade.
Link to the full report HERE
Author: Bryan Groenendaal
