Clean power tech costs to fall to record lows in 2025 says BloombergNEF

Clean power technology costs for wind, solar and battery technologies are expected to fall further by 2-11% in 2025, breaking last year’s record, according to a report by research provider BloombergNEF (BNEF).

According to BNEF’s Levelized Cost of Electricity report, the global benchmark cost for battery storage projects fell by a third in 2024 to $104 per megawatt-hour (MWh), as a glut 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.

Undercut costs

BNEF’s report comes as renewable technologies are already undercutting the costs of new coal and gas plants on production costs globally.

According to the IEA’s 2024 report, Strategies for Affordable and Fair Clean Energy Transitions, in many cases, clean energy technologies are already more cost competitive over their lifespans than those reliant on conventional fuels like coal, natural gas and oil. Solar PV and wind, says the Agency, are the cheapest options for new generation.

Commenting in a release was Amar Vasdev, lead author of the report: “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.”

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China and tariffs

In a release, BNEF adds that, despite the promising figures, trade barriers still abound, particularly in response to China, whose clean tech manufacturing overcapacity has led to rising protectionism.

This protectionism comes in the form of import tariffs by countries to avoid cheap imports upending their own energy markets.

Said Matthias Kimmel, head of Energy Economics at BNEF: “China is exporting green energy tech 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.”

According to BNEF, although such trade barriers could temporarily stall cost declines, the company still expects the levelised cost of electricity for clean technologies to fall 22-49% by 2035.

China’s abundance of clean-tech 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 megawatt-hour 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 $38 per megawatt-hour. 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 PV and almost 50% for battery storage.