🔋 Battery storage has become cheap enough for solar power to be delivered around the clock

• The cost of large-scale battery storage fell by 40 percent in 2024 and continues to drop in 2025.
• Storing solar power for use at night now costs 65 dollars per megawatt-hour, making it possible to deliver solar power around the clock for 76 dollars per megawatt-hour.
• Over the past decade, battery costs have fallen by an average of 20 percent per year while deployment has increased by 80 percent per year.

Solar power no longer needs to be "unreliable daytime electricity"

Solar power has long been the cheapest form of electricity production, but with one limitation: it is only produced when the sun shines. That limitation is now disappearing.

A new report from the energy analysis organization Ember shows that the cost of storing electricity in large battery systems has fallen to 65 dollars per megawatt-hour. This is the cost of shifting electricity in time, that is, storing electricity produced during the day and using it in the evening or at night.

If roughly half of the day's solar power is stored for use at night, 33 dollars per megawatt-hour is added to the electricity cost. With a global average price for solar power of 43 dollars per megawatt-hour, the total cost of solar power that can be delivered when needed becomes 76 dollars per megawatt-hour. In many parts of the world, this is cheaper than new fossil power, especially gas.

Smoothing out the day, not the year

This does not mean that solar with batteries can automatically replace all electricity production year-round. Delivering constant power every hour of the year, including cloudy weeks and seasonal lows, requires oversizing solar capacity and more battery storage.

But shifting half of the day's solar power to evening and nighttime is a crucial step. It aligns solar production more closely with a typical demand profile. Solar power can thereby cover a significantly larger share of evening and nighttime demand and increase its contribution to the power mix.

In regions with very cheap desert solar, it becomes even more attractive to oversize solar installations and store a larger share of production.

A major system change

This is not a theoretical future projection. The figures come from completed auctions and real projects in Saudi Arabia, India and Italy in 2025. The total investment cost for a large battery storage project is now around 125 dollars per kilowatt-hour. Just a few years ago, corresponding costs were several times higher.

The price drop is so significant that it fundamentally changes the calculation for electricity production. Solar power can now contribute far more to evening and nighttime needs, not just to lunchtime dips in electricity prices. Power systems can be built with less dependence on fossil backup power. Batteries can be installed significantly faster than traditional power plants.

For countries with rapidly growing electricity demand and good solar irradiation, the combination of solar and battery is now often the cheapest and fastest option. According to the IEA's World Energy Outlook, 80 percent of global energy demand growth over the coming decade will come from precisely such regions.

Storage costs are falling faster than battery prices

Battery prices have fallen sharply in recent years, but storage costs have fallen even faster. This is because today's batteries perform significantly better than earlier generations.

Three performance improvements have together reduced storage costs by 35 percent, from 100 dollars to 65 dollars per megawatt-hour, before even accounting for falling battery prices.

Longer lifetime accounts for the largest improvement. Modern lithium iron phosphate batteries have a lifetime of 20 years, compared to about 10 years for older models. This alone reduces storage costs by 20 dollars per megawatt-hour.

Higher efficiency also contributes. Older models had an efficiency of around 85 percent, compared to 90 percent today. This saves an additional 5 dollars per megawatt-hour.

Lower project risk has reduced financing costs. Safety has improved and reduced practical risks such as fire. Additionally, revenue models have shifted from uncertain market revenues to auction-based contracts. Lowering the cost of capital from 10 to 7 percent saves 10 dollars per megawatt-hour.

Together, these improvements, not just cheaper equipment, explain why storage costs have fallen so dramatically.

A decade of price drops

Over the past ten years, installed costs for battery storage have fallen by an average of 20 percent per year. At the same time, deployment has increased by about 80 percent per year.

The cost of core equipment for battery storage fell by 40 percent in 2024 according to BloombergNEF. In 2025, prices have continued to fall. The price of lithium iron phosphate cells has reached around 40 dollars per kilowatt-hour on the Chinese market in November 2025.

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