The cost of clean power technologies such as wind, solar, and battery storage is expected to drop by an additional 2-11% in 2024, surpassing the record declines seen in previous years, according to a new report from BloombergNEF (BNEF).
The report suggests that new wind and solar farms are now undercutting the production costs of new coal and gas plants in nearly every global market. However, BNEF notes that China’s manufacturing overcapacity in clean technologies has prompted trade protectionism, as countries impose import tariffs to safeguard their own energy sectors.
Despite the risk of temporary cost increases due to trade barriers, BNEF forecasts that the levelised cost of electricity for clean energy technologies will decline by 22-49% by 2035.
Amar Vasdev, lead author of the report, explained: “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.”
In 2024, the global benchmark cost for battery storage projects fell by a third to $104 per megawatt-hour (MWh), as an oversupply linked to slower electric vehicle sales led to a reduction in battery pack prices. The cost of fixed-axis solar farms dropped by 21%, with modules being sold at or below production costs.
Looking ahead, BNEF expects battery storage costs to dip below $100/MWh in 2025, while global benchmarks for wind and solar generation are predicted to fall by 4% and 2%, respectively.
Vasdev also pointed out that solar could become an even more attractive energy source in the coming years, particularly if the U.S. begins exporting liquefied natural gas, thus exposing its gas market to global price competition.
