The global levelised cost of electricity (LCOE) for renewable energy reached record lows in 2025, with single-axis tracker solar photovoltaic (PV) systems achieving the world’s lowest regional price of US$37 per megawatt-hour (MWh) (€35/MWh) in the Middle East and Africa, research firm Wood Mackenzie said in a new report.
Solar PV continues to lead as the most cost-competitive source of power generation worldwide, supported by improvements in module efficiency and stabilising supply chains, according to the analysis.
“Across all regions, renewable technologies demonstrate clear cost advantages over conventional generation,” said Ahmed Jameel Abdullah, senior research analyst at Wood Mackenzie. “We expect continued cost reductions through technological improvements, supply chain optimisation and economies of scale, reinforcing renewables’ position as the dominant power generation technology globally.”
In the Asia Pacific region, solar PV delivers generation costs as low as US$27/MWh in China, while onshore wind ranges between US$25 and US$70/MWh across China, India and Vietnam. Falling battery prices are driving the rise of hybrid solar-plus-storage projects in Australia and India, while China continues to record the world’s lowest energy storage costs.
In Europe, the average renewable LCOE declined 7% this year, following an 8% reduction in capital costs compared with the 2020–2024 average. Utility-scale solar projects using single-axis tracking now provide the lowest average cost, and onshore wind LCOE is projected to fall by a further 16% to US$56.7/MWh by 2030.
North American markets remain competitive for both solar and wind power, despite tariff pressures and the gradual phase-down of tax incentives. In Latin America, renewable LCOE dropped 23% between 2020 and 2024, with Brazil, Chile and Mexico leading the region’s cost reductions.
Across the Middle East and Africa, single-axis solar PV continues to outperform wind, with prices expected to fall further to around US$17/MWh by 2060, Wood Mackenzie said.
“The global energy transition is accelerating at an unprecedented pace,” Abdullah added. “Renewable technologies are achieving cost parity with conventional generation across all major markets. Our LCOE 2025 analysis reveals that solar PV and onshore wind have become the dominant low-cost options worldwide, whilst hybrid systems and battery storage are rapidly closing the competitiveness gap.”
