The cost of generating electricity from renewable sources will continue to fall in 2025, with projected reductions of between 2% and 11% for technologies such as solar, wind, and battery storage, according to the latest report from BloombergNEF (BNEF). This decline in prices means that new renewable energy projects are now more cost-competitive than new coal and gas plants in nearly every global market.

However, while China leads global clean technology manufacturing and drives prices to historic lows, governments in other countries are imposing trade barriers to protect their domestic industries. These measures could temporarily slow price reductions, but the long-term trend remains positive: BNEF estimates that the levelized cost of electricity (LCOE) for clean technologies will drop between 22% and 49% by 2035.

Battery storage approaches the $100/MWh threshold

The BNEF report reveals that the global benchmark cost for battery storage projects fell by 33% in 2024, reaching $104 per megawatt-hour (MWh). This decline is largely due to a slowdown in electric vehicle (EV) sales, which led to an oversupply of battery packs and subsequent price reductions.

In 2025, battery storage costs are expected to fall below $100/MWh, making batteries even more viable for grid stabilisation and renewable energy integration.

According to Amar Vasdev, lead author of the report: “New solar plants, even without subsidies, are now almost on par with new gas plants in the United States. This is remarkable because US gas prices are only a quarter of those in Europe and Asia.”

China’s manufacturing overcapacity cuts costs but sparks trade tensions

China has played a pivotal role in driving down renewable energy costs. According to BNEF, the country can produce electricity from clean technologies at 11% to 64% lower costs than other markets.

For example, the cost of generating wind power in China is 24% cheaper than the global benchmark of $38/MWh. However, while wind turbine prices have been falling in China, they have been rising in other markets since 2020.

In response, many economies have begun imposing tariffs and trade barriers to protect their local industries. Matthias Kimmel, Head of Energy Economics at BNEF, warns: “China is exporting green energy technology at such low prices that the rest of the world is considering erecting barriers to protect their industries. But the overall trend of cost reduction is so strong that no one, not even President Trump, will be able to stop it.”

Looking ahead to 2035: An unstoppable cost decline

BNEF’s Levelised Cost of Electricity report, considered the industry’s gold standard, forecasts that by 2035, renewable energy costs will continue to drop significantly:

• Onshore wind: -26%
• Offshore wind: -22%
• Fixed-axis solar PV: -31%
• Battery storage: -49%

With these figures, the renewables sector will further solidify its position as the most competitive energy source, accelerating the transition to cleaner and more efficient power systems.

As costs continue to decline, the question is no longer if renewables will dominate the global energy market but how quickly they will do so.

The year 2025 will mark another milestone in the declining cost of renewable energy, driven primarily by China and technological advances in batteries, wind, and solar power. While some markets may attempt to slow this trend through protectionist policies, BloombergNEF’s projections indicate that the cost reduction in clean energy is unstoppable.

In the long term, renewable energy will continue to outperform fossil fuels, reshaping the global energy landscape and cementing itself as the most economical and environmentally sustainable option.