Renewable Energy Costs Continue to Decline, Outpacing Fossil Fuels Worldwide
The cost of clean energy technologies, including wind, solar, and battery storage, is projected to fall by another 2-11% in 2024, according to a new report by BloombergNEF (BNEF). This decline would surpass last year’s record-breaking reductions, further solidifying renewables as the most cost-effective source of electricity in most markets worldwide.
Wind and Solar Outcompeting Fossil Fuels
BNEF’s findings reveal that new wind and solar farms are already more cost-effective than coal and gas plants in nearly every global market. As clean energy continues to gain economic competitiveness, traditional fossil fuel infrastructure is increasingly being undercut on production costs and long-term viability.
However, China’s dominance in clean technology manufacturing has triggered concerns about market disruptions and protectionism. Many countries have responded by implementing import tariffs to protect domestic industries from an influx of low-cost Chinese solar modules and battery storage systems. While these trade measures may temporarily slow price reductions, BNEF still forecasts a 22-49% decline in the levelized cost of electricity (LCOE) for clean energy technologies by 2035.
Battery Storage Prices Plunge Amid EV Market Slowdown
One of the most notable shifts in 2024 has been the rapid decline in battery storage costs. BNEF reports that the global benchmark cost for battery storage projects has fallen by a third, reaching $104 per megawatt-hour (MWh).
This price drop is largely attributed to slower-than-expected electric vehicle (EV) sales, which have created an oversupply of battery packs, thereby driving down storage costs. With battery prices continuing to decline, the industry is on track to reach sub-$100/MWh storage costs in 2025—a key milestone in making batteries a viable alternative to traditional grid infrastructure.
Solar Industry Faces Overcapacity, but Costs Keep Falling
Despite trade tensions and supply chain overcapacity, the cost of utility-scale solar has also continued its downward trajectory. In 2023, the cost of a fixed-axis solar farm fell 21% globally, and the report suggests that solar module prices will remain low throughout 2025 due to oversupply.
Lead author of the report, Amar Vasdev, emphasized that solar is closing in on the cost of new U.S. gas plants—even without subsidies:
“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 liquefied natural gas and exposes its protected gas market to global price competition.”
The Future of Renewable Energy Economics
Looking ahead, BNEF expects wind and solar power generation costs to decline further in 2025, with global benchmarks for:
✔ Battery storage costs falling below $100/MWh
✔ Wind energy costs dropping by another 4%
✔ Solar power becoming 2% cheaper worldwide
With continued advancements in clean energy technology, falling costs, and growing market adoption, renewables are on track to fully outcompete fossil fuels—not just on sustainability, but on price as well.
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