The plunging cost of battery storage is making its mark across the globe. It has had a huge impact in Australia, where grid scale battery storage is now regarded as the glue that will keep a renewables dominated grid together.
The federal government’s rebate for household batteries has proved so popular that the government is now considering changes because the allocated budget will likely be exhausted.
Across the world, according to BNEF, the cost of grid scale battery packs has fallen another 45 per cent in 2025 following a 40 per cent fall in 2024. The UK-based energy think tank Ember has now also reached the same conclusion, underlying its unexpected impact on solar power.
“Cheap batteries do not just complement solar, they unlock its full potential,” says Kostantsa Rangelova, a global electricity analyst at Ember. “Solar is no longer just cheap daytime electricity, now it’s anytime dispatchable electricity.” And it’s competitive.
The changes have been so dramatic, and so rapid, that countries are still digesting its implications, and its possibilities. “The economics for batteries are unrecognisable, and the industry is only just getting to grips with this new paradigm,” Rangelova said.
Even in Australia, where the solar resource is as good as any in the world, the idea of solar and batteries as a competitive source of power in the evening demand peaks seemed wild just a few years ago.
Now, it has became the main focus of new generation projects. The first solar-battery hybrid is operating in Western Australia, pushing solar power into the evening peaks and through the night, and dozens of bigger projects are now under construction or about to be built.
Households are discovering the same benefits, with most getting scant reward for solar exports in the middle of the day, but now able to store that output for their evening and overnight consumption.
And it has resulted in a significant change in market forecasts, with the Australian Energy Market Operator now acknowledging in its multi-decade planning blueprint that more solar and batteries will come into the grid, and less wind and gas capacity will be needed.
It has an even bigger impact for other countries, particularly those who are less developed and are experiencing rapid demand growth as they industrialise. Ember, and others, say that solar – backed by batteries – will become the dominant source of electricity across the globe.
“This gives countries more options for planning reliable clean electricity. Together, solar and batteries offer a scalable, secure and affordable foundation for much of the world’s future power system,” it says.
Ember’s cost estimates are similar to BNEF’s, setting the pack price of grid scale battery packs at around US75/MWh. That is a global average price that excludes China and the US because the former is so cheap and the latter is so expensive due to their respective government policies and labour costs.
The Ember analysis – drawn on the latest, real-world evidence from recent auctions in Italy, Saudi Arabia and India, as well as interviews with active developers across global markets – shows that after a particularly steep drop in 2024, costs have seen further large falls this year.
The research assesses the cost of a full battery storage system connected to the grid as only $US125/KWh as of October 2025. This is for long-duration (four hours or more) utility-scale battery projects in global markets outside China and the US.
Core battery equipment delivered from China now costs around 75 $/kWh, while installation and grid connection typically add about 50 $/kWh. A reminder that these are global averages.
This has pushed down the price of storing electricity. The Levelised Cost of Storage (LCOS) is assessed at just $65/MWh, based on the $125/KWh capital cost and real world project assumptions of financing costs, lifetime, efficiency and degradation.
The low LCOS is not only the result of cheaper batteries – longer lifetimes, higher efficiencies and lower financing costs supported by clearer revenue models like auctions have all helped to push the LCOS down sharply.
This matters, Ember says, because it changes how solar can be used. The global average price of solar in 2024 was $US43/MWh. If half of daytime solar generation is shifted to the night, then the 65 $/MWh storage cost adds about 33 $/MWh to the total cost of solar, taking it to a total dispatchable electricity cost of $76/MWh.
“Solar is no longer just cheap daytime electricity, now it’s anytime dispatchable electricity. This is a game-changer for countries with fast-growing demand and strong solar resources,” Rangelova added.
The Ember report goes into some detail about the costs of battery storage, noting that the price of lithium iron phosphate (LFP) battery cells for stationary energy storage applications has dropped to around $US40/kWh in Chinese domestic markets as of November 2025.
These cells are further integrated into battery enclosures, which house 5-6 MWh of cells in 20-foot containers. The enclosures account for close to 90% of the $75/kWh core equipment cost for long duration projects, with PCS and EMS costs making up around 10%.
It says the $75/kWh applies to larger, four-hour or longer BESS projects, and smaller projects may not get such competitive quotes from Chinese manufacturers.
“Additionally, total equipment costs are 10–15% cheaper for four-hour projects because several components are sized to power (MW) rather than energy (MWh), meaning the cost is spread over more storage hours,” it says. “Beyond four hours, however, the marginal savings become progressively smaller.”
The EPC services and grid connection required to turn this equipment into an operational project can vary widely, but typically costs around $50 /kWh. This assumes land is provided by a tendering utility or purchased at a low cost.
The largest variation in costs comes mainly from the grid connection fee. This results in costs ranging from as little as $US30/kWh with inexpensive grid connection to $US100/kWh in extreme cases, but when the battery storage is built at an existing solar plant or installed behind the meter, the grid connection cost becomes negligible.
Ember has developed a live calculator that allows users to work out the LCOS using their own assumptions.
