Key facts
- Battery storage station construction costs have fallen below gas-fired power plants for the first time.
- Battery prices decreased 40% in 2025, while gas plant turbine costs increased.
- Overall BESS costs have fallen 73% since 2018, and solar PV costs by 45%.
- Ember estimates solar + BESS dispatchable costs at $76/MWh, comparable to new gas plants.
- Nighttime solar + BESS costs are estimated at $108/MWh, exceeding typical gas plant LCOE.
Construction and other costs for battery storage stations have fallen below those of gas-fired power plants for the first time. This shift is attributed to a 40% decrease in battery prices in 2025, driven by overproduction in China and a pivot away from electric vehicles, coupled with a supply crunch for gas plant turbines that has increased their costs.
Battery energy storage system (BESS) costs have seen a significant decline, falling by 73% between 2018 and 2024, while solar photovoltaic (PV) costs dropped by 45% in the same period. This makes solar combined with BESS increasingly competitive with traditional power plants.
Energy think tank Ember estimates that the dispatchable cost of solar plus BESS is US$76 per MWh, making it cost-competitive with new gas-fired generation. However, this figure is an energy-weighted average. When considering nighttime electricity supply, which relies solely on stored energy, the cost rises to an estimated US$108/MWh. This nighttime cost exceeds the typical levelized cost of energy (LCOE) for new gas-fired combined-cycle plants, which is around US$69/MWh. Even when including the social cost of carbon, the total cost for gas generation rises to approximately US$93/MWh, still below the nighttime solar + BESS cost.
Time-shifting solar power is not yet economic in many locations, even in island systems with optimal solar resources and high diesel generation costs. For instance, a project in Saint Kitts and Nevis found that scaling storage for 24/7 service would have increased costs above fuel-based alternatives, with battery designs focused on ancillary services delivering greater system value than those primarily for energy shifting.