How cheap is battery storage?

As of October 2025, the all-in capex for large, long-duration utility-scale BESS projects outside China and the US is approximately $125/kWh, resulting in a Levelised Cost of Storage (LCOS) of $65/MWh. This cost reduction is driven by cheaper Chinese-manufactured equipment, longer battery lifetimes, and improved efficiencies. Consequently, dispatchable solar—storing 50% of daily generation—is estimated to cost $76/MWh, making it a highly competitive option for meeting global energy demand growth.

• The total all-in capex for a large, long-duration (4 hours or more) utility-scale BESS project outside China and the US is approximately $125/kWh. This is split between core equipment shipped from China at around $75/kWh and installation and grid connection costs of around $50/kWh.
• The Levelised Cost of Storage (LCOS) for shifting one MWh of electricity from daytime to night-time is $65/MWh. This figure is based on assumptions including a 20-year lifetime, a 7% discount rate, 90% round-trip efficiency, an 80% utilisation rate, 2% annual degradation, and 2% annual operational costs.
• The decline in LCOS to $65/MWh is attributed not only to lower equipment costs but also to performance improvements: extending battery lifetimes from 10 to 20 years reduces LCOS by $20/MWh, increasing efficiency from 85% to 90% saves $5/MWh, and reducing the cost of capital from 10% to 7% saves $10/MWh.
• Combining a $65/MWh LCOS with a 2024 global average solar price of $43/MWh means that creating dispatchable solar by storing 50% of daily generation adds $33/MWh, resulting in a total cost of $76/MWh.
• Real-world evidence from 2025 auctions supports the $125/kWh capex estimate: Saudi Arabian projects (Tabuk and Hail) were priced around $120/kWh, and Italy's MACSE tender also corresponds to approximately $120/kWh. Indian auctions showed prices around $120/kWh, though some were lower due to a CAPEX subsidy of 1.8 million INR/MWh.
• Core equipment costs for BESS are lowest for projects with a duration of four hours or more, as components sized to power (MW) rather than energy (MWh) spread costs over more hours, making these projects 10–15% cheaper than smaller ones.

APA

Rangelova, K., & Jones, D. (2025). How cheap is battery storage? Ember. https://ember-energy.org/app/uploads/2025/12/How-cheap-is-battery-storage.pdf

Chicago

Rangelova, Kostantsa, and Dave Jones. How cheap is battery storage? Ember, 2025. https://ember-energy.org/app/uploads/2025/12/How-cheap-is-battery-storage.pdf.

Wikipedia

{{cite report |last1=Rangelova |first1=Kostantsa |last2=Jones |first2=Dave |title=How cheap is battery storage? |publisher=Ember |date=11 December 2025 |url=https://ember-energy.org/app/uploads/2025/12/How-cheap-is-battery-storage.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rangelova2025how, author = {Rangelova, Kostantsa and Jones, Dave}, title = {{How cheap is battery storage?}}, institution = {Ember}, year = {2025}, month = dec, url = {https://ember-energy.org/app/uploads/2025/12/How-cheap-is-battery-storage.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }