An analysis by BloombergNEF shows that the levelized cost of electricity (LCOE) of a typical solid axis solar farm increased 6% year-over-year to $39/MWh by 2025, but innovation and competition are expected to reduce costs by 30% through 2035.
The levelized cost of electricity (LCOE) from solar energy will fall by 30% by 2035, an analysis by BloombergNEF.
The analyst’s Levelized Cost of Electricity 2026 report says that while benchmark solar costs are all set to rise by 2025, due to a combination of supply chain constraints, poorer resource availability and market reforms in China, innovation and competition will lead to falling costs over the next decade.
According to Bloomberg data, the global benchmark LCOE for a typical solid axis solar farm rose 6% year-over-year to $39/MWh in 2025. At the start of the decade, solid axis solar had a global benchmark LCOE of just over $60/MWh. Current costs are comparable to an LCOE of $40/MWh for onshore wind and $100/MWh for offshore wind.
The latest analysis from Bloomberg adds that while most clean energy technologies became more expensive last year, the cost of battery storage projects fell to a new low.
The global benchmark LCOE for a four-hour battery project fell 27% year-on-year to $78/MWh, a record low since BNEF started tracking costs in 2009. At the start of the decade, the global benchmark LCOE for these projects was over $180/MWh, and was still above $100/MWh in 2024.
The decline in LCOE for battery projects last year was attributed to lower packaging prices, increasing competition between manufacturers and improved system designs. BNEF expects battery storage LCOE to decline by a further 25% over the next decade.
Bloomberg also found that developers added 87 GW of combined solar and storage last year, providing power at an average LCOE of $57/MWh.
“As costs continue to fall, we expect battery storage to strengthen solar project revenues, support broader deployment of renewable energy and accelerate the shift to storage-driven system balancing versus fossil fuel-based peak capacity,” said Amar Vasdev, lead author of the report.
Last month, an international research team discovered that Capex-driven strategies can help with this reduce solar LCOE by 20%.
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