The intermittent nature of renewable energy has long posed challenges for modern power systems. Solar panels can only generate electricity during the day, while wind turbines rely on favorable weather conditions. As renewables account for a growing share of the global electricity mix, one critical question emerges: how can we ensure that clean power is available at all times? The answer increasingly lies in battery energy storage systems (BESS), a technology whose costs have declined dramatically, making renewable energy more competitive than ever against fossil fuels.
The decline in battery costs has been nothing short of transformative. In 2010, fully installed battery storage projects averaged around USD 2,571 per kilowatt-hour (kWh). By 2024, that figure had dropped to USD 192/kWh, representing a 93% reduction in just over a decade. Several factors explain this trend:
This downward trend has shifted storage from a niche technology to a central pillar of modern energy systems.
The affordability of storage has expanded the range of applications for both utilities and consumers:
Energy shifting has become the leading application of storage. By 2024, it accounted for 67% of new capacity additions, reflecting the growing importance of storing renewable energy during periods of excess production and releasing it when needed.
Lithium-ion batteries dominate the market, but within this segment, lithium iron phosphate (LFP) chemistries have gained momentum. LFP’s market share rose from 48% in 2021 to 85% in 2024, thanks to lower costs, longer cycle life, and improved safety. This shift underscores how chemistry innovation further enhances the value proposition of storage.
With these advances, the combined cost of renewable energy generation plus storage is increasingly competitive with conventional fossil fuel power. This trend strengthens the business case for renewable integration, allowing renewables to meet baseload demand more reliably.
While falling costs are promising, challenges remain:
Battery energy storage systems have reached a turning point. What was once prohibitively expensive has now become a cornerstone of the clean energy transition. The 93% drop in costs since 2010 has accelerated the adoption of renewables, making them not only environmentally sound but also economically competitive. Yet, scaling deployment will require continued innovation, supportive policies, and resilient supply chains.
As renewable energy grows, storage will be the technology that ensures reliability, resilience, and flexibility. Affordable storage makes it possible for solar and wind power to supply electricity around the clock, closing the gap with fossil fuels and bringing the vision of a net zero future within reach
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