What's Happening?
The International Renewable Energy Agency (IRENA) has reported a significant decline in the cost of fully installed battery storage projects, which fell by 93% from 2010 to 2024. This reduction, from USD
2,571/kWh to USD 192/kWh, has made battery storage a standard component for factories and large buildings, facilitating predictable savings. The global renewable capacity additions reached 582 GW in 2024, increasing the need for flexibility to manage variable solar and wind output. Additionally, battery storage deployment in 2023 more than doubled year-on-year, with 42 GW of battery storage capacity added globally across utility-scale and behind-the-meter applications.
Why It's Important?
The dramatic reduction in battery storage costs is crucial for the expansion of renewable energy, as it addresses one of the main challenges of renewable sources: variability. By making storage more affordable, it allows for better integration of solar and wind energy into the grid, ensuring a more stable and reliable power supply. This development is particularly significant for the U.S., where utility-scale battery storage grew rapidly, with 10.3 GW of new capacity added in 2024. The trend is expected to continue, with an anticipated 18.2 GW of utility-scale additions in 2025. This growth supports the transition to a more sustainable energy system and helps meet climate goals.
What's Next?
The continued decline in battery storage costs is likely to drive further investment in renewable energy projects. As storage becomes a more common feature in energy systems, it will enable greater adoption of renewables, reduce reliance on fossil fuels, and contribute to achieving net-zero emissions targets. The U.S. Department of Energy's initiatives, such as the Long-Duration Storage Shot, aim to further reduce costs and expand the use of storage technologies, potentially leading to new applications and increased resilience of the power grid.
