Solar with battery storage undercuts fossil fuel power costs

Wednesday 06 May 2026 - 16:20

By: Dakir Madiha

Solar with battery storage undercuts fossil fuel power costs

Solar and wind energy combined with battery storage can now deliver continuous electricity at a lower cost than fossil fuels in regions with strong natural resources, according to a new report by International Renewable Energy Agency. The findings come as global energy markets face sustained pressure, accelerating demand for reliable and cleaner alternatives.

The report, titled 24 7 renewables the economics of firm solar and wind, shows that the levelized cost of firm solar power ranges between 54 and 82 dollars per megawatt hour in high quality locations. This compares with 70 to 85 dollars per megawatt hour for new coal plants in China and more than 100 dollars per megawatt hour for natural gas globally. The data confirms a structural shift in the cost competitiveness of renewable energy.

The transformation is driven by a sharp decline in technology costs. Since 2010, solar photovoltaic installation costs have dropped by 87 percent, while onshore wind costs have fallen by 55 percent. Battery storage has seen the steepest decline, with costs down by 93 percent. Projections indicate a further 30 percent reduction by 2030, potentially pushing firm renewable electricity below 50 dollars per megawatt hour in optimal conditions.

Francesco La Camera stated that the long standing argument about the unreliability of renewables no longer holds. He said renewable systems can now provide stable electricity around the clock. António Guterres described the findings as evidence that a different energy path is now viable, with renewables emerging as the most affordable and secure option.

The report coincides with a surge in global clean energy trade. Exports of solar panels from China reached 68 gigawatts in March alone, double the level recorded in February and 49 percent higher than the previous peak in August 2025. Fifty countries reported record imports during that month. The increase reflects both policy changes in Chinese export incentives and a broader push by nations to reduce reliance on fossil fuels amid geopolitical tensions in the Middle East.

China’s combined exports of solar panels, batteries, and electric vehicles rose by 70 percent year on year in March, reaching a record value of 21.9 billion dollars. This expansion highlights the rapid scaling of clean energy supply chains and the growing role of China as a central exporter in the global transition.

Rising fuel prices are also accelerating the shift toward electric mobility. Sales of fully electric vehicles in major European markets increased by nearly one third in the first quarter of 2026. March marked a record, with more than half a million units sold for the first time. Growth trends are also visible in Asia Pacific markets, including Thailand, Australia, and New Zealand.

Chinese electric vehicles accounted for 16 percent of the European market in early 2026, up from 12.2 percent a year earlier. The expansion reflects competitive pricing and increased availability of models. Analysts note that continued volatility in oil and gas markets is pushing governments and consumers toward more resilient energy systems based on renewables.

The latest data confirms a major shift in the global energy landscape. Falling costs, rising demand, and rapid technological progress are positioning renewable energy as the dominant solution for future electricity systems.