Utility scale battery storage costs fall to US$125 per kWh

Core equipment costs can rise to around US$100 per kilowatt-hour or more in markets with higher tariffs, among others.

All-in capital expenditure for long-duration utility-scale battery energy storage systems has fallen to about US$125 per kilowatt-hour outside China and the United States, according to an analysis by energy think tank Ember.

Ember said the estimate applies to battery systems with four hours or more of duration and comprises roughly US$75 per kilowatt-hour for core equipment, largely sourced from China, and about US$50 per kilowatt-hour for installation and grid connection.

Based on this cost structure, Ember estimated a levelised cost of storage of around US$65 per megawatt-hour for shifting electricity between time periods, such as storing solar power generated during the day for use at night.

Using the same assumptions, Ember said storing around 50% of a day’s solar output would add about US$33 per megawatt-hour to the cost of solar generation.

Based on a global average solar price of US$43 per megawatt-hour in 2024, this implies a total cost of about US$76 per megawatt-hour for a more dispatchable solar profile.

On equipment costs, Ember cited lithium iron phosphate stationary storage cell prices in China of about US$40 per kilowatt-hour as of November 2025.

It said enclosures account for most of the core equipment cost, whilst power conversion systems and energy management systems represent a smaller share.

Ember noted that costs can vary widely by market. Core equipment costs can rise to around US$100 per kilowatt-hour or more in markets with higher tariffs, stricter standards, or local-content requirements, whilst installation and grid connection costs also vary significantly, with grid connection often a major swing factor.

The levelised cost of storage assumptions in Ember’s base case include a 20-year project life, a 7% discount rate, 90% round-trip efficiency, utilisation equivalent to about 80% of one full cycle per day, and annual operating costs of 2% of capital expenditure.

Ember added that its definition of levelised cost of storage refers specifically to the cost of shifting one megawatt-hour of electricity to another time period and excludes the cost of the electricity used to charge the battery, which differs from some other industry definitions.