Solar LCOE to fall 30% by 2035, says BloombergNEF

Analysis from BloombergNEF finds the levelized cost of electricity (LCOE) of a typical fixed-axis solar farm increased by 6% year-on-year in 2025 to stand at $39/MWh, but innovation and competition are expected to see costs fall by 30% through to 2035.

February 23, 2026 Patrick Jowett

Image: BloombergNEF

From pv magazine Global

The levelized cost of electricity (LCOE) of solar energy is set to fall 30% by 2035, according to analysis from BloombergNEF.

The analyst’s Levelized Cost of Electricity 2026 report says that while benchmark costs for solar all rose in 2025, due to a combination of supply chain constraints, poorer resource availability and market reforms in China, innovation and competition will lead to declining costs over the next decade.

The global benchmark LCOE for a typical fixed-axis solar farm increased by 6% year-on-year to stand at $39/MWh in 2025, according to Bloomberg’s data. At the start of the decade, fixed-axis solar had a global benchmark LCOE of a little over $60/MWh. Its current costs compare to a $40/MWh LCOE for onshore wind and $100/MWh for offshore wind.

Bloomberg’s latest analysis adds that while most clean power technologies became more expensive last year, the cost of battery storage projects fell to new lows.

The global benchmark LCOE for a four-hour battery project fell 27% year-on-year to $78/MWh, a record low since BNEF began 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.

Last year’s LCOE decline for battery projects was attributed to lower pack prices, increasing competition among manufacturers and improved system designs. BNEF is expecting battery storage LCOE to fall by a further 25% over the next decade.

Bloomberg also found that developers added 87 GW of combined solar and storage last year, delivering power at an average LCOE of $57/MWh.

“As costs continue to drop, we expect battery storage to strengthen solar project revenues, support broader renewable deployment and accelerate the shift toward storage‑led system balancing over fossil-fuel‑based peaking capacity,” commented Amar Vasdev, lead author of the report.

Last month, an international research team found Capex-driven strategies can help to reduce solar LCOE by 20%.

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