The falling cost of large-scale battery storage is profoundly changing the electricity sector, particularly for solar power. According to BloombergNEF, the cost of a typical utility-scale battery installation has dropped by over 50% since 2022 and 27% in the last year, primarily due to advancements by Chinese battery producers and the use of lower-cost lithium-iron phosphate chemistry. This trend has made projects combining solar and wind generation with battery storage competitive with gas-fired power plants, with some systems able to provide 24-hour power at prices similar to or cheaper than fossil fuels.
This shift is evident in regions like California and Texas, where batteries are increasingly setting electricity prices in wholesale markets. In California, batteries provided an average of 8.6% of all electricity consumed during peak evening hours in 2024, helping to keep the lights on for approximately three million homes. By 2025, they regularly delivered over 6,000 megawatts at peak, a six-fold increase from three years prior. In Texas, batteries now power up to 10% of the state's grid at peak. This increased battery deployment is driving down wholesale power costs, as batteries can absorb cheap midday solar surplus and discharge during evening demand, often at a lower price than gas peaker plants.
The International Renewable Energy Agency (IRENA) highlights that the co-location of batteries with new utility-scale solar PV is becoming the standard configuration. In 2025, battery costs fell faster than any other energy technology, with installed costs for a four-hour utility-scale battery estimated at $140/kWh, a 30% decrease in one year and about 95% since 2010. Approximately one-quarter of all utility-scale solar PV commissioned globally in 2025 was paired with battery storage, a six-fold increase since 2020. This co-location improves grid connection utilization, shifts generation to higher demand periods, and reduces exposure to volatile electricity prices, ultimately providing firm, around-the-clock power at below $85/MWh for the best hybrid sites.
According to Ember, new battery storage installations are projected to reach 459 GWh in 2026, a 50% increase from 307 GWh in 2025. This capacity could theoretically shift 34% of new daily solar generation to non-solar hours. Countries like Bulgaria, Chile, and Australia are leading this trend, with Bulgaria installing enough storage to shift 77% of its new daily solar generation. In California, solar and battery storage met over a quarter of electricity demand during the evening peak in the first half of 2026, significantly up from 6.8% in the first half of 2023. However, Ember notes that for "anytime solar" to become a reality, electricity markets must ensure batteries can participate fully and operate where they provide the greatest value.
