The global levelised cost of electricity (LCOE) for renewables reached new milestones in 2025, with single-axis tracker solar photovoltaic achieving the world’s lowest regional price of US$37/MWh (€35/MWh) in the Middle East and Africa, according to Wood Mackenzie.
The firm said solar PV remains the world’s most cost-competitive power generation source, driven by module efficiency gains and stabilising supply chains.
“Across all regions, renewable technologies demonstrate clear cost advantages over conventional generation,” said Ahmed Jameel Abdullah, senior research analyst at Wood Mackenzie. “We expect continued cost reductions through technological improvements, supply chain optimisation and economies of scale, reinforcing renewables’ position as the dominant power generation technology globally.”
In Asia Pacific, solar PV delivers generation costs as low as US$27/MWh in China, while onshore wind ranges between US$25 and US$70/MWh across China, India and Vietnam. Hybrid solar-plus-storage projects are gaining traction in Australia and India as battery prices fall, with China maintaining the lowest storage costs globally.
Europe’s renewable LCOE fell 7% this year as capital costs dropped 8% versus the 2020–2024 average. Utility-scale solar with single-axis tracking offers the lowest average cost, while onshore wind LCOE is expected to decline 16% through the decade to US$56.7/MWh by 2030.
In North America, solar and wind remain cost-competitive despite tariff and tax credit pressures, while in Latin America, renewable LCOE fell 23% between 2020 and 2024, led by Brazil, Chile and Mexico.
Across the Middle East and Africa, single-axis solar PV continues to outperform wind, with costs projected to fall to US$17/MWh by 2060.
Abdullah added: “The global energy transition is accelerating at an unprecedented pace, with renewable technologies achieving cost parity with conventional generation across all major markets. Our LCOE 2025 analysis reveals that solar PV and onshore wind have become the dominant low-cost options worldwide, whilst hybrid systems and battery storage are rapidly closing the competitiveness gap.”