China, India and Vietnam Lead With Lowest Solar & Wind Costs-Wood Mackenzie

Globally, the levelised cost of energy (LCOE) growth continues to reflect growth in renewable energy technologies. Based on the Wood Mackenzie region-wise analysis covering Europe, North America, Latin America, Asia Pacific and the Middle East, and Africa regions, it predicts solar photovoltaic technology would maintain its position as a cost-competitive power generation source through 2025.

The report found it to be especially true in the Middle East and Africa, where the single-axis tracker systems for solar energy are sourcing power generation at US$37/Megawatt-hour (MWh). Based on its analysis, Wood Mackenzie expects continued improvements in module efficiency and supply chain stabilisation to drive further cost reductions across all major regions. 

Here is a brief region-wise analysis:

#Asia Pacific 

Based on the report's key findings, wind and solar technologies continue to drive structural change across the Asia Pacific's (APAC) power market. The Utility-scale solar photovoltaic delivers the lowest generation costs with LCOE spanning US$27/MWh in China to US$118/MWh in Japan by 2025.

Within the Onshore wind segment, China, India, and Vietnam are achieving global leadership at US$25-70/MWh in onshore wind energy. On the other hand, the offshore wind costs vary dramatically by market. The study noted that China is demonstrating positive merchant revenue potential whilst other markets face elevated costs through the early 2030s. 

The hybrid solar-plus-battery systems are gaining momentum across APAC as battery costs fall and efficiencies improve, with Australia stabilising solar through batteries. Whereas India is pushing hybrid systems toward grid parity, and China is maintaining competitive advantages in energy storage costs, with the lowest storage LCOE.  

#Europe 

Europe's renewable LCOE fell 7% in 2025 as capital costs dropped 8% versus the 2020-2024 average. Utility-scale solar with single-axis tracking offers Europe's lowest average LCOE, with declining module prices driving 10% cost reductions from 2024. 

In the Utility-scale 4-hour battery storage costs, the study estimated it to fall below US$100/MWh by 2026, dropping another 35% by 2060. Additionally, the commercial distributed PV LCOE will decline 49% according to the research by 2060 compared to current levels. Southern and Eastern European markets rank highest for onshore wind and solar revenue surplus. 

#North America  

Renewable technology costs in North America will also decline to 2060 despite policy challenges. The study viewed the new US tariffs as having increased short-term solar capital costs. However, advancing module, inverter, and tracker technologies to drive long-term price reductions. Similarly, residential solar faces near-term cost pressures from tariffs and investment tax credit phaseouts. 

#Latin America 

Based on the Wood Mackenzie research findings, the average LCOE for renewables in Latin America fell 23% between 2020 and 2024. Improved performance and a 20% reduction in capital costs per kilowatt (kW) drove this decline.

It found that commercial solar PV achieved the lowest average LCOE across the region. Single-axis solar PV delivered the most competitive utility-scale generation costs in 2025. Mature markets, including Brazil, Chile, and Mexico, recorded the region's lowest LCOE values. 

On the other hand, Latin America's battery storage market continues to expand as global prices decline. It anticipates the storage LCOE to decrease 24% by 2060 as the market matures. Countries are implementing policies to support storage deployment. 

#Middle East and Africa 

For the Wind and solar LCOEs across the Middle East and Africa region, the Wood Macanzie research expects a further decline in 2025, falling 6% to 10% year-on-year. On the contrary, it expects utility-scale solar PV to maintain its position as the region's price setter. 

In Saudi Arabia and the United Arab Emirates, the single-axis tracker technology consistently outperforms onshore wind in these markets. The study projects single-axis tracker PV costs to converge at approximately US$17/MWh by 2060. 

On the other hand, the tracker and fixed-tilt PV technologies will remain more cost-effective than onshore wind throughout our outlook period. Onshore wind costs will settle around US$30/MWh over the same timeframe.

Whereas, the utility-scale battery storage costs across the Middle East continue their downward trajectory, with average turnkey prices in Saudi Arabia and the UAE expected to decline 7% to 9% by 2034. 

“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” added Abdullah.