A message from President & CEO Dr. Max Holmes
My house was built in 1870. It has been heated by wood, coal, oil, natural gas, and now electricity drawn from the sun. In one sense, that is a mundane property record. In another, it is the entire history of human energy, compressed into a single address.
Wood came first. It always does. Since our ancestors learned to control fire, biomass has been the default answer to cold and darkness. The house would have had a cast-iron stove, fed by wood cut from nearby forests. This is how virtually every human being on earth stayed warm for tens of thousands of years, and many still do. It worked, but it was labor-intensive, land-hungry, and contributed to deforestation.
Coal replaced wood in the industrializing Northeast not because it was loved but because it was dense, cheap, and abundant. A ton of coal contained far more energy than the equivalent volume of wood and could supply cities that had long since stripped their surrounding forests. Then came oil – heating oil delivered by truck, burned in a furnace that could be thermostatically controlled. Oil heat was modern. It was convenient. It was what the house was running on when my wife and I bought it in 2000. The following year, we switched to natural gas, piped directly to the boiler—cleaner than oil, cheaper at the time, and widely regarded as a “transition fuel.” Last year, we made what I believe will be the final transition: heat pumps, powered by electricity, with solar panels on the roof and a contract for renewable energy for anything we draw from the grid.
The sequence—biomass, coal, oil, gas, electricity—is not just our home’s story. It is the arc of modern civilization. And the direction of travel has always been the same: toward fuels that are denser, cleaner, and more controllable, and away from those that are dirtier, heavier, and harder to move. Electricity, especially when generated from wind and sun, is the logical end of that arc. The sun and wind are limitless natural resources and our ability to harness them into electricity will only continue to be more efficient. The energy transition the world is now debating is not some radical rupture; it is the next step in a journey that has been underway since the first furnace replaced the first wood-fired stove.
The only real question is speed. And here, the conflict now consuming the Persian Gulf offers an unexpected answer. The closure of the Strait of Hormuz following the outbreak of military conflict with Iran has removed close to one-fifth of global oil supplies from the market. Prices have reached $100 per barrel or higher. Nations that import the majority of their fuel from the Persian Gulf are facing genuine shortages. The head of the International Energy Agency has called it the greatest global energy security challenge in history.
The conventional assumption might be that an oil shock slows the energy transition – that higher prices make everything more expensive and governments retreat to fossil fuels out of desperation. History suggests the opposite. The 1973 Arab oil embargo helped to launch solar research, energy efficiency standards, and nuclear expansion. Countries around the world are again confronting the danger of energy dependence. That recognition tends to produce investment in alternatives, not capitulation to the status quo.
There are headwinds, of course. The current U.S. administration has been openly hostile to renewable energy, rolling back incentives and attempting to prop up coal and oil production. But administrations are temporary. Solar panels and heat pumps are not. The economics of clean energy have already crossed the threshold at which policy resistance can reverse them; what governments can do now is slow the transition at the margin, not stop it. And a geopolitical crisis that makes the cost of fossil-fuel dependence unmistakable—not in future climate projections but in today’s energy prices—has a way of clarifying minds.
My house has been through this before. It didn’t choose its fuels for ideological reasons; it followed the logic of cost, availability, and technology. The world’s energy system will do the same.
At a time when climate victories are scarce, an acceleration of the energy transition is reason for hope. Those with the financial means—and perhaps the broader good fortune to live in a time and place where the choice is available—can lean into this transition, doing what they can to speed the inevitable shift away from fossil fuels and toward what I believe will be humanity’s ultimate energy source: clean electricity generated from renewable sources.
The energy transition alone will not solve the climate crisis, but it is an essential step in that direction.
Onward.
How climate change is influencing Europe’s record-breaking heat wave
NPR’s Michel Martin speaks with Jennifer Francis, senior scientist at the Massachusetts-based Woodwell Climate Research Center, about the impact of Europe’s heat wave and its links to climate change.
Since the 1970s, categorical exclusions (CEs) within the National Environmental Policy Act have applied only to activities that have been consistently and scientifically reported to not have a significant effect on the environment. The thinning of forest and woodland density of areas up to 5,000 acres, a significant increase from the current 70 acre limit, would undoubtedly have a significant impact on the environment, as demonstrated by the large repertoire of scientific research highlighting the critical role of forests in storing atmospheric carbon. Furthermore, the forest ecosystem has become increasingly vulnerable to wildfire due to human activity and climate change. Wildfires present extreme threats to human health, with over 15,000 deaths being attributed to wildfire particulate matter over the last 15 years. Even without any major escalation in the deterioration of our forests, the scale and impact of wildfire smoke on human health is projected to increase.
Altered fire regimes based on the principles of wildfire suppression, which this proposed revision uses in its justification, do not recognize the natural benefit of fire and have been shown to exacerbate fire-associated emissions. With such a critical issue at hand, the consultation of scientists and local communities is imperative, which is not reflected in this proposal. Thus, Woodwell strongly opposes the broadening of this CE for the Bureau of Land Management.
Scientific Objection to the Categorical Exclusion for Forest and Woodland Density Management
The proposed revision of this CE is based on the strategy of mechanical thinning. However, there is little to no scientific evidence concluding that the act of mechanical thinning alone universally lessens the risk of wildfire, as integrated fire management strategies are extremely dependent on the context of the ecosystem in which it is deployed. Woodwell research has found that without tailoring the wildfire strategies to their specific environment and pairing it with other more traditional wildfire management methods, these actions may have adverse consequences.
Under conditions of increased temperatures, which would be further amplified by increased carbon emissions driven by deforestation, burned area is expected to increase. With the incredible danger that wildfires pose to human safety, any actions that may degrade natural ecosystems and amplify wildfire impacts must be coupled with extensive environmental review, not the absence of such. By foregoing environmental review through the expansion of this CE, the Federal government is inviting the potential to further endanger our forest ecosystems and the lives of Americans.
The Critical Role of Forests in Carbon Sequestration
The proposed rule fails to recognize the integral role that forests play in carbon sequestration. BLM forests contain about 8 million acres of old growth and 13 million acres of mature forest – about ⅔ of the total area of BLM forest. Mature and old-growth forests, with their much older and larger trees, hold more carbon. Mature and old-growth forests are also more resilient and adaptive in the face of disturbances such as wildfires, which makes them a high priority for environmental protection. It is hard to imagine that these carbon-dense ecosystems would be excluded from logging under the proposed CE.
Woodwell researchers have also found that even beyond the cooling effects of sequestered carbon, forests provide biophysical cooling effects on a local and global scale. This unique quality promotes local climate stability, reducing extreme temperatures year round.
Since 2001, forest fire carbon emissions have increased by 60%. It is projected that by mid-century, wildfires in the northern region of North America would alone contribute to a cumulative net source of nearly 12 gigatonnes of carbon dioxide emissions into our atmosphere, further exacerbating temperatures and subsequent wildfire ignitions.
Impacts on Climate Resilience and Risk Mitigation
While the proposal argues that expanding forest thinning will reduce wildfires, scientific research has frequently called on officials to implement natural climate solutions to increase ecosystem resilience and limit climatic threats such as wildfire.
Fire is a natural and integrally important process in the life cycle of our forest ecosystems. Woodwell scientists study and promote traditional methods of fire management of local and indigenous peoples who recognize the environmental benefits of fire via prescribed burns. Trained professionals can employ these tactics of prescribed or controlled burns to reduce the build up of natural fuels, benefiting plants and wildlife by recycling the carbon back to the earth.
Conversely, we have found that more modern fire suppression tactics have led to oversuppression, contributing to the buildup of dry fuel on the forest floor. Combined with the ever warming temperatures destabilizing atmospheric conditions, increasingly frequent lightning strikes ignite these more flammable forests.
regular fires to periodically clear out this fuel, the land has become more vulnerable to intense and widespread fires. Woodwell is especially concerned with the proposed expansion of the CE of forest and woodland density as it relies on the tactic of mechanical thinning and strives for wildfire suppression, thus risking increased rates of wildfire. In order to properly manage fires in a way that creates a healthier and safer environment, fire management must utilize fire itself.
The proposed revision’s emphasis on mechanical thinning and logging also raises concerns regarding human impact. Anthropogenic influences such as population density, a human footprint index, and roadless volume all have significant statistical correlations to fire occurrence. Previous actions, such as the rescission of the 2001 Roadless Rule, have already demonstrated the harm that logging and other commercial activities pose to forests. Recent research has shown that roads increase the likelihood of wildfire ignitions because human activities are the most common cause of wildfire; once an area becomes accessible, the probability of wildfire increases. The massive expansion from 70 acres to 5,000 acres eligible for the CE of forest and woodland density would only incite more logging activities and the
acceleration of associated fire occurrence.
Lastly, this announcement fails to elaborate on the “additional tool” which it claims will assist decision-makers in planning areas to implement fuel treatments. Without a demonstrated and sound scientific basis for this tool, the likelihood that project decisions will reflect consideration of forest values beyond timber production is cast into doubt.
Conclusion
The proposed expansion of the Categorical Exclusion rejects scientific evidence and prioritizes logging activities over the safety of American citizens. Woodwell urges the Department of the Interior to:
- Integrate the implementation of prescribed or controlled burns to lessen excess vegetation in wildfire mitigation, as opposed to suppressing fires and building flammable materials.
- Engage and consult with local communities to create collaborative and tailored fire management strategies based on the particular ecosystem in which they will be deployed.
- Provide details about the “additional tool” that will assist in designating fuel treatment areas, specifically its scientific basis and values.
- Evaluate each project for the impact of estimated carbon emissions on the broader environment.
- Maintain the CE of 70 acres for tree and woodland density so as to minimize forest disturbances and build ecosystem resilience to wildfire at minimum. Ideally, perform environmental assessments under NEPA for all projects regardless of size.
Woodwell Climate Research Center urges the Council on Environmental Quality to reconsider aspects of this Categorical Exclusion to ensure that the pursuit of efficiency does not compromise the scientific rigor and comprehensive scope necessary for effective environmental review under NEPA. Accelerating logging activities and forest deterioration via inappropriate thinning will only amplify the wildfire risk that this proposal claims to address. It is imperative that the Bureau of Land Management’s NEPA implementing procedures facilitate, rather than hinder, the full consideration of environmental impacts, cumulative effects, and health of our citizens.
In a new joint “Feeding Resilience” report, the Center for Climate and Security, an institute of the Council on Strategic Risks, along with the Woodwell Climate Research Center, shows that climate change is sharply increasing the risk of crop failures in global breadbaskets, which would pose serious threats to Europe, the NATO alliance, and global stability, at a moment of multiple geopolitical shocks. In India and Europe, for example, climate change in the next decade and a half is set to increase the chance of key crops failing by between two- and six-fold. This rising risk comes as the world is already facing severe food shocks due to the wars in Iran and Ukraine, and is entering into a potentially unprecedented El Niño season. The report offers a range of policy recommendations to address this major risk.
The report, Global Breadbaskets: Food System Resilience as a Strategic Imperative, draws on a range of global crop models to assess the growing risk of climate-driven agricultural failures in ”key producers of wheat, maize, and rice” like Europe and India, and examines the cascading geopolitical consequences of a world in which multiple breadbaskets fail at once.
The lead author on the report, Tom Ellison, Deputy Director of the Center for Climate and Security, stated: “We have plenty of examples of how crop failures can contribute to political instability, from the French Revolution to the Arab Spring. In today’s environment, global breadbasket failures could strain NATO priorities, prompt unrest in key countries, and upend trade relationships. Amid climate change, geopolitical uncertainty, food shocks from the war in Iran, and Russian hybrid warfare, investing in a resilient food system isn’t in competition with security–it’s a key part of it.”
Co-author of the report, Noah Fritzhand, Research Fellow at the Center for Climate and Security, added: “With the implementation of NATO’s updated baseline resilience requirements come July and adoption of the EU’s new integrated framework for climate resilience later in 2026, member countries have an opportunity to prioritize investments in resilient food systems, at home and abroad, that can both limit exposure to climate risks and meet Europe’s strategic goals.”
Dr. Alexandra Naegele, co-author of the report and Research Scientist at Woodwell Climate Research Center, noted: “Climate change doesn’t just threaten crop yields and grain quality—it destabilizes entire food systems, from labor and livestock to food storage and transport. These impacts are colliding with a powerful El Niño taking shape, which is expected to weaken the monsoon, trigger heatwaves, and reduce rainfall across India. Quantifying these climate-driven risks is an essential step toward building resilient food systems and safeguarding global food security.”
Co-author of the report, Monica Caparas, Research Scientist at Woodwell Climate Research Center, concluded: “The consequences of a breadbasket failure extend far beyond the region where it occurs. As globally important food-producing regions face growing risks of climate-driven disruption, the effects can ripple through livelihoods, supply chains, food assistance systems, and geopolitical relationships. Understanding and preparing for breadbasket failures is both a national security priority and a humanitarian imperative—one that can help protect lives, reduce instability, and strengthen food resilience before a regional shock becomes a wider crisis.”
A message from President & CEO Dr. Max Holmes
My house was built in 1870. It has been heated by wood, coal, oil, natural gas, and now electricity drawn from the sun. In one sense, that is a mundane property record. In another, it is the entire history of human energy, compressed into a single address.
Wood came first. It always does. Since our ancestors learned to control fire, biomass has been the default answer to cold and darkness. The house would have had a cast-iron stove, fed by wood cut from nearby forests. This is how virtually every human being on earth stayed warm for tens of thousands of years, and many still do. It worked, but it was labor-intensive, land-hungry, and contributed to deforestation.
Coal replaced wood in the industrializing Northeast not because it was loved but because it was dense, cheap, and abundant. A ton of coal contained far more energy than the equivalent volume of wood and could supply cities that had long since stripped their surrounding forests. Then came oil – heating oil delivered by truck, burned in a furnace that could be thermostatically controlled. Oil heat was modern. It was convenient. It was what the house was running on when my wife and I bought it in 2000. The following year, we switched to natural gas, piped directly to the boiler—cleaner than oil, cheaper at the time, and widely regarded as a “transition fuel.” Last year, we made what I believe will be the final transition: heat pumps, powered by electricity, with solar panels on the roof and a contract for renewable energy for anything we draw from the grid.
The sequence—biomass, coal, oil, gas, electricity—is not just our home’s story. It is the arc of modern civilization. And the direction of travel has always been the same: toward fuels that are denser, cleaner, and more controllable, and away from those that are dirtier, heavier, and harder to move. Electricity, especially when generated from wind and sun, is the logical end of that arc. The sun and wind are limitless natural resources and our ability to harness them into electricity will only continue to be more efficient. The energy transition the world is now debating is not some radical rupture; it is the next step in a journey that has been underway since the first furnace replaced the first wood-fired stove.
The only real question is speed. And here, the conflict now consuming the Persian Gulf offers an unexpected answer. The closure of the Strait of Hormuz following the outbreak of military conflict with Iran has removed close to one-fifth of global oil supplies from the market. Prices have reached $100 per barrel or higher. Nations that import the majority of their fuel from the Persian Gulf are facing genuine shortages. The head of the International Energy Agency has called it the greatest global energy security challenge in history.
The conventional assumption might be that an oil shock slows the energy transition – that higher prices make everything more expensive and governments retreat to fossil fuels out of desperation. History suggests the opposite. The 1973 Arab oil embargo helped to launch solar research, energy efficiency standards, and nuclear expansion. Countries around the world are again confronting the danger of energy dependence. That recognition tends to produce investment in alternatives, not capitulation to the status quo.
There are headwinds, of course. The current U.S. administration has been openly hostile to renewable energy, rolling back incentives and attempting to prop up coal and oil production. But administrations are temporary. Solar panels and heat pumps are not. The economics of clean energy have already crossed the threshold at which policy resistance can reverse them; what governments can do now is slow the transition at the margin, not stop it. And a geopolitical crisis that makes the cost of fossil-fuel dependence unmistakable—not in future climate projections but in today’s energy prices—has a way of clarifying minds.
My house has been through this before. It didn’t choose its fuels for ideological reasons; it followed the logic of cost, availability, and technology. The world’s energy system will do the same.
At a time when climate victories are scarce, an acceleration of the energy transition is reason for hope. Those with the financial means—and perhaps the broader good fortune to live in a time and place where the choice is available—can lean into this transition, doing what they can to speed the inevitable shift away from fossil fuels and toward what I believe will be humanity’s ultimate energy source: clean electricity generated from renewable sources.
The energy transition alone will not solve the climate crisis, but it is an essential step in that direction.
Onward.
Last week, the climate science and policy community was saddened by the passing of Rafe Pomerance, a longtime leader and advocate in the fight against climate change.
Pomerance was one of the first people to sound the alarm over climate change on Capitol Hill. He played a pivotal role in the climate movement, connecting scientists with policymakers and the media.
One of those scientists was Dr. George Woodwell—Pomerance and Woodwell shared a partnership rooted in the belief that science needed a strong voice in Washington. Together, they helped bridge the gap between scientific understanding and public action, advancing some of the first congressional conversations on climate, and helping lay the foundation for today’s climate movement.
At the Woodwell Climate Research Center, Pomerance served as Distinguished Senior Arctic Policy Fellow, as well as Chairman of Arctic 21—a network of organizations that focused on communicating the consequences of climate change on the Arctic to policy makers and the public.
Author Nathaniel Rich wrote a 2018 article and 2019 book both titled Losing Earth, which tells the story of a handful of scientists, politicians, and strategists who were among the first to try to convince the world to act on climate change and the fossil fuel industry’s fight to stop them. Woodwell Climate interviewed Pomerance about the article, which featured both him and George Woodwell as leaders in raising awareness of the climate threat.
When asked how he felt about his work on climate progress, Pomerance responded, “I knew very early that this would become a dominating issue on the planet. We started out and nobody knew anything about it and now everyone does. Was it worth it? Absolutely.”
Pomerance’s legacy lives on not only through the policies and progress he influenced, but through the generations of scientists, advocates, and leaders he inspired along the way. Dr. Max Holmes, Woodwell Climate President and CEO, counted Rafe as a “colleague, an inspiration, and a friend — someone who will be dearly missed but always remembered,” a sentiment echoed by Woodwell staff and people around the world.
Rest in peace, dear Rafe.
Background
Solar energy and battery storage costs have decreased dramatically as prices remain stagnant for natural gas, coal, and nuclear. Over the past decade, solar prices have decreased by 14% per year and battery prices have dropped 20% per year according to data from the International Renewable Energy Agency (IRENA)1. Energy forecasts, however, typically assume only minor improvements in renewable prices, causing now-infamous predictions of renewable capacity growth such as the International Energy Agency (IEA) projections, which over the past 15 years have repeatedly underestimated solar deployment2. As such, we project power prices from an alternate scenario that assumes future innovations allow the cost declines of the past 15 years to continue through 2050. Using this scenario, we demonstrate the risk to legacy power systems from potential cost improvements in solar and batteries.
As of 2025, it is cheaper to build a solar plant than a fossil or nuclear power plant for daytime power in most locations, but expensive batteries limit the cost-competitiveness of solar power outside of daylight hours. While utility-scale batteries are currently prohibitively expensive for use outside of peak hours, a continuation of recent price decreases would lead to solar and batteries being the cheapest source of power within a decade, creating major challenges for legacy power plants.
The combination of rapid improvements in renewables and stagnant prices for fossil energy sources also creates a challenge for manufacturers dependent on legacy power systems. This energy-price pressure causes large impacts on energy-intensive manufacturing, creating offshoring risk for strategically and economically important industries such as aluminum, data centers, and some advanced manufacturing.
Methodology
Electricity prices were calculated from 2025–2050 under four scenarios: Solar Ascendant, a solar and batteries heavy scenario in which 90% of power is generated from solar and 10% from hydropower, with battery storage equal to half of daily solar output to cover nighttime power needs; Current Mix, which assumes the current mix is used in future years; Coal Resurgent, a fossil-based scenario with 10% hydro, 10% nuclear, 40% coal, and 40% natural gas; and the IEA Current Policies Scenario3. Electricity demand is forecast to grow by roughly 50% by 2050, necessitating the construction of new power plants that have substantially higher effective operating prices than full depreciated legacy power plants. The Lazard Levelized Cost of Energy (LCOE) is 469%, 67%, and 155% higher for nuclear, coal, and natural gas, respectively. As such, in all scenarios the midpoint of the Lazard LCOE estimates4 for newly constructed and fully depreciated power was used for all sources except for solar and batteries, which are assumed to be entirely new and non-depreciated. To simplify analysis, wind and solar generation are grouped together in the IEA Current Policies Scenario forecasts. This simplifying assumption is partially motivated by current deployment trends, as wind capacity growth in 2025 was less than 1/4 of solar capacity growth5.
For solar, the Lazard LCOE for new solar was used as the starting estimate for 2024, with future prices projected following the observed 14% per year decline from IRENA. For batteries, Bloomberg BNEF’s 2024 price estimate6 was used as the starting value, with a 20% per year price decline calculated from historical IRENA data. For solar and batteries, the price of new construction rather than depreciation was used to allow for a conservative estimate of prices. A five-year average age of installed capacity was assumed, causing a five-year lag in price declines. For the manufacturing and services cost analysis, energy inputs and prices were gathered from a variety of sources and reflect constant 2025 efficiency and prices. Electricity inputs are taken from industry sources, with energy input prices for each of the four products calculated by multiplying the electricity required by the cost from each energy mix.
Results
Renewable technologies such as solar, wind, hydro, and batteries differ fundamentally from fossil fuel and nuclear sources in that power can be generated without the purchase of fuel, allowing for a far lower price floor. Solar is already the cheapest source of new power generation as of 2025, and our forecast finds this trend becomes more pronounced, with solar power more than 90% cheaper than coal, nuclear, or natural gas by 2050 (Figure 1). However, solar is only capable of producing power during daylight hours, necessitating a separate power source. Conventional fossil fuel and nuclear-based power plants generally struggle to operate intermittently or incur far higher costs, necessitating alternate nighttime-only sources such as batteries7.
Currently, utility-scale battery storage is prohibitively expensive outside of evening and morning windows of peak power prices. Nevertheless, global utility-scale battery capacity increased 90% annually from 2010–2023, with 92 GW or roughly 0.2% of global electricity generation installed in 2025 alone8. Our forecast finds that by 2029, battery prices will decrease enough that overnight storage of daytime solar is not only feasible, but cheaper than conventional energy sources. This major inflection point indicates the year when fossil fuel power generation, even from existing fully depreciated plants, will not be economically competitive with a mix of solar power and batteries. From 2030 onwards, existing natural gas and nuclear plants will operate at a higher price than renewables during both daylight and nighttime hours, leading to the shuttering of existing plants, similar to the decommissioning of coal plants, which have been undercut by cheaper natural gas in developed economies in the past few decades. Solar power requires no inputs and generates excess energy during peak daylight, which is purchased and stored at very low prices by utility-scale batteries and sold at night at higher rates. Continuous improvements in solar farm costs lower daytime power prices, while improvements in batteries lower prices of nighttime power. Meanwhile, fossil and nuclear input prices and operation costs remain static, causing legacy power plants to be wholly uncompetitive.
The economics of input-free renewable power are straightforward and global, but the rollout will vary substantially by country, creating cost-competitiveness challenges for domestic manufacturers. We model power prices from four energy mixes: solar with batteries; the global average 2025 energy mix; a mixture of 10% hydropower, 10% nuclear, 40% coal, and 40% gas; and the IEA Current Policies scenario (Figure 2). For the solar and batteries scenario, we assume the average power generation facility is five years old, meaning that the 2030 energy price reflects 2025 generation costs. We find that solar with batteries is the cheapest energy mix beginning in 2033 and costs only 0.4 cents per kWh in 2050, less than 10% of the costs from other energy mixes. While these prices are astonishingly low, moderate improvements in efficiency and substitution of cheaper materials are capable of achieving these dramatic price improvements9.
This tenfold divergence in domestic power prices creates large differences in energy input costs. Here, we calculate energy input costs in manufactured goods, both in absolute terms and as a percentage of the price of the finished good, demonstrating that impacts are largest in goods that are energy-intensive and low-margin (Figure 3). Aluminum production is particularly impacted, with 8% lower manufacturing margins from the current energy mix compared to the solar and batteries mix in 2035, increasing to 20% lower margins in 205010. The strategic importance of aluminum production for military use, combined with the inability to be cost-competitive, creates an interesting conundrum for policymakers with legacy power systems: either allow cost-pressures to offshore manufacturing to potential adversaries, or pursue expensive subsidies to maintain domestic production. Similar issues are seen in data centers, which represent a major economic and technological opportunity, as well as a growing strategic resource due to defense applications. However, following projected cost improvements in renewable power, data centers will face cost pressures leading to relocation to countries that have pursued cheaper renewable power, creating domestic shortages and leverage for host countries with cheap power. Manufacturing margins for steel production and vehicles are much less affected, though a 1–2% decrease in margins could still shutter some domestic facilities. As such, higher-margin specialty manufacturing is likely to be less impacted, though there is a minor increase in offshoring pressure.
Conclusion
A continuation of observed price declines for solar and batteries results in solar and batteries being the cheapest power mix for most locations by 2033, with 90% lower costs from solar and batteries compared to other power mixes by 2050. The sharp decrease in battery prices will allow stored excess daytime solar energy to be cheaper than fossil sources for nighttime power needs by 2030. Given these rapid battery price declines, policymakers should plan for solar overcapacity to power future battery storage. Countries that lag in deployment of solar and batteries risk uncompetitive power prices, creating offshoring risk for strategically and economically important industries such as aluminum production and data centers, as well as other low-margin, high-energy processes.
Forecasts of solar and battery deployment have consistently underestimated growth by projecting minor decreases in costs, despite consistent observed exponential cost declines. Recent forecasts continue to underestimate cost improvements, with an early 2025 forecast somehow managing to project 2050 battery prices would be higher than observed prices later that year, despite forecasting price declines11. Rather than assuming limited technological improvements, we choose to model a scenario where innovation continues at the observed annual rate. Because batteries and solar are still relatively early in development and remain far from perfected, we believe that continued innovation is a more reasonable assumption than stagnation for the next few decades, motivating this modeling exercise.
Solar power, and to a lesser degree batteries, require only free inputs, leaving materials, manufacturing, shipping, installation, and upkeep as the only costs. Each of these costs can be lowered with further improvement, with materials in particular showing promise as both solar and batteries are being developed with increasingly cheap and ubiquitous resources. Currently, battery and solar production require substantial fossil inputs from mining, shipping, and manufacturing. As renewable electricity becomes cheaper, these processes will electrify, further lowering prices. Similarly, developments in battery technology and manufacturing processes, as well as improvements in utility-scale deployment, present opportunities for massive price declines. Taken together, a continuation of observed decreases in renewable power generation costs is well within the realm of possibility, requiring a sober analysis of the economic and security challenges for countries that lag in deployment of renewable power generation.
