Batteries beat gas peakers on cost globally, but U.S. faces trade headwinds

Battery storage that can power the grid for four hours straight is now cheaper to build than natural gas "peaker" plants (the gas-fired generators utilities switch on during high-demand hours) in every major market worldwide, according to new industry analysis. Falling battery costs and rising gas equipment prices are behind the shift.

The United States is something of an exception, at least for now. Tariffs and trade restrictions on imported solar equipment are keeping prices elevated here compared to other countries, which get cheaper Chinese-made panels and batteries. Utility-scale solar projects have some protection through already-secured equipment supplies, but analysts expect panel prices to keep climbing through 2030. Home and business solar installations are expected to feel this more: panel prices are projected to rise 6 percent in 2027 and another 14 percent in 2028. For battery storage, federal tax credits from the Inflation Reduction Act are currently helping offset higher costs tied to sourcing rules, though those credits are set to phase out in the late 2030s.

None of this changes the bigger picture for American homeowners weighing rooftop solar or a home battery: costs may rise somewhat over the next few years due to tariffs and the eventual loss of federal credits, but the long-term trend for battery prices is still downward. Separately, growing electricity demand from data centers and AI is pushing utilities to lean more on solar-plus-storage rather than building new gas plants, since gas equipment itself is in short supply and getting pricier.