This year, a non-ITC project of the same output and capacity has an LCOS of between US$210 and US$292/MWh. A 100MW/400MWh project that avails of the ITC still has a lower LCOS, but it now ranges between US$148/MWh and US$209/MWh.
As detailed in this Energy-Storage.news webinar from a few days ago, sponsored by Intertek CEA, FEOC restrictions introduced with last year’s budget bill, HR 1, or the so-called ‘One, Big, Beautiful Bill Act’ (‘OBBBA’), limit the material assistance cost ratio (MACR) projects can receive from FEOC sources.
While that means there is no blanket ban on Chinese materials, equipment, or investment as such, the MACR threshold is such that battery cells, which comprise around half of a BESS project’s Capex, cannot come from Chinese sources, or the project will be ineligible for the ITC.
In last year’s edition, Lazard had found “notable declines” in the LCOS of utility-scale and commercial and industrial (C&I) BESS, driven by factors including the slowdown in US electric vehicle (EV) demand growth—which led to increased cell supply for stationary BESS applications—and technological advances in energy density and cell capacity increases. LCOS declines in 2025 had been enough to offset rises between 2021 and 2024, which occurred as the global COVID-19 pandemic rocked supply chains.
