Technical Analysis
Solar and storage at 54 $/MWh: IRENA certifies the end of fossil fuel competitiveness
📅 June 2026
⏱ Reading: 5 minutes
PVclick Strategy Team
Operational and commercial analysis for the Italian PV sector
What you will find in this article
- What is the "firm LCOE" and why does it change the reading of the electricity cost
- The numbers comparing solar+storage vs coal vs gas
- Historical cost reductions: -87% solar, -93% batteries since 2010
- How to translate IRENA data into the B2B pitch towards Italian energy-intensive customers
Who is IRENA
What is “firm LCOE” and why does it matter
The comparison numbers
| Tecnologia | Costo (USD/MWh) | Caratteristiche |
|---|---|---|
| Solare + storage (siti alta irradiazione) | 54-82 $/MWh | Firm LCOE, energia garantita 24/7 |
| Carbone nuovo (Cina) | 70-85 $/MWh | Baseload tradizionale |
| Gas nuovo (globale) | oltre 100 $/MWh | Baseload flessibile, soggetto a volatilità prezzo gas |
| Solare+storage al 2030 (proiezione IRENA) | sotto 50 $/MWh nei siti migliori | Ulteriore -30% sui costi attuali |
The Italian coverage of the report translated the data clearly.pv magazine Italia on May 8, 2026 headlined “fixed costs for solar energy and storage drop to $54/MWh”, GreenReport e Vaielettrico have both highlighted the competitive turning point.
📊 The honest warning
the 54 $/MWh figure applies to “high-quality resource regions”, i.e. sites with high irradiation such as the south of the Iberian peninsula, Australia, Chile, some areas of North Africa and the Middle East. In Italy the South and the islands come close to these conditions, the Centre-North does not. The message is not “in Italy solar+storage costs 54 $/MWh everywhere”, but “the leap is structural, the trajectory is clear, and in the best Italian sites the economics already holds up to comparison with gas”.
The historical reductions that explain the trajectory
- -87% total installed costs of solar PV from 2010 to 2024
- -55% total installed costs of onshore wind from 2010 to 2024
- -93% battery costs from 2010 to 2024
To size: in 2024 the global average LCOE of utility-scale solar was 0.043 $/kWh (i.e. 43 $/MWh for the PV component alone without storage). Adding storage to guarantee 24/7 production costs a premium which today brings the total to 54-82 $/MWh, still below fossil fuels.Rinnovabili.it read the data as a system signal: 24/7 renewables have finally reached the economic maturity that made them complete competitors of traditional sources.
IRENA projects further reductions of around 30% in 2030and of 40% in 2035, bringing the firm LCOE below 50 $/MWh in the best sites. IRENA general director Francesco La Camera summarized the outcome of the report in one sentence: “24/7 renewables are now economically competitive with fossil ones”.
How to translate the data into the B2B pitch
1. From "saving on bills" to the "alternative to gas"
The traditional commercial discussion with an industrial customer starts from the bill: how much you pay, how much you can save with self-consumption. It is a pitch that works on the margin, not on the structural cost level. With the LCOE firm as a benchmark, the discussion goes up a notch: we are talking about an infrastructure asset that generates electricity at a structural cost lower than that of new gas, for the next 20-25 years of operation. For CFOs and industrial directors, it’s a different argument.
2. The most mature use case: energy-intensive industries located in the South
The customers where the IRENA data works immediately are the energy-intensive industries with factories in Puglia, Basilicata, Sicily, Sardinia, Calabria. Steel, ceramic, cement, glass, high energy consumption food, medium-sized chemical plants. Here solar radiation is competitive with the benchmark sites in the report, the availability of production land adjacent to the factories is high, and exposure to the PUN of gas (over €100/MWh in many hours) is the main variable cost of the business.
3. Build a customer-specific LCOE firm
The IRENA data is a system benchmark. The commercial proposal that works is to build a specific LCOE firm for the customer’s site, with three inputs: site irradiation (PVGIS, Solargis databases), storage sizing for the load profile, CAPEX unit cost of the concrete BOM that can be supplied. Final comparison with the site’s gas PUN over 25 years: if the delta is positive in favor of PV+BESS, the project sells itself.
The crucial note: construction and permitting times
One point of the IRENA report that deserves strategic attention is the construction time: a PV+storage plant is built in 1-2 years from obtaining the permit and connection, well below the time of a new gas power plant. For industrial decarbonization strategies over the next 5 years, the time factor is at least as important as the cost factor. A customer who decides today to replace a process boiler or a waste-to-energy plant with PV+storage+heat pump can see the operating system before 2028. The same customer who decides to build a new gas power plant does not have the same timing certainty.
The four operational implications for those who sell in Italy
- Change of interlocutor: the LCOE pitch firm should be brought to the CFO or general manager, not to the maintenance manager. It is a conversation about infrastructural assets, not components
- Geographic focus on the South: for energy-intensive industries located in the South, the IRENA data applies with a margin. For the Centre-North, a specific case must be built with local irradiation and wider storage coverage
- Sale of system, not kWp: the LCOE firm includes modules, structures, inverters, storage, EMS, BoS. The business value is in the complete architecture, not in the individual components
- 20-25 year horizon: The conversation shifts from the initial payback to the 20-year profitability of the asset. Documentation and business case must cover the complete window
How PVclick supports pivoting
The accumulation is the component that transforms a photovoltaic system into an LCOE asset firm, and the direct import from Tier 1 producers with an Italian team is the way to build the BOM at the competitive cost that the IRENA benchmark implies. For industrial C&I projects in the South and for utility-scale projects pursuing MACSE qualification, PVclick works with volume agreements on Chinese Tier 1 (BESS, modules) and on European producers (inverters when needed for EU fund requirements), aligning supply chains and construction timetables. The PVclick analysis on the 2026 market had already anticipated the solar-storage convergence as the dominant dynamic of the two-year period.
The three actions to close immediately
- Reformulate the B2B pitch on industrial energy-intensive customers with the LCOE benchmark firm as a reference, replacing the traditional “bill savings” argument
- Build site-specific LCOE firms for more mature prospects, with local irradiation, storage sizing and concrete BOM, and 25-year comparison with the PUN gas expected
- Pre-allocate the supply chainof modules and BESS for the 2026-2028 construction sites with direct volume agreements, before the global backlog erodes delivery times
Do you want to build a specific LCOE firm for one of your industrial customers?
PVclick supports installers, EPCs and developers in the direct import of the complete PV+BESS BOM from Tier 1 producers, with volume agreements to secure prices and delivery times. Italian team for logistics, customs and business case support.
Horizontal bar chart of firm LCOE in $/MWh for four technologies: solar+storage 2025 (54-82), China new coal (70-85), global new gas (over 100), solar+storage 2030 projection (under 50).
