Australian households can anticipate ongoing reductions in electricity generation costs, with solar and battery storage confirmed as the lowest-cost pathway to achieve net-zero emissions by 2050. This authoritative finding comes from the GenCost 2025-26 Final Report, released on July 14, 2026, by Australia’s national science agency, CSIRO, in partnership with the Australian Energy Market Operator (AEMO).
The annual report, now in its eighth year, provides a comprehensive assessment of new-build electricity generation, storage, and hydrogen technologies. It highlights that renewable energy, firmed by storage, is not only the most economical option but is also helping to shield Australia from global energy market volatility.
Near-Term Savings Driven by Battery Storage
Australians are already seeing the benefits, with average National Electricity Market (NEM) generation prices falling to approximately $104 per megawatt-hour (MWh) in 2025, a significant drop from the peak of $189/MWh in 2022.
Looking ahead, market expectations, based on electricity futures prices, indicate that generation costs could fall further to between $80 and $90/MWh by 2030. This reduction is largely attributed to the rapidly expanding capacity and decreasing costs of battery storage technologies.
“As battery costs continue to fall and gas technology costs rise, batteries are increasingly becoming the preferred flexible generation technology in the near term.”
— Paul Graham, CSIRO Chief Energy Economist and GenCost Project Leader
This shift means that lower-cost batteries are actively reshaping electricity markets, intensifying competition with traditional gas peaking generation and contributing to reduced evening peak prices. Conversely, the report notes that rising global demand for gas turbines, particularly from US data centres, is driving up costs for gas-based technologies.
Solar and Wind to Dominate by 2050
The GenCost 2025-26 report projects that solar PV and onshore wind will form the backbone of Australia’s future electricity system, supplying a remarkable 93% of the nation’s electricity by 2050 under a net-zero emissions scenario. This will be supported by hydro, storage, transmission, and flexible generation sources like gas and hydrogen for critical firming capacity, although gas technologies are expected to contribute only around 3-7% of generation by 2050.
For homeowners considering renewable energy, this long-term outlook reinforces the value of investing in solar and battery systems. While the federal government’s Cheaper Home Batteries Program offers upfront discounts, the inherent economic advantages of these technologies are becoming increasingly clear. For more details on current incentives, refer to our guide on Home Battery System Costs in Australia 2026: A Complete Guide to Prices & Reduced Rebates.
The Cost of Transition and Long-Term Outlook
The report acknowledges that while near-term generation costs are falling, the long-term transition to a net-zero system will involve significant investment in new infrastructure. By 2050, all new electricity generation technologies are projected to cost more than $100/MWh as ageing assets are replaced across the system. This includes the costs associated with firming and transmission required for a renewables-dominated grid, with an estimated generation cost of $125/MWh for a mostly solar, wind, and battery-based system by 2050.
This highlights the critical importance of strategic planning and investment in the energy sector to ensure a reliable and affordable transition. Households can play a significant role by maximising their solar self-consumption and exploring smart energy management strategies. Further insights into optimising your solar investment can be found in our guide: Maximise Your Solar Savings in Australia 2026: Unlock $1,500+ Annually with Smart Strategies.
Projected Electricity Generation Costs (Excluding Transmission) by 2050
| Technology Category | Estimated Cost (AUD/MWh) |
|---|---|
| Solar PV & Onshore Wind (firmed by storage) | $120 - $130 (wholesale) |
| All new generation technologies | >$100 |
| New Black Coal | $107 - $182 |
This ongoing cost reduction and the clear economic advantage of renewables underscore Australia’s commitment to a cleaner, more affordable energy future. The GenCost 2025-26 report provides a robust economic foundation for the continued rollout of solar and battery solutions across the country.