The renewable tipping point

AN important tipping point is approaching and decision time is here. The tipping point is the cost at which battery storage of a single unit of electricity becomes competitive with grid-connected power generation systems. Once we cross that point everything changes, and we could be less than a couple of years away now. By one estimate, the total cost of a utility-scale Battery Energy Storage System (BESS) was almost $2,571 per kWh of electricity back in 2010. By now, this has fallen to $192, more than a 90 per cent reduction. Estimates vary, but some of the ones I have looked at say once this figure crosses $100 we would have passed a critical threshold. Past that point it will be cheaper to generate electricity using solar farms and store it in large utility-scale batteries than it is to generate it in large power plants that burn oil or gas. Meaning one large solar farm connected to a massive battery will credibly be able to replace one large power generation plant, to provide round-the-clock electricity either to the national grid, or to a micro grid. Another report looks at actual projects coming online these days and notes that the price of an all-in BESS project has dropped to $125 in some places as of late 2025. This means projects are now being commissioned that have $75 per kWh for core equipment and $50 for installation and grid connection. Some experts watching the battery revolution happen in real time are reporting that in China the cost of deploying some of the industry’s best kinds of batteries has already reached $75 as of 2025 and is continuing to drop. This means the tipping point may be a lot closer than many of the best estimates suggest. With batteries, it will be possible to generate, store and use electricity round the clock using solar only. This is the utility-scale battery cost we are talking about, massive batteries that can replace entire power plants. Once their cost breaches the critical threshold they become feasible for housing colonies, neighbourhoods and grid supply as well. After that, there is no stopping the revolution. It was the same with solar panels. The critical threshold to be crossed with those was called “grid parity”, where the cost of one unit of electricity produced via a fully installed and functioning solar generation system would be equal to the cost of the same unit procured from the grid. We crossed that threshold somewhere in the middle of the 2010s. The revolution took off in earnest in Pakistan after 2020 when the inflationary fire of the following years sent the price of electricity spiralling upwards, making solar more and more viable. In the years 2015 to 2020, this price was relatively stable and solar offtake was slower as a result. But now a second boost is about to come, and by some standards, may already have arrived. Once batteries cross the same threshold the critical weakness in solar renewable energy is plugged. Up until now the biggest weakness in solar power generation has been that it provides electricity only while the sun shines. But batteries change that. Now it will be possible to generate, store and use electricity round the clock using solar only. And the cost of setting up such a system will be competitive, and eventually below the cost of power purchased from the grid. As the threshold approaches more and more people are asking themselves the critical question: should I get a battery? Based on a quick calculation I did on my own bills and solar net-metering benefit since it began, my short answer is “not yet”. As per my calculations the cost of a 10kWh battery with a payback period of 10 years becomes competitive once the buyback rate of home solar electricity drops below Rs30 per unit. For those who have active generation licences, this threshold has not yet been crossed. But if the government moves to offering Rs11 only for solar rooftop electricity, batteries will not only become viable but also a necessity. Selling your own electricity to the state for Rs11 and buying theirs for Rs50, or 60 or sometimes even 70 will make no sense at that point. A lot of batteries currently on the market may not have enough charge cycles to be able to last 10 years. That is a very long payback period and most batteries on the market today could fizzle out midway through it. And even that system, with 10 units generation and storage capacity, will not take you off the grid altogether. It will comfortably cover you during the hours of peak billing, allowing you to use your units when you need them the most. For the rest of the day you will still be dependent on the grid. Complete off-grid viability could take more than five years. Until then, we will move towards hybrid systems, using a combination of own generation, storage and grid supply to balance our consumption and reduce the peak billing burden. Capacity payments, which are the largest cost burden on our power system, will start declining from 2027 onward and diminish to their lowest point by 2035, according to data from Nepra’s annual reports. This will help power tariffs stabilise. But devaluations of the rupee could reverse these gains easily, depending on how irresponsible the government is in safeguarding macroeconomic stability. So the outlook for battery storage might take a little longer to cross viability as the grid finds its footing, and quality issues will plague the sector for a while as well. Substandard batteries will impose their own costs on consumers. But the fact that the threshold is drawing near is undeniable. Once crossed all manner of business models suddenly become viable and the grid will struggle for its own viability, mainly because it will no longer have a captive consumer base upon whom to offload the costs of its myriad dysfunctions. At that point the revolution will have attained unbreakable momentum. The writer is a business and economy journalist. khurram.husain@gmail.com X: @khurramhusain Published in Dawn, February 19th, 2026

By none@none.com (Khurram Husain)