Schneider Electric: Solar, Batteries Could Cut Electricity System Costs 40%

Solar panels and battery storage could reduce total electricity system costs by up to 40% by the 2030s if deployment is coordinated with growing electricity demand, according to new research from Schneider Electric. Published on 10 November 2026, the Schneider Electric Research Institute (SERI) report examined 40,500 scenarios covering solar, battery and electricity grid costs. The modelling found that optimised systems could already deliver savings of approximately 10% under current global-average technology costs, with potential economic benefits reaching 0.8% of global GDP by the 2030s.

The report, System Costs of Electricity: A New Baseline for the 21st Century Economy, examines whether widespread adoption of distributed energy resources, particularly rooftop solar and batteries, increases or reduces the overall cost of electricity. Its findings suggest that solar and storage deployment can lower system-wide costs, provided electrification expands enough to keep existing grid infrastructure used efficiently.

 

Solar and Battery Costs Could Fall to $94 per MWh

 

Schneider Electric's modelling compares the combined costs of distributed solar, battery storage and centralised electricity infrastructure against a benchmark of $160 per megawatt-hour (MWh). Under current global-average installation costs, an optimised electricity system could reduce this to approximately $145 per MWh. With projected solar and battery cost reductions during the 2030s, the model estimates that total system costs could decline further to $94 per MWh.

These savings depend on both technology costs and electricity demand. Batteries can reduce peak grid consumption by storing solar electricity for use during periods of higher demand, while additional electrified activities can improve utilisation of existing infrastructure. The research estimates that the resulting efficiency improvements could generate economic benefits equivalent to approximately 0.8% of global GDP by the 2030s, compared with around 0.1% under current conditions.

 

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Uncoordinated Battery Deployment Could Increase Electricity Costs

 

The research identifies battery configuration and deployment timing as major factors influencing electricity costs. Under current global-average conditions, poorly configured battery systems could push total system costs up to 35% above the existing benchmark. The findings indicate that battery storage does not automatically produce system-wide savings, particularly where installed capacity, discharge duration and electricity demand are poorly matched.

The order of deployment is equally important. If electricity demand expands faster than solar and storage capacity, additional generation and grid reinforcement may be required. Conversely, rapid adoption of rooftop solar and batteries without corresponding demand growth can leave existing network infrastructure underutilised. Schneider Electric's modelling indicates that coordinating both developments produces lower long-term costs than allowing either to expand significantly ahead of the other.

 

US Solar Installation Costs Remain a Barrier

 

The report identifies significant regional differences in the economics of distributed solar and batteries. Under current US residential solar installation costs, which Schneider Electric estimates are approximately three times the global average, optimised total electricity system costs could reach $191 per MWh. This is roughly 20% above the report's $160 per MWh benchmark, contrasting with the potential savings identified under global-average conditions.

The findings highlight the importance of reducing installation expenses, financing barriers and other non-equipment costs. While continued reductions in solar panel and battery prices could improve project economics, regional deployment costs will influence how quickly system-wide savings become achievable.

 

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Electrification and Grid Flexibility Become Policy Priorities

 

Schneider Electric identifies three priorities for governments and electricity regulators: reducing peak demand, coordinating renewable energy deployment with electrification, and strengthening supply chains. Measures include time-of-use electricity tariffs, demand-based pricing, incentives for combined solar and battery installations, and policies encouraging the adoption of electric vehicles and heat pumps. Expanding electricity consumption through transport, buildings, industry and data centres could help distribute fixed network costs across greater electricity demand.

Laurent Bataille, Executive Vice President of Europe Operations at Schneider Electric, said, "Ultimately, batteries are making solar much more interesting. But the whole system only becomes cheaper if these work in harmony with one another."

Esther Finidori, Chief Sustainability Officer at Schneider Electric, added, "This research shows that sustainability and affordability can reinforce each other, but coordination is critical."

 

Lower Electricity Costs Depend on Deployment Conditions

 

The research challenges the assumption that widespread rooftop solar adoption necessarily increases costs for electricity networks. However, the projected 40% reduction represents an optimised modelling scenario rather than a guaranteed reduction in household electricity bills.

Achieving lower system costs will require continued declines in solar and battery installation expenses, growing electrified demand and better coordination between distributed generation and grid operations. The findings provide a basis for policymakers and utilities to evaluate how renewable energy expansion can improve electricity affordability without transferring unnecessary costs to other consumers.

 

Source: Schneider Electric