A new report from the International Renewable Energy Agency (IRENA) finds that with the right policies in place, the average costs for solar and wind power could decrease by between 26 percent and 59 percent by 2025. The report, titled The Power to Change: Solar and Wind Cost Reduction Potential to 2025, concludes that technology innovations, increased competition, pressure on supply chains and economies of scale could see by 2025 average electricity costs for solar PV fall by 59 percent, offshore wind by 35 percent, onshore wind by 26 percent and concentrated solar power by as much as 43 percent.

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“We have already seen dramatic cost decreases in solar and wind in recent years and this report shows that prices will continue to drop, thanks to different technology and market drivers,” said IRENA Director-General Adnan Z. Amin. “Given that solar and wind are already the cheapest source of new generation capacity in many markets around the world, this further cost reduction will broaden that trend and strengthen the compelling business case to switch from fossil fuels to renewables.”

Related: Solar and wind power are now cheaper than coal or natural gas in some markets

The report finds that by 2025, the global average cost of electricity from solar PV and onshore wind will be around five to six cents per kilowatt hour. The average utility-scale solar price in the United States has already fallen to five cents per kilowatt hour, according to a 2015 report from Lawrence Berkeley National Laboratory. Another study from the Berkeley Lab, also published last year, found that the price of wind energy in the United States averaged under 2.5 cents per kilowatt hour in 2014, an all-time low.

While advances in energy storage are being made, another new study from MIT finds that the falling cost of solar and wind could limit energy storage profitability unless the price of energy storage systems comes down along with solar and wind. Unless the price of energy storage systems is reduced, it could be more profitable to add more generating capacity from solar and wind and other renewables than to add more storage capacity.

+ The Power to Change: Solar and Wind Cost Reduction Potential to 2025

Via IRENA

Images via Engineers Journal and Wikipedia