After capital costs for wind infrastructure hiked in the three previous financial years, 2025–26 could look a bit different.
This is the view of the CSIRO, which sees a 5 per cent drop in wind capital costs in this financial year. This follows a 35 per cent increase in 2022–23, an 8 per cent rise in 2023–24 and a 6 per cent hike in 2024–25.
“As the historical data indicates, onshore wind is one of the technologies which has been most impacted by recent global inflationary pressures,” CSIRO noted in its draft GenCost 2025–26 report.
“Onshore wind costs are showing tentative signs of stabilising after experiencing the largest increase in 2022–23.”
CSIRO suggested that near-term cost reductions for wind come from the “slow unwinding of inflationary pressures” that have “temporarily placed costs above the underlying cost curve”.
Wind capital costs have increased in recent years as large-scale solar and battery costs have gone the other way, with large-scale solar experiencing 8 per cent reductions in both 2023–24 and 2024–25, while large-scale, two-hour batteries experienced 20 per cent and 15 per cent cost declines across the same years, respectively.
Rystad Energy senior analyst David Dixon said that while the cost of building solar and batteries is getting more affordable as “the efficiency of battery and solar cells gets better over time”, wind turbines have been getting larger and more costly.
“Vestas, the biggest turbine supplier to the Australian market, was loss making for a period of time, and had to increase prices to get back in the black,” he told Energy.
“A few turbine commodity inputs went up in price as well, so the wind market has experienced a double whammy of cost inflation and the need to get back to profitability.”
Dixon noted that wind farms have also faced rising labour costs and service challenges.
“Because the turbines are bigger, you’re limited with the cranes you can use to lift the turbines up, meaning many wind farm developers are restricted to a narrower set of service providers,” Dixon said.
While Australia approved 6.9GW of onshore wind capacity in 2025, wind farms are getting larger, meaning approved capacity is high but the number of projects greenlit is low.
These metrics are flowing into the latter part of project development, with only two wind projects in the NEM (0.46GW) reaching a financial investment decision in 2025. This was down from 1.97GW in 2024.
Despite this, wind remains critical to Australia’s energy future, with 26GW of utility-scale wind capacity required by 2030 to meet emissions reduction targets, according to estimates from the Australian Energy Market Operator.
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