IEA: China's electrolyser cost edge narrows for full projects
IEA analysis finds Chinese alkaline electrolysers cost $500–1,100 per kW versus $1,900–2,500 elsewhere, but project-level advantages shrink when installation is included.
What you need to know
The IEA estimates Chinese alkaline electrolysers cost $500–1,100 per kW in 2025, compared with $1,900–2,500 elsewhere. China holds about two-thirds of installed electrolysis capacity and nearly 70% of manufacturing capacity. The agency says the cost advantage narrows when complete project costs, including engineering and construction, are considered.
- Global installed electrolysis capacity reached 4 GW in 2025, up from nearly 300 MW five years earlier.
- China accounts for about two-thirds of installed capacity and capacity with a final investment decision.
- Chinese stack manufacturing costs average nearly 60% below advanced-economy costs, but full project comparisons show a narrower gap.
Manufacturing scale and cost gap
The International Energy Agency analysis, published on 15 October 2026, puts worldwide installed electrolysis capacity at 4 GW in 2025, compared with nearly 300 MW five years earlier. China represents about two-thirds of both installed capacity and capacity with a final investment decision, and holds nearly 70% of manufacturing capacity.
The IEA estimates 2025 alkaline-electrolyser capital costs of $500–1,100 per kW in China versus $1,900–2,500 elsewhere. Chinese manufacturing capacity was 35 GW per year, against domestic demand below 2 GW, creating intense competition and some bids below full cost. The agency attributes Chinese stack manufacturing costs, nearly 60% below advanced-economy levels, to materials, supply chains and scale.
Project-level costs narrow the advantage
The IEA says the apparent cost advantage narrows when complete projects are considered. More than half of project capital cost relates to engineering, construction, procurement and contingencies that depend on location, while stack components contribute roughly 15–20%.
The analysis adds that these manufacturing comparisons do not guarantee equivalent installed costs abroad, because project costs vary by location.
Does China's low electrolyser manufacturing cost translate directly to lower installed project costs abroad?
The IEA says the advantage narrows for complete projects. More than half of project capital cost depends on location-specific engineering, construction and procurement, and manufacturing comparisons do not ensure equivalent installed costs abroad.
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