Domestic Green Hydrogen Cost Drops to $2/kg, Grid Parity in Sight
In Q1 2028, domestic green hydrogen average production cost dropped to 15 yuan/kg ($2/kg), down 40% from 2025. Electrolyzer equipment costs continue declining, with alkaline electrolyzers achieving 100% domestication.
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In Q1 2028, domestic green hydrogen average production cost dropped to 15 yuan/kg ($2/kg)—an important milestone for the green hydrogen industry.
Green hydrogen cost reductions mainly come from three drivers: First, electrolyzer equipment costs continue declining, with alkaline electrolyzer unit investment cost dropping below 1,500 yuan/kW, over 60% lower than 2022; second, renewable energy (mainly wind and solar) generation costs continue decreasing, with wind-generated hydrogen projects in Xinjiang and Inner Mongolia seeing electricity prices drop below 0.15 yuan/kWh; third, scale effects and process optimization improved electrolysis efficiency by approximately 8%.
Alkaline electrolyzers have achieved 100% domestication, with PEM electrolyzer domestication rate exceeding 85%. This means China has broken free from "bottleneck" constraints in key equipment on the hydrogen track.
Industry analysis suggests that when green hydrogen cost drops below 10 yuan/kg, it will form competitive advantage against gray hydrogen in industrial decarbonization. This target is expected to be achieved in 2029-2030.
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