The majority of newly commissioned renewable energy is more cost-effective for electricity generation than most fossil fuels worldwide, according to a new report by the International Renewable Energy Agency (IRENA).
The report shows that the costs of renewable technologies have been decreasing since 2010 due to technological advances and economies of scale.
Last year, 582 gigawatts of new renewable energy capacity, such as hydropower, solar, wind and geothermal, was added globally. This was nearly 20% higher than in 2023. Around 91% of the utility-scale projects commissioned were more cost effective than fossil fuel alternatives.
Solar photovoltaic was 41% cheaper on average than the lowest-cost fossil fuel alternatives, such as gas, while onshore wind projects were 53% cheaper. The cost of battery energy storage systems has declined by 93% since 2010.
Commenting on the report, UN Secretary General, António Guterres says: “Renewables are rising, the fossil fuel age is crumbling, but leaders must unblock barriers, build confidence, and unleash finance and investment.”
However, the report warns that while continued cost reductions are expected as technologies mature and supply chains strengthen, short-term challenges remain. Geopolitical shifts including trade tariffs, raw material bottlenecks, and evolving manufacturing dynamics, particularly in China, pose risks that could temporarily raise costs.
Higher costs are also likely to persist in Europe and North America, driven by structural challenges such as regulatory delays, limited grid capacity, and higher balance-of-system expenses.
In contrast, regions like Asia, Africa, and South America, with stronger learning rates and high renewable potential, could see pronounced cost declines.
IRENA is the lead global intergovernmental agency for energy transformation with membership comprising 169 countries and the EU. The UK has been a member since 2009.
For the full report, check out: Renewable Power Generation Costs in 2024
