IRENA report: 91% of new renewable projects now cheaper than fossil fuels
The year 2024 was a milestone in the global energy transition. Renewable energy didn’t just make gains, it shattered records and established itself as the undisputed economic powerhouse of the power generation world.
According to the International Renewable Energy Agency (IRENA), renewable energy additions surged to 582 gigawatts (GW) in 2024, a nearly 20% increase over 2023, the highest ever recorded. This is more than a statistical win; it signals a profound shift in how the world generates electricity, and why.
The cost edge
Renewables are no longer just cleaner, they're cheaper. The report reveals that 91% of all new utility-scale renewable projects in 2024 produced electricity at a lower cost than the cheapest fossil fuel alternative. That statistic alone redefines the market landscape.
Leading the pack was onshore wind, which delivered electricity at a global average levelised cost of electricity (LCOE) of $0.034/kWh. Solar PV followed closely at $0.043/kWh, and hydropower at $0.057/kWh. These figures highlight how far renewables have come, with onshore wind and solar PV now deeply entrenched as the most cost-effective sources of new power worldwide.
While some technologies saw slight cost increases, solar PV LCOE rose 0.6%, onshore wind by 3%, offshore wind by 4%, these shifts are within natural market fluctuations and reflect a maturing global supply chain, not a reversal of progress.
Storage supercharges the transition
Battery storage costs continued their steep decline, falling 93% since 2010, down to $192/kWh in 2024. This drop is crucial. It enables grid operators to integrate more variable renewables like wind and solar while ensuring stability and reliability.
As more hybrid systems combining renewables and storage come online, the energy landscape is beginning to reflect a new reality: clean power can be available not just when the sun shines or the wind blows, but whenever it's needed.
Asia at the helm
Asia was the epicenter of this explosive growth, adding 413 GW of renewable capacity, 71% of the global total. Chinaalone was responsible for over 276 GW of new solar and 79 GW of new wind. The scale of China’s expansion dwarfs any other country’s efforts, but others aren’t standing still.
India, the United States, Brazil, and Germany also made major strides, collectively demonstrating that the shift toward renewables is no longer regional, it’s global.
Still, the gap between current deployment and what’s needed to meet climate goals remains vast. IRENA notes that the world needs to reach 11,000+ GW of renewable capacity by 2030 to stay on track with the COP28 “UAE Consensus” to triple renewables.
Beyond the price
Renewables are proving their worth not only in cost savings but in resilience. IRENA estimates that in 2024 alone, renewables avoided $467 billion in fossil fuel costs. That’s nearly half a trillion dollars redirected away from volatile global fuel markets and toward energy independence.
In an era marked by energy shocks, war, and trade disruptions, this economic resilience adds a strategic layer to the renewable advantage. Countries investing in renewables aren’t just going green—they’re insulating themselves from geopolitical risk.
Barriers remain
Despite the impressive cost performance, challenges remain. Access to finance is still a hurdle in many emerging markets. The cost of capital (WACC) varies widely by region, influencing whether a project is bankable or stalled. Grid infrastructure, especially in rapidly growing markets, is struggling to keep pace with new capacity.
Permitting delays, supply chain vulnerabilities, and rising protectionism, such as new tariffs on renewable components, threaten to slow the progress made. IRENA warns that short-term price stability shouldn’t be taken for granted. Without strong policy and investment signals, the renewable cost advantage could falter.
What’s next
The path forward will rely heavily on continued learning and scale. Cost reductions are expected to continue through 2030, especially in solar PV, where total installed costs could fall to $388/kW, and onshore wind to $861/kW. Offshore wind is projected to drop below $2,316/kW.
IRENA emphasises the growing role of digitalisation, hybrid systems, and smart grid technologies in ensuring that renewables not only grow but become fully integrated into modern power systems.
