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The International Renewable Energy Agency (IRENA) report highlights renewables as the most cost-effective option for new electricity generation in 2024
Renewables surpassed fossil fuels in cost-effectiveness due to technological advancements and economies of scale
With a 19.8 per cent increase in renewable capacity, significant cost savings were achieved
This highlights renewables' role in energy security and economic stability
A new report by the International Renewable Energy Agency (IRENA) revealed that renewable energy sources continue to be more cost-effective than fossil fuels. This price advantage is primarily due to technological advancements, competitive supply chains and economies of scale.
In 2024, renewables helped cut $467 billion in fossil fuel costs. This demonstrated the role of renewable energy sources not only as the lowest-cost source of new power but also as a key driver of energy security, economic stability and resilience in a volatile global energy landscape.
The addition of 582 gigawatts of renewable capacity in 2024 — a 19.8 per cent increase over additions in 2023 led to significant cost savings, avoiding fossil fuel use valued at about $57 billion, the report noted.
Asia increased its renewable energy capacity by 413.2 GW. China was responsible for 61.2 per cent of the world's photovoltaic additions, totaling 276.8 GW, and 69.4 per cent of new wind power installations, amounting to 79.4 GW.
Other notable contributors included the United States, India, Brazil and Germany, highlighting the continued global diversification of renewable investment.
On a levelised cost of electricity basis, renewables remained the most cost-competitive option for new electricity generation in 2024, the authors of the report observed. Around 91 per cent of newly commissioned utility-scale renewable capacity were delivering power at a lower cost than the cheapest, newly installed fossil fuel-based alternative, they added.
According to IRENA’s cost analysis, new large-scale onshore wind projects continued to be the most cost-effective source of renewable electricity in 2024, being 53 per cent less expensive than the cheapest fossil fuel options. Solar photovoltaics (PV) were on average 41 per cent cheaper.
Onshore wind cost $0.034 / kWh, followed by solar PV at $0.043/kWh and new hydropower ($0.057/kWh).
The total installed costs (TIC) declined sharply across major renewable technologies between 2010 and 2024. TIC fell to $691/kW for solar PV, $1,041 / kW for onshore wind and $2,852 / kW for offshore wind by 2024.
Technological advances beyond generation were also responsible for improving the economics of renewables. The cost of battery energy storage systems (BESS) has declined by 93 per cent since 2010, reaching $192 / kWh for utility-scale systems in 2024.
This sharp decline has been driven by manufacturing scale-up, improved materials efficiency and optimised production processes, the authors noted. Utility-scale deployment is primarily dominated by lithium-ion batteries, especially those using lithium iron phosphate chemistries.
BESS installations are more frequently being situated alongside fluctuating renewable energy sources, particularly solar PV systems. This helps in providing peak shaving, frequency regulation and grid balancing. In 2024, the United States and China led global BESS growth, supported by national policy incentives and grid integration mandates.
Future cost declines will slow but remain significant in high-growth regions, the report showed. The total installed costs are projected to decline but at a slower pace, "as learning rates and economies of scale continue to drive efficiency gains", the researchers estimated.
Strong learning rates and high deployment sensitivity to costs, especially in Asia, Africa and South America, suggest that accelerated market growth could amplify cost reductions, the authors observed.
However, higher costs could persist in Europe and North America due to “reflecting structural factors such as permitting delays and higher balance-of-system costs”.
“After more than a decade of steep cost declines, solar and wind energy prices have begun to stabilise — a natural sign of market maturity. Technologies like solar PV and onshore wind are now widely deployed, with efficient and competitive supply chains,” stated Francesco La Camera, director-general, IRENA.
The authors highlighted the broader benefits of increased renewable energy integration. It is helping to shift fossil fuel generation to peak or residual demand, reducing thermal plant use and exposure to volatile fuel markets, the researchers wrote in the report.
By 2024, solar and wind comprised 46.4 per cent of global installed electricity generation capacity, significantly displacing coal and gas in key markets like China, the United States and the European Union, and reducing associated greenhouse gas emissions.
During a speech on July 22, 2025, United Nations Secretary-General António Guterres presented a persuasive and well-supported argument for the unavoidable shift from fossil fuels to renewable energy, highlighting the significant advantages it will offer to individuals and economies.
Final summary: The International Renewable Energy Agency (IRENA) report underscores the cost-effectiveness of renewable energy sources over fossil fuels for new electricity generation in 2024. Technological advancements and economies of scale have driven this shift, resulting in significant cost savings and enhanced energy security. With a 19.8 per cent increase in renewable capacity, renewables are pivotal in ensuring economic stability and resilience in a volatile global energy landscape.
