Renewables are leading the way on cost in global power markets, with 91% of new clean energy projects now cheaper than fossil fuel alternatives, a report has revealed.
The International Renewable Energy Agency (IRENA) report said renewables maintained their price advantage over fossil fuels, with cost declines driven by technological innovation, competitive supply chains, and economies of scale.
IRENA found that in 2024, solar photovoltaics were, on average, 41% cheaper than the lowest-cost fossil fuel alternatives, while onshore wind projects were 53% cheaper.
Onshore wind remained the most affordable source of new renewable electricity, followed by solar PV, according to the report, entitled Renewable Power Generation Costs in 2024.
The addition of 582GW of renewable capacity in 2024 led to significant cost savings, avoiding fossil fuel use valued at about USD $57bn. Notably, 91% of new renewable power projects commissioned last year were more cost-effective than any new fossil fuel alternatives, the report revealed.
IRENA said that as well as having a cost advantage, renewables also limit dependence on international fuel markets and help to improve energy security.
However, 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, the report warned.
Higher costs are likely to persist in Europe and North America, driven by structural challenges such as permitting delays, limited grid capacity, and higher balance-of-system expenses. In contrast, regions such as Asia, Africa, and South America, with stronger learning rates and high renewable potential, could see pronounced cost declines.
United Nations Secretary-General António Guterres said: “Clean energy is smart economics – and the world is following the money. Renewables are rising, the fossil fuel age is crumbling, but leaders must unblock barriers, build confidence, and unleash finance and investment.”
IRENA director-general Francesco La Camera added: “The cost-competitiveness of renewables is today’s reality. Looking at all renewables currently in operation, the avoided fossil fuel costs in 2024 reached up to $467bn. New renewable power out-competes fossil fuels on cost, offering a clear path to affordable, secure, and sustainable energy.
“This achievement is the result of years of innovation, policy direction, and growing markets. However, this progress is not guaranteed. Rising geopolitical tensions, trade tariffs, and material supply constraints threaten to slow the momentum and drive up costs.
“To safeguard the gains of the energy transition, we must reinforce international co-operation, secure open and resilient supply chains, and create stable policy and investment frameworks – especially in the Global South. The transition to renewables is irreversible, but its pace and fairness depend on the choices we make today.”