More than 90 per cent of renewable projects now cheaper than fossil fuel alternatives - report
Ideally, the data underscores a dramatic shift in the economics of power generation, with clean energy not only competing with but surpassing fossil fuels on cost.
Approximately 91 per cent of newly commissioned renewable energy projects, such as wind and solar, delivered electricity at a lower cost than the cheapest fossil fuel options in 2024.
According to the International Renewable Energy Agency (IRENA), the development maintains the renewables’ cost leadership in global power markets.
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Ideally, the data underscores a dramatic shift in the economics of power generation, with clean energy not only competing with but surpassing fossil fuels on cost.
“In 2024, solar photovoltaics (PV) were, on average, 41 per cent cheaper than the lowest-cost fossil fuel alternatives, while onshore wind projects were 53 per cent cheaper,” reads the 2025 Renewable Power Generation Costs report.
“Onshore wind remained the most affordable source of new renewable electricity at $0.034 (Sh4.4)/kWh, followed by solar PV at $0.043 (Sh5.6)/kWh.”
In comparison, back in 2010, onshore wind energy was 29 per cent more expensive than fossil fuel sources, while solar photovoltaics (PV) were approximately 710 per cent more costly.
The agency attributes the cost declines to technology improvement, competitive supply chains and economies of scale.
The report also notes that battery storage costs have dropped by 93 per cent since 2010.
“From 2010 to 2024, the total installed cost of utility-scale battery energy storage systems (BESS) dropped by 93 per cent, falling from $2 571 (Sh332,300)/kWh to $192 (Sh24,816)/kWh,” the report reads.
The decline is attributed to rapid expansion of manufacturing capacity, advancements in materials efficiency, and optimisation of production processes.
Nevertheless, the agency says the global addition of 582 gigawatts of renewable capacity last year helped avoid fossil fuel usage valued at approximately $57 billion (Sh7.4 trillion).
In general, the use of renewables during the year helped avoid $467 billion (Sh60.4 trillion) in fossil fuel costs.
The agency reiterates that this reinforces the renewables’ role 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.
Over the next five years, the agency paints a positive picture of increased production from renewable sources.
However, it anticipates risks to the outlook.
“While long-term cost reductions are expected from continued technological learning and supply chain maturity, emerging geopolitical risks, notably trade tariffs on renewable components and materials and Chinese manufacturing sector dynamics, could raise costs in the short term.”
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