Renewable energy projects continued to outperform fossil fuels on cost in 2024, with 91% of new clean energy developments proving more economical than their fossil-based counterparts, the International Renewable Energy Agency (IRENA) said in a report released on Tuesday.
The findings, published in Renewable Power Generation Costs in 2024, indicate that technology improvements, maturing supply chains, and economies of scale have helped maintain renewables’ cost edge. According to IRENA, onshore wind remained the lowest-cost source of new electricity, while solar photovoltaic (PV) projects were, on average, 41% cheaper than the most affordable fossil fuel options. Onshore wind projects were 53% cheaper.
“The cost-competitiveness of renewables is today’s reality,” IRENA Director-General Francesco La Camera said. “Looking at all renewables currently in operation, the avoided fossil fuel costs in 2024 reached up to $467 billion.”
The global addition of 582 gigawatts (GW) of renewable capacity in 2024 helped avoid fossil fuel use worth approximately $57 billion, the agency said. Beyond cost savings, renewables are also credited with enhancing energy security by reducing reliance on volatile international fuel markets.
Despite long-term trends favouring renewables, the report cautioned that short-term risks remain. Rising geopolitical tensions, trade barriers, and raw material bottlenecks – particularly those affecting China’s supply chains – could temporarily increase costs.
Costs are expected to remain higher in Europe and North America due to structural issues such as permitting delays, limited grid capacity, and elevated balance-of-system costs. In contrast, regions such as Asia, Africa, and South America may see steeper cost declines owing to higher renewable potential and faster learning rates.
United Nations Secretary-General António Guterres called for further international action to sustain the transition. “Clean energy is smart economics – and the world is following the money,” he said. “Leaders must unblock barriers, build confidence, and unleash finance and investment.
La Camera added, “This achievement is the result of years of innovation, policy direction, and growing markets. However, this progress is not guaranteed… The transition to renewables is irreversible, but its pace and fairness depend on the choices we make today.
