Renewables outshine fossil fuels in 2024, cut $57 bn in costs: Report
Renewable energy
technologies continued to outcompete
fossil fuels
on cost in 2024, with global savings from avoided fossil fuel use estimated at $ 57 billion, according to the International Renewable Energy Agency (
IRENA
). The agency's latest Renewable Power Generation Costs report shows that 91% of new renewable capacity commissioned last year was more cost-effective than the cheapest fossil fuel options.
Cost advantage widens; solar and wind lead
In 2024, onshore wind projects had the lowest average cost of new renewable power at $ 0.034/kWh, while solar photovoltaic (PV) projects averaged $ 0.043/kWh. These rates made solar PV 41% cheaper and onshore wind 53% cheaper than the lowest-cost fossil fuel alternatives. The year saw the addition of 582 gigawatts of renewable capacity.
'The cost-competitiveness of renewables is today's reality,' said IRENA Director-General Francesco La Camera. 'Looking at all renewables currently in operation, the avoided fossil fuel costs in 2024 reached up to $ 467 billion.'
Financing and grid remain key constraints
Despite the cost advantages, IRENA flagged persistent challenges in deploying renewables at scale. The agency pointed to rising financing costs, geopolitical tensions, trade tariffs, and grid bottlenecks—particularly in G20 and emerging markets—as potential headwinds.
'This progress is not guaranteed,' La Camera added. 'To safeguard the gains of the energy transition, we must reinforce international cooperation, secure open and resilient supply chains, and create stable policy and investment frameworks—especially in the Global South.'
Structural barriers impact Global South
IRENA's report highlights how higher capital costs in the Global South inflate the levelized cost of electricity (LCOE). For instance, while the generation cost of onshore wind in both Africa and Europe was around $ 0.052/kWh in 2024, financing costs made up a significantly higher share in Africa. The agency assumed cost of capital at 3.8% in Europe and 12% in Africa.
'Clean energy is smart economics – and the world is following the money,' said UN Secretary-General António Guterres. 'Leaders must unblock barriers, build confidence, and unleash finance and investment.'
Storage, AI, and hybrid systems improving performance
IRENA also reported that battery energy storage system (BESS) costs have dropped by 93% since 2010, reaching $ 192/kWh for utility-scale systems in 2024. Alongside hybrid systems that combine solar, wind and storage, AI-enabled digital tools are helping improve asset performance and grid responsiveness.
However, integration costs due to grid connection delays and permitting continue to hamper deployment. IRENA warned that without major investment in digital infrastructure and grid modernisation, emerging markets may not realise the full potential of renewables.
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