Let’s take a fresh, corporate-level look at a transformative shift now underway in international energy markets: the striking cost advantage of renewables over fossil fuels. Based on recent data reported by the International Renewable Energy Agency (IRENA) and echoed by the United Nations (UN) through high-level commentary, our readers can see the numbers behind the narrative and understand what they mean for policy, investment, and business strategy.
A Record Year for Renewables
In 2024, more than 91% of newly commissioned renewable energy projects around the world produced power at a lower cost than even the cheapest newly built fossil fuel alternative. That’s a watershed moment in the economics of energy.
Renewables added 582 gigawatts (GW) of capacity during 2024, a roughly 20% increase over the prior year, translating into avoided fossil fuel spending estimated at US $57 billion.
Wind and Solar: Leaders of the Pack
Cost breakdowns are compelling:
Onshore wind delivered electricity at an average of US $0.034 per kWh, making it 53% cheaper than the cheapest fossil fuel options available.
Solar photovoltaic (PV) followed closely at US $0.043 per kWh, around 41% below fossil fuel benchmarks.
These figures reflect all-in generation costs such as capital expenditure, operations, and related expenses, though they exclude grid-level infrastructure costs, which remain a separate and important planning consideration.
Storage Costs Plummet
Battery storage plays a supporting role in enabling renewables to compete in variable generation environments. Since 2010, storage costs have dropped by about 93%, reducing one of the key integration barriers for intermittent sources like solar and wind. This dramatic decline allows renewable assets to dispatch more predictably and align with grid demand patterns.
The Broader Global Context
The UN Secretary General has called 2024 a turning point. Renewables made up 92.5% of new electricity generation capacity additions globally and accounted for 74% of generation growth.
Investment in renewables reached US $2 trillion, exceeding fossil fuel investment by about US $800 billion, a nearly 70% increase over the previous decade.
These shifts are not ideological; they represent the market reality that clean energy is now a compelling economic choice in many regions.
Scaling Ambitions vs. Current Planning
Despite the momentum, significant gaps remain. The COP28 goal to triple global renewable capacity to around 11.2 TW by 2030 is not on track. Under current national plans, the world will achieve only about half the necessary growth, leaving a shortfall of nearly 3.8 TW.
Annual investment must rise from roughly US $570 billion to US $1.5 trillion, while efficiency gains must double to meet decarbonization targets. The acceleration needed demands stronger public policy frameworks and deeper international collaboration.
Pressures on Progress
Several pressures threaten to slow this trajectory:
Geopolitical tensions, trade disputes, and raw material bottlenecks are threatening cost gains.
In certain regions — notably parts of North America and Europe — permitting delays, interconnection constraints, and rising balance-of‑system costs are dampening cost reductions seen elsewhere.
Still, compared to past years, the advantage of renewables remains clear and increasingly stable.
Strategic Implications for Stakeholders
For corporate leaders, investors, and policymakers, the emerging picture is clear: renewables are no longer a niche option; they are the default lowest-cost choice for new power generation.
For policymakers, the data argues strongly for accelerating permitting reform, enhancing market access, and ensuring supportive regulatory frameworks across all regions.
For developers and investors, the message is that wind and solar are not only environmentally responsible, they’re financially compelling in most markets.
For utilities, integrating large volumes of renewables with evolving storage solutions becomes a central operational issue. Controlled storage, demand response, and digital optimization strategies are mission-critical.
The Road Ahead: New Horizons in Renewables
Looking beyond power generation, markets for green hydrogen, e‑methanol, and ammonia are gaining momentum, supported by cheap renewable electricity. IRENA’s modeling shows these commodities can enhance industrial competitiveness and unlock export potential from resource-rich regions with low-cost clean power.
Simultaneously, next-generation geothermal energy, leveraging expertise from the oil and gas sector, could reduce costs by 80% by 2035, making it a viable dispatchable alternative to intermittent renewables in many locations.
Engaging with this data, stakeholders should recognize that while 2024 marked a tipping point, maintaining momentum requires intentional action across policy, finance, and technology.
Thank you for reading. Looking forward to any questions or strategic reflections you’d like to explore next.
References
- IRENA, Renewable Power Generation Costs in 2024 report (July 2025)
- Reuters, Around 90% of renewables cheaper than fossil fuels worldwide, IRENA says (July 2025)
- UN Secretary General speech summaries via Financial Times and Associated Press News (July 2025)
- IRENA and IEA analysis on renewable energy planning gaps (2024–2025)
- IRENA green hydrogen and ammonia trade report (June 2025)
- FT feature on geothermal cost reductions and oil sector technology convergence (2025)
