IRENA: 91% of new projects will be cheaper than fossil fuels in 2024

In 2024, renewables consolidated their cost leadership in the global electricity market: 91% of new projects were found to be more cost-effective than fossil fuel alternatives. IRENA's new report on electricity generation costs confirms solar PV and onshore wind as the price-leading technologies, with average levelized cost of energy (LCOE) values of $0.043/kWh and $0.034/kWh , respectively. The expansion of 582 GW of new renewable capacity avoided fossil fuel consumption by $57 billion in a single year, while overall savings from operating renewables reached up to $467 billion. These benefits are clear, but they require more robust networks and accessible capital.

Why the numbers matter: The overall cost picture

IRENA's analysis certifies that renewables' competitive advantage is not episodic but structural: technological innovation, mature supply chains, and economies of scale have driven costs down, with onshore wind remaining the cheapest source of new capacity, followed closely by solar. In 2024, PV at $0.043/kWh and onshore wind at $0.034/kWh have surpassed the cheapest fossil fuel options, while reducing exposure to international fuel volatility and improving energy security. The most striking finding is that 9 out of 10 projects undercut fossil fuels on price; furthermore, the addition of 582 GW has translated this cost advantage into $57 billion in avoided fossil fuel use in 2024. Considering all renewables in operation, avoided fossil fuel costs reach up to $467 billion , a sign that the "clean" business case is stronger than ever.

The challenges to be solved: networks, capital, and regional differences

The path is not without obstacles. IRENA warns of short-term risks related to geopolitical tensions, tariffs, and commodity bottlenecks , which could temporarily increase costs. Slow permits, limited network capacity, and BOS costs weigh on Europe and North America; conversely, Asia, Africa, and South America could see sharper declines thanks to high learning rates.

Even more impactful is the cost of capital : IRENA projects an average cost of 3.8% in Europe versus 12% in Africa , a differential that inflates the LCOE in emerging markets. The priority therefore becomes unlocking grid connections, accelerating the authorization process, and reducing the cost of financing with bankable PPAs and stable policies. Storage also provides help: utility-scale BESS systems have reduced costs by 93% since 2010 (down to $192/kWh in 2024), facilitating the integration of wind and solar.