IRENA Reveals: Renewables Have Saved the World $467 Billion in Fossil Fuel Costs

The renewable energy industry has just notched its strongest year ever. According to the International Renewable Energy Agency’s latest Renewable Power Generation Costs in 2024 report, clean power sources have not only grown at a record-breaking pace but have also cemented their status as the cheapest form of electricity in the world.

This shift is not just about protecting the environment. Renewables are now proving to be the more brilliant economic choice, helping to avoid an estimated $ 467 billion in fossil fuel costs last year alone. Advances in technology, increasingly competitive supply chains, and the power of scaling have all accelerated this momentum. At the same time, complementary breakthroughs such as large-scale battery storage are reshaping the financial logic of power generation.

Image Credit: IRENA

In 2024, global renewable capacity additions reached 582 gigawatts. That represents a nearly 20 percent increase over 2023 and the single most significant annual jump ever recorded. Solar PV and onshore wind led the charge, supported by robust supply chains and strong government policies. Variable renewables, such as wind and solar, dominated new installations, highlighting their growing centrality to the world’s electricity mix.

“The global energy system is undergoing a profound transformation, with renewables accounting for an increasing share of power generation,” says Francesco La Camera, Director-General of IRENA, in its RPGC report. 

Francesco La Camera, Director-General of IRENA

“In 2024 alone, renewables avoided an estimated US$467bn in fossil fuel costs, demonstrating not only their cost-efficiency but also their strategic value for energy security and economic stability. 

“As battery storage and digital solutions evolve and scale up, their role in enabling grid integration, improved economics and larger deployment of renewables will only grow in importance. 

“Nevertheless, short-term risks remain. Geopolitical tensions, supply chain bottlenecks and trade-related barriers threaten to disrupt further cost reductions.”

When measured by the levelised cost of electricity, renewables outcompeted fossil fuels almost across the board. Ninety-one per cent of newly commissioned utility-scale renewable projects delivered electricity at a lower price than even the lowest-cost fossil fuel option.

The cheapest source of energy in 2024 was onshore wind, with a global average cost of just $ 0.034 per kilowatt-hour. Solar PV followed closely at 0.043, with hydropower coming in at 0.057.

Francesco La Camera, Director-General of IRENA

Looking back further, the reductions are even more striking. Since 2010, the total installed cost of solar PV has fallen to $691 per kilowatt, onshore wind to $1,041, and offshore wind to $2,852.

There were some modest cost increases last year. Solar PV edged up by 0.6 per cent, onshore wind by 3 per cent, offshore wind by 4 per cent, and bioenergy by a sharper 13 per cent. But these were offset by dramatic declines elsewhere. Concentrated solar power dropped by 46 per cent, geothermal by 16 per cent, and hydropower by 2 per cent. Perhaps most striking of all, the cost of battery storage has decreased by 93 per cent since 2010, falling from more than $2,500 per kilowatt-hour to just $192 in 2024.

Image Credit: IRENA

Not every market looks the same. For onshore wind, China and Brazil led the pack with average generation costs of just $0.029 and $0.030 per kilowatt-hour, both below the global average. For solar PV, China again came out on top with 0.033, followed closely by India at 0.038. Offshore wind told a slightly different story, with Asia averaging 0.078 compared to Europe’s 0.080.

By 2029, IRENA expects the total installed cost for solar PV to decrease further to $388 per kilowatt, for onshore wind to reach $861, and for offshore wind to fall to $2,316. Long-term declines will be powered by technological improvements and increasingly mature supply chains.

Still, the report warns that the short term could bring turbulence. Trade tariffs on renewable components, supply chain bottlenecks, and ongoing shifts in China’s vast manufacturing sector could all temporarily nudge costs back up. Even so, the global trajectory is clear: clean energy is cheaper, faster to build, and more resilient than its fossil fuel rivals.