Renewables Outpace Fossil Fuels: Over 90% of New Green Energy Is Now the Cheaper Option, Study Finds

The global shift toward renewable energy has reached what experts are now calling a “positive tipping point.” That’s according to two major reports released on Tuesday by the United Nations. The key takeaway? Solar and wind power aren’t just sustainable options anymore; they’re the fastest and most cost-effective ways to add new energy capacity.

In 2024, the world added 582 gigawatts of renewable energy. That’s nearly 20 per cent more than in 2023 and marks the most significant annual jump ever recorded. Almost all new power generation came from renewables. Across almost every continent, green energy beat out fossil fuels in new capacity.

A multi-agency UN report, titled "Seizing the Moment of Opportunity," revealed that nearly three-quarters of the growth in global electricity generation came from wind, solar, and other clean energy sources. Backing this up, the International Renewable Energy Agency (IRENA) reported that more than 90 per cent of new renewable energy projects now produce electricity at a lower cost than even the cheapest fossil fuel option.

Speaking at the report’s launch, UN Secretary General António Guterres painted a vivid picture: the world is standing at the edge of a new energy era. In 2023, approximately $ 2 trillion was invested in clean energy. That’s 800 billion more than what was invested in fossil fuels and a 70 per cent increase compared to a decade ago.

“Fossil fuels are running out of road, and the sun is rising on a clean energy age. Just follow the money,” he added.

New data from IRENA further confirms the trend. Solar, wind, and even new hydropower have become some of the most affordable sources of electricity. Solar energy is now 41 per cent cheaper than fossil fuels. Just a few years ago, it was four times more expensive. Offshore wind has also experienced a significant price drop, making it one of the most cost-effective renewable energy options available today.

For decades, economic growth and emissions rose side by side. But that old link is starting to break. In many advanced economies, emissions have already peaked while growth continues.

Last year alone, clean energy was responsible for about 10 per cent of the world’s GDP growth and nearly a third of all economic growth across Europe.

Director-General of IRENA, Francesco La Camera, says this progress is not guaranteed, however.

“Rising geopolitical tensions, trade tariffs and material supply constraints threaten to slow the momentum and drive up costs.”

Still, not everything is smooth sailing. Francesco La Camera, Director-General of IRENA, cautioned that while costs are expected to keep falling as technology improves and supply chains mature, there are real risks on the horizon. Geopolitical tensions, trade tariffs, raw material shortages, and shifting manufacturing patterns, especially in China, could temporarily drive costs back up. In Europe, higher prices are also tied to deeper structural issues, like slow permitting for new projects and insufficient grid capacity.

And then there’s the subsidy problem. Guterres pointed out that fossil fuels still receive almost nine times more government support than renewable energy sources. That imbalance, he warned, continues to slow down the energy transition at a moment when speed and scale are critical.

“Countries that cling to fossil fuels are not protecting their economies, they are sabotaging them,” he said.

La Camera notes that to safeguard the gains of the renewable energy transition, the world must reinforce international cooperation, secure open and resilient supply chains, and establish stable frameworks for policy and investment, particularly in the Global South.

“The transition to renewables is irreversible, but its pace and fairness depend on the choices we make today.”