Onshore Wind Remains Cheapest Renewable Energy Source in 2024: IRENA Report

Onshore wind emerged as the world’s most cost-effective renewable energy source in 2024, with a global average price of USD 0.034 per kilowatt-hour (kWh), according to the latest report by the International Renewable Energy Agency (IRENA).

The Renewable Power Generation Costs in 2024 report highlights that onshore wind was 53 percent cheaper than the lowest-cost fossil fuel alternatives. Solar power followed closely at USD 0.043/kWh — about 41 percent more economical than fossil fuels.

582 GW of Renewables Saved USD 57 Billion

The report states that the addition of 582 gigawatts (GW) of renewable capacity last year helped avoid fossil fuel costs worth approximately USD 57 billion. Significantly, 91 percent of the new renewable projects commissioned in 2024 were cheaper than any new fossil fuel-based power plant.

Despite rapid cost declines, IRENA warns that structural challenges could dampen progress in certain regions.

Uneven Cost Trends Across Regions

Asia, Africa, and South America are expected to see stronger cost reductions due to better learning curves and high renewable potential. However, Europe and North America face rising costs due to permitting delays, grid limitations, and higher balance-of-system expenses.

Tariffs, supply chain disruptions, and shifting manufacturing dynamics — particularly in China — also pose short-term risks to the downward cost trajectory, the agency noted.

Financing and Infrastructure Still Key Constraints

The report underscores that stable and predictable revenue frameworks are critical to reducing investment risks and unlocking capital flows. In many developing nations, high financing costs — driven by macroeconomic instability and perceived investment risks — continue to raise the levelized cost of electricity (LCOE) for renewable projects.

Integration challenges such as grid connection delays, permitting bottlenecks, and underdeveloped local supply chains are also hindering large-scale deployment.

BESS and AI Offer New Optimisation Opportunities

The report also highlights that technological advancements beyond generation are improving overall project economics. The cost of utility-scale battery energy storage systems (BESS) has fallen by 93 percent since 2010, reaching USD 192/kWh in 2024 due to improved materials and economies of scale.

Additionally, artificial intelligence (AI)-powered digital tools are enhancing asset performance and grid stability. Yet, without significant investments in digital infrastructure, grid expansion, and flexibility, especially in emerging markets, the full potential of renewable energy cannot be realised, IRENA cautioned.

The findings reinforce that while renewables are already economically competitive, long-term affordability and scalability will depend on reforms in permitting, grid modernisation, and finance accessibility across global regions.