Renewables continue to outpace fossil fuels in cost-effectiveness, as outlined in the Renewable Power Generation Costs in 2023 report released by the International Renewable Energy Agency (IRENA) at the Global Renewables Summit in New York. The report highlights that 81 percent of the 473 gigawatts (GW) of new utility-scale renewable capacity added globally in 2023 had lower costs than their fossil fuel counterparts.

According to the report, decades of technological advancements in solar and wind energy have significantly reduced costs. In 2023, the global cost of solar photovoltaics (PV) dropped to four US cents per kilowatt hour, making it 56 percent cheaper than fossil fuel and nuclear energy alternatives. Since 2000, this transition to renewables has saved an estimated USD 409 billion in fuel costs for the power sector.

IRENA’s Director-General, Francesco La Camera, emphasized that renewables have proven themselves as the most cost-effective solution: “Prices for renewables are no longer an excuse. The record growth in 2023 demonstrates that low-cost renewables offer a powerful incentive to boost renewable power capacity and reduce dependency on fossil fuels.” He called for an urgent tripling of global renewable capacity by 2030, aiming for 11.2 terawatts (TW), driven by solar and wind energy.

To achieve this, essential enablers like energy storage are critical. The cost of battery storage projects has fallen by 89 percent since 2010, further facilitating the integration of solar and wind power into global energy grids.

By 2023, the global average costs for renewable technologies, including solar PV, onshore and offshore wind, and hydropower, continued to decline. In Asia, renewable energy savings reached USD 212 billion, followed by Europe with USD 88 billion, and South America with USD 53 billion.

The report urges policymakers to align national policies and financing mechanisms to meet renewable energy targets, as outlined in the next Nationally Determined Contributions (NDCs) for the Paris Agreement by 2025.