Record-Smashing Renewable Energy Expansion in 2024, with Solar Power and Wind Energy Leading the Charge
In a significant shift towards a greener future, the costs of renewable energy technologies have seen a dramatic decline over the past decade. This development, according to the International Renewable Energy Agency (IRENA), has made renewables cheaper on average than fossil fuel alternatives in many parts of the world.
The report by IRENA points out that capital costs are higher in developing countries, and limited access to affordable loans or public funding stalls projects in emerging markets. However, the agency also suggests that if these challenges are addressed, renewable energy could power most of the world's electricity by 2030.
The pace of renewable energy expansion must double to meet global targets, the report adds. By 2024, solar photovoltaic (PV) electricity generation costs dropped by about 41%, and onshore wind costs dropped by 53% compared to the least-cost fossil fuel alternatives. Utility-scale solar PV averaged 4.3 cents per kWh and onshore wind 3.4 cents per kWh.
Battery storage costs have decreased even more significantly, plunging by 93% since 2010 to $192 per kWh for utility-scale systems in 2024. This reduction enhances the viability and integration of intermittent renewable resources.
Key factors contributing to these cost reductions include technological improvements, economies of scale, competitive supply chains, innovations in materials and manufacturing techniques, and policy and market dynamics encouraging investment and competition in renewable technologies.
The decline in costs has also extended to residential solar systems. Average pre-incentive prices dropped from around $40,000 in 2010 to about $26,880 by 2024.
Another significant development is the increase in the pairing of batteries with solar and wind systems in hybrid projects. These projects, which include on-site generation, storage, and sometimes digital monitoring tools, are becoming more common.
The shift towards renewable energy has also provided economic benefits. In 2024, renewable energy helped avoid $467 billion in fossil fuel spending, providing economic benefits such as fewer oil and gas imports, lower exposure to global price spikes, and increased security for developing nations.
However, inconsistent or unclear policies on renewable targets, tax incentives, or feed-in tariffs make it hard for investors to commit long-term. Geopolitical tensions and trade barriers, including rising tariffs on solar panels, wind turbines, and raw materials, also pose challenges in the transition to renewable energy.
Despite these challenges, the decline in costs and the growing economic benefits of renewable energy suggest a promising future for the sector. Renewables are increasingly becoming the preferred power source globally, offering a cost-effective and scalable solution to the world's energy needs.
[1] IRENA (2021). Cost of renewables 2021: Analysis and insights. [2] Lazard (2020). Levelized cost of energy from various sources version 14.0. [4] IRENA (2020). World Energy Transitions Outlook: Achieving a 1.5°C world. [5] SEIA (2021). U.S. Solar Market Insight Report: Q4 2020.
- The International Renewable Energy Agency (IRENA) indicates that if challenges such as higher capital costs and limited access to financing in developing countries are addressed, renewable energy could power most of the world's electricity by 2030.
- According to the report by IRENA, the pace of renewable energy expansion must double to meet global targets, with solar photovoltaic (PV) technology and onshore wind seeing a 41% and 53% decrease in electricity generation costs respectively compared to fossil fuel alternatives.
- The report also reveals that utility-scale battery storage costs have dropped by 93% since 2010, which enhances the viability and integration of intermittent renewable resources.
- Key factors contributing to these cost reductions include technological improvements, economies of scale, competitive supply chains, innovations in materials and manufacturing techniques, and policy and market dynamics encouraging investment and competition in renewable technologies.
- The declining costs of renewable energy have extended to residential solar systems, where the average pre-incentive price has fallen from around $40,000 in 2010 to about $26,880 by 2024.
- Another significant development is the increase in the pairing of batteries with solar and wind systems in hybrid projects, which are becoming more common and offer on-site generation, storage, and sometimes digital monitoring tools. These projects, paired with the growing economic benefits of renewable energy, suggest a promising future for the sector as it becomes the preferred power source globally.
