Renewable energy has crossed a critical economic threshold. A July 2025 report from the International Renewable Energy Agency (IRENA) shows that over 90 percent of newly built renewable energy projects worldwide are now cheaper than fossil fuel alternatives. This marks a pivotal shift in the energy transition, where technologies such as wind and solar are not only the environmentally responsible choice but also the most financially sound (Euronews).
The year 2024 brought the largest-ever annual increase in renewable capacity, with 582 gigawatts added globally. That represented nearly 20 percent growth over 2023. Solar and wind accounted for most of the expansion, helping clean energy dominate new power investment. The United Nations described this moment as a “positive tipping point,” showing that renewables are expanding at a pace that can both meet growing energy demand and displace fossil fuels (UN News).
Falling Costs, Rising Investments
The IRENA report highlights the dramatic price advantage of clean energy. Onshore wind projects delivered electricity at an average cost of $0.034 per kilowatt-hour, making them 53 percent cheaper than the lowest-cost fossil fuel generation. Solar photovoltaic followed closely at $0.043 per kilowatt-hour, around 41 percent cheaper than fossil fuels (Reuters).
This cost competitiveness is reflected in global investment trends. In 2024, renewable energy projects attracted $2 trillion in financing, compared with about $1.2 trillion for fossil fuels. The $800 billion gap underscores where financial markets see stability and growth potential. United Nations Secretary-General António Guterres urged governments to “follow the money,” highlighting renewables as the rational choice for both investors and policymakers (Financial Times).
Opportunities and Challenges Ahead
Despite these advances, experts caution against complacency. Geopolitical conflicts, supply chain pressures, and trade tariffs could raise costs in some regions. At the same time, outdated permitting processes and insufficient grid infrastructure are slowing deployment even where renewables are already cheaper than fossil fuels. In Europe and North America, delays in connecting new wind and solar projects to transmission lines have become a significant obstacle (Euractiv).
Yet the overall direction is clear. Renewable energy’s cost advantage undermines claims that decarbonization is too expensive. Instead, the shift is proving to reduce energy costs while cutting emissions and improving public health by reducing air pollution. For many developing economies, renewables also offer an opportunity to leapfrog fossil fuel infrastructure entirely, avoiding the long-term financial and environmental liabilities of coal or gas (Columbia Climate School).
With solar and wind now setting the benchmark for new power generation, the energy system is being reshaped around technologies that are both cheaper and cleaner. This represents not only a climate victory but also an economic transformation, one that positions renewables as the foundation for growth and resilience in the decades to come.