The year 2024 marked a major shift in the global energy landscape, with renewable energy reaching new heights in terms of capacity additions and cost competitiveness. Led by solar photovoltaics (PV) and wind energy, the world added a record 582 gigawatts (GW) of renewable power capacity, a 19.8% increase compared to 2023. This took the total global renewable capacity to 4,443 GW by the end of the year. Solar PV alone contributed 452.1 GW, accounting for nearly 78% of the new additions, while wind power added 114.3 GW. Asia played a central role in this growth, with China alone responsible for over 61% of new solar PV and nearly 70% of new wind capacity.
This growth, though impressive, still falls short of the pace needed to meet the COP28 goal of tripling renewable capacity by 2030. To meet that target, annual additions will need to exceed 1,000 GW in the second half of this decade. Cost competitiveness continues to be a major strength of renewables. In 2024, 91% of newly commissioned utility-scale renewable energy projects delivered electricity at a lower cost than the cheapest fossil fuel-fired alternative. Onshore wind was the most affordable, with a global average levelised cost of electricity (LCOE) of USD 0.034/kWh, followed by solar PV at USD 0.043/kWh and hydropower at USD 0.057/kWh.
Although the LCOE for some technologies increased slightly in 2024—solar PV by 0.6%, onshore wind by 3%, offshore wind by 4%, and bioenergy by 13%—others saw declines. Concentrated solar power (CSP) saw a 46% drop, geothermal fell by 16%, and hydropower declined by 2%. This trend suggests that solar and wind have reached a stage of price stability, reflecting mature markets and efficient supply chains.
Total installed costs (TIC) for renewable technologies have also dropped significantly. In 2024, TIC for solar PV stood at USD 691/kW, onshore wind at USD 1,041/kW, and offshore wind at USD 2,852/kW. Countries like China and India have consistently achieved lower-than-average LCOEs due to their vertically integrated supply chains. China’s LCOE for solar PV was USD 0.033/kWh and for onshore wind USD 0.029/kWh.
Enabling technologies are playing a crucial role in integrating variable renewables into the grid. Battery energy storage systems (BESS) have become significantly more affordable, with costs falling 93% from USD 2,571/kWh in 2010 to USD 192/kWh in 2024. This cost drop is largely due to scaling up of manufacturing and improved efficiency. Hybrid systems that combine solar or wind with battery storage are becoming more common, offering stable output and higher capacity utilization. Digital tools like predictive maintenance and AI-driven asset management are also enhancing operational efficiency and grid responsiveness.
Beyond cost savings, renewables in 2024 helped the world avoid an estimated USD 467 billion in fossil fuel costs. The United States alone saved USD 24.1 billion in fossil fuel expenses and USD 21.5 billion in avoided air pollution damages. These benefits, including lower carbon emissions and improved public health, highlight the broader value of renewable energy beyond what is captured in LCOE figures.
However, there are challenges ahead. Geopolitical tensions, trade barriers, and supply chain issues pose risks to further cost reductions. Financing remains a hurdle in many developing markets, and delays in permitting and grid infrastructure are slowing deployment. Financing costs, driven by revenue certainty and economic conditions, contribute significantly to LCOE, especially in high-risk regions. While China’s integrated supply chain model lowers costs, it also presents risks related to market concentration and emissions.
Looking forward, global installed costs are expected to keep falling, but at a slower rate. By 2029, projections estimate solar PV costs at USD 388/kW, onshore wind at USD 861/kW, and offshore wind at USD 2,316/kW. Higher costs may persist in Europe and North America due to structural factors. To meet global targets, investment in enabling infrastructure such as grids and storage must increase. According to the International Renewable Energy Agency, the full benefits of renewables—including energy security, public health, and environmental sustainability—make a strong case for accelerating the clean energy transition.
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