Over 80% of new renewables in 2023 cheaper than fossil fuel alternatives

Solar PV costs dropped in 2023, becoming 56% cheaper than fossil fuel and nuclear options.

Renewable energy sources remain competitive, with 81% of 473 gigawatts of newly commissioned, utility-scale clean energy projects last year being cheaper than their fossil fuel-fired alternatives, according to the International Renewable Energy Agency (IRENA).

“After decades of falling costs and improving technology particularly for solar and wind, the socio-economic and environmental benefits of renewable energy deployment are now uniquely compelling,” the agency said.

Specifically solar PVs, IRENA said their global costs decreased to around four US cents per kilowatt hour in a year, making them 56% lower than fossil fuel and nuclear options in 2023. In 2010, they were 414% more expensive.

New onshore wind projects were also 67% cheaper than fossil fuel alternatives, also an improvement from 2010 when they were 23% more expensive.

Overall, the renewable power deployed globally since 2000 has saved up to $409b in fuel costs in the power sector, IRENA said.

“Low-cost renewables represent a key incentive to significantly increase ambition and triple renewable power capacity by 2030, as modelled by IRENA and set by the UAE Consensus at COP28,” said IRENA Director-General Francesco La Camera.

La Camera expects solar and onshore wind to have the biggest impact on tripling renewable energy capacity. 

Renewable power has become the most cost-effective option for new power generation. To achieve a threefold increase in renewable energy, policymakers and stakeholders must align policies, regulations, market structures, support systems, risk mitigation measures, and financing, IRENA said.