91% of New Renewable Projects Now Cheaper Than Fossil Fuels Alternatives - IRENA – International Renewable Energy Agency
Published February 26, 2026
91% of New Renewable Projects Now More Affordable Than Fossil Fuel Alternatives - IRENA
The International Renewable Energy Agency (IRENA) has released a groundbreaking report indicating that 91% of newly developed renewable energy projects are now less expensive than fossil fuel alternatives. This finding underscores a significant shift in the energy landscape, where the cost of renewable energy technologies continues to decline, making them increasingly competitive in the global market.
The report, which is based on the latest data collected from various renewable energy projects worldwide, highlights the rapid advancements in technology and economies of scale that have contributed to the decreasing costs of renewable energy. It reflects a broader trend in the energy sector, where renewables are not only becoming more accessible but also more economically viable compared to traditional fossil fuels.
Key Findings from the Report
According to the IRENA report, the findings are based on a comprehensive analysis of renewable energy projects that came online in 2021. The data reveals that the levelized cost of electricity (LCOE) from solar photovoltaics (PV) and onshore wind has fallen dramatically. For instance, the global average LCOE for solar PV has decreased by 89% since 2010, while onshore wind has seen a reduction of 70% in the same period.
This substantial decline in costs is attributed to several factors, including technological innovations, improved supply chains, and increased competition among project developers. Additionally, the report notes that the cost of offshore wind energy has also decreased significantly, making it a more attractive option for energy generation.
Regional Insights
The report provides a detailed breakdown of the cost trends across different regions. In regions such as the Middle East and North Africa, the cost of solar PV has reached unprecedented lows, with some projects reporting LCOE as low as $10 per megawatt-hour (MWh). Similarly, in parts of Europe and North America, onshore wind projects have achieved competitive pricing, further solidifying the position of renewables in the energy mix.
Moreover, IRENA's analysis indicates that emerging economies are also witnessing a surge in renewable energy investments. Countries in Asia, Africa, and Latin America are increasingly adopting renewable technologies, driven by the need for energy security and sustainability. The report emphasizes that these regions are not only capitalizing on the cost advantages of renewables but are also creating jobs and fostering economic growth through the development of clean energy projects.
Investment Trends in Renewable Energy
The IRENA report highlights a significant uptick in global investment in renewable energy. In 2021, total investments in renewables reached approximately $300 billion, marking a 20% increase compared to the previous year. This surge in investment is largely driven by the growing recognition of the importance of transitioning to a low-carbon economy and the need to mitigate the impacts of climate change.
Investors are increasingly viewing renewable energy as a stable and profitable asset class. The report indicates that institutional investors, including pension funds and insurance companies, are allocating more capital to renewable energy projects, attracted by the long-term returns and lower risk associated with clean energy investments.
Challenges and Opportunities Ahead
Despite the positive trends outlined in the report, IRENA acknowledges that challenges remain in the transition to renewable energy. Issues such as grid integration, regulatory frameworks, and financing mechanisms need to be addressed to ensure the continued growth of the sector. Additionally, the report emphasizes the importance of policy support and international cooperation in facilitating the deployment of renewable energy technologies.
Furthermore, the ongoing impacts of the COVID-19 pandemic have created uncertainties in supply chains and project timelines. However, IRENA remains optimistic that the resilience of the renewable energy sector will enable it to overcome these challenges and continue on its path of growth.
Conclusion
The findings from IRENA's report present a compelling case for the continued investment and development of renewable energy projects. With 91% of new renewable projects now cheaper than fossil fuel alternatives, the shift towards a sustainable energy future is not only environmentally necessary but also economically advantageous. As countries around the world strive to meet their climate goals, the role of renewable energy will be crucial in achieving a clean and resilient energy system.
As we move forward, it is imperative for stakeholders, including governments, investors, and industry leaders, to collaborate in addressing the challenges and seizing the opportunities presented by the renewable energy transition. The path to a sustainable energy future is clear, and the time to act is now.
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