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Onshore wind beats solar PV as the lowest-cost renewable energy source in 2024
30/7/2025
News
In 2024, onshore wind was the most affordable source of new renewable electricity in terms of levelised cost of ownership at $0.034/kWh, followed by solar PV at $0.043/kWh, according to IRENA’s new report on renewable power generation costs in 2024. The most expensive source of new renewable energy was concentrated solar power at $0.092/kWh, which compared favourably to battery storage at $0.104/kWh.
The levelised cost of electricity (LCOE) increased for solar PV (by 0.6%), onshore wind (by 3%), offshore wind (by 4%) and bioenergy (by 13%), but fell for concentrated solar power (by 46%, although its volume is relatively small), geothermal (down by 16%) and hydropower (down 2%).
By far the most popular renewable energy source in 2024 was solar PV, at about 77.6% of total installations, followed by onshore wind at 18%. In total, 582 GW of renewable capacity was added in 2024.
The report confirmed that renewables maintained their price advantage over fossil fuels, with cost declines driven by technological innovation, competitive supply chains and economies of scale.
It also predicted that continued cost reductions are expected as technologies mature and supply chains strengthen. In the meantime, short-term challenges pose risks that could temporarily raise costs, including geopolitical shifts including trade tariffs, raw material bottlenecks and evolving manufacturing dynamics, particularly in China.
The authors also predict that higher costs are likely to persist in Europe and North America, driven by structural challenges such as permitting delays, limited grid capacity and higher balance-of-system expenses. In contrast, regions like Asia, Africa and South America, with stronger learning rates and high renewable potential, could see pronounced cost declines.
IRENA concludes that stable and predictable revenue frameworks are essential to reduce investment risk and attract capital. Mitigating financing risk is central to scaling renewables in both mature and emerging markets. Instruments such as power purchase agreements (PPAs) play a pivotal role in accessing affordable finance, while inconsistent policy environments and opaque procurement processes undermine investor confidence.
It also found that financing costs remain a decisive factor in determining project viability. In many developing countries of the Global South, high capital costs, influenced by macroeconomic conditions and perceived investment risks, significantly inflate the LCOE of renewables.
For example, IRENA found that while onshore wind generation costs were similar in Europe and Africa at around $0.052/kWh in 2024, the cost structures varied significantly. European projects were capital-expenditure driven, while African projects bore a much higher share of financing costs. IRENA’s assumed cost of capital ranged from 3.8% in Europe to 12% in Africa, reflecting differing perceived risk profiles.
Fig 1: Renewable costs and installations in 2024, according to IRENASource: IRENA, except *
*BNEF: 2H2024 Energy Storage Market Outlook
