In a new report, the agency reveals that more than 90% of the utility-scale renewable capacity added last year was cheaper than the lowest-cost new fossil alternative, and the cost advantage continues to widen.
Indeed, in 2025, solar remained at its 2024 price of $44 per megawatt hour (MWh) while onshore wind fell by 4% to $33/MWh and offshore wind by 3% to $78/MWh.
Conversely, for new gas-fired generation, the capital cost of a new combined-cycle plant in the US roughly doubled, while costs climbed towards $100/MWh in markets such as Italy, Germany and Japan. Persistent uncertainty surrounding the crisis in the Middle East is expected to keep gas prices elevated throughout the year.
In total, the report claims that installed renewables helped avoid an estimated $480bn in fossil-fuel costs in 2025, acting as a geopolitical shock absorber against volatile prices. IRENA director-general Francesco La Camera said that the decline in renewable energy costs is “delivering a powerful economic dividend.”
“For countries that still rely heavily on fossil fuels, every additional megawatt of renewables strengthens economic protection against fuel-price volatility, shielding consumers, businesses and public finances from higher costs,” he continued.
“Savings generated by existing renewable assets grow, providing a built-in hedge against future shocks. This energy crisis has shown yet again: expanding renewable capacity is a strategic investment in resilience and competitiveness.”
Across 20 major economies assessed by IRENA, which account for about four-fifths of world’s renewable generation, renewable power in 2025 avoided an estimated $377bn in fossil-fuel purchases.
China alone accounted for $177bn or around half of all cost savings, reflecting the scale of its renewable fleet. The US placed second in avoided fossil-fuel costs with $35bn, followed by Brazil with $32bn, India on $18bn, Germany with $18bn and Japan on $15bn.
In total, the report claims that the cost of solar PV has fallen by 89% since 2010, with concentrating solar declining by 72%, onshore wind by 71%, and offshore wind by 63%.
“IRENA’s analysis proves yet again the financial benefits of investing in clean energy as a buffer to a volatile world,” commented COP31 president-designate Murat Kurum “We now need to accelerate the deployment of renewable power generation and electrify daily life so that more can people benefit from these geopolitical shock absorbers.”
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Chris Seekings is the Deputy Editor of ISEP’s Transform magazine, which is published biomonthly for ISEP members. Chris’s role involves writing sustainability-related news, features and interviews, as well as helping to plan and manage the magazine’s other day-to-day activities.
