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Global renewable energy continued to strengthen its cost advantage over fossil fuels in 2025, with more than 90%of newly commissioned utility-scale renewable power projects producing electricity at a lower cost than the cheapest new fossil fuel alternatives, according to the International Renewable Energy Agency’s (IRENA) latest Renewable Power Generation Costs in 2025 report. The report also highlights a sharp decline in battery energy storage costs, signalling a new phase in the global energy transition.
After more than a decade of steep cost reductions, renewable power technologies are entering a period of maturity. While the pace of cost declines has slowed, renewables continue to dominate on affordability.
Solar photovoltaic (PV) retained its global weighted-average levelised cost of electricity (LCOE) at USD 44/MWh in 2025, unchanged from the previous year. Onshore wind became even cheaper at USD 33/MWh, while offshore wind costs declined to USD 78/MWh. Among dispatchable renewable technologies, hydropower, geothermal and concentrated solar power (CSP) recorded higher generation costs due largely to lower output, whereas bioenergy costs fell to USD 86/MWh.
Since 2010, the cost of electricity from solar PV has fallen by 89 percent, onshore wind by 71% and offshore wind by 63 percent, reinforcing renewables as the world’s lowest-cost source of new electricity.
Global renewable capacity additions exceeded 690 GW in 2025, around 20%higher than the previous year. Solar PV contributed more than 500 GW of new installations, while wind added around 160 GW.
The report notes that renewable energy overtook coal in total installed power capacity during 2025, making it the world’s largest source of installed electricity capacity. Asia remained the centre of deployment, with China accounting for nearly two-thirds of new solar installations and around three-quarters of new wind capacity added globally.
One of the report’s most significant findings is the continued fall in battery energy storage costs. The installed cost of a four-hour utility-scale battery energy storage system (BESS) declined by nearly 30% year-on-year to around USD 140/kWh in 2025, approximately 95% lower than in 2010. In China, costs dropped below USD 70/kWh.
Lower battery prices are accelerating the deployment of hybrid renewable energy systems. Around one-quarter of all newly commissioned utility-scale solar projects in 2025 were paired with battery storage, enabling developers to improve grid utilisation, shift electricity to peak demand periods and reduce exposure to volatile power prices.
IRENA’s analysis shows that high-reliability solar-plus-storage systems have become significantly more economical. At high-quality sites, the cost of delivering firm renewable electricity with 95% reliability has fallen below USD 85/MWh, compared with more than USD 100/MWh in 2020.
The agency expects hybrid renewable systems to become even more competitive over the coming decade as battery costs continue to decline, although the pace of reductions is likely to moderate compared with previous years.
While renewable technologies maintained stable or declining costs, new fossil fuel generation became more expensive. According to the report, shortages of gas turbines pushed the capital cost of new combined-cycle gas plants in the United States to around USD 2,400/kW. In higher gas-price markets such as Germany, Italy and Japan, the LCOE of gas-fired generation approached USD 100/MWh.
As a result, more than 90%of utility-scale renewable projects commissioned in 2025 generated electricity at a lower cost than the cheapest new fossil fuel alternative.
The report highlights significant regional differences in renewable energy costs. China remained the world’s lowest-cost market for onshore wind, with an LCOE of USD 27/MWh, while utility-scale solar PV generation cost USD 36/MWh.
India emerged among the most competitive solar markets globally, recording an LCOE of USD 35/MWh, closely matching China and remaining substantially below costs in Germany and the United States.
Although technology costs have largely stabilised, IRENA warns that financing conditions are becoming an increasingly important determinant of project economics. The report estimates that national macroeconomic conditions influence financing costs more than twice as much as technology-specific factors, making policy stability and affordable capital essential for future renewable deployment.
The agency also cautions that clean technology manufacturing investment has fallen sharply since its 2023 peak, while rising commodity prices and evolving global trade policies could temporarily increase project costs over the near term.
Beyond lowering electricity costs, renewable energy delivered substantial economic and environmental benefits in 2025. IRENA estimates that existing renewable generation avoided approximately USD 480 billion in fossil fuel expenditures and prevented around 8.4 gigatonnes of carbon dioxide emissions. 
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