A new report from the International Renewable Energy Agency (IRENA) finds that in 2024, utility-scale solar PV generated electricity at an average levelized cost of electricity (LCOE) of $0.043/kWh – 41% lower than fossil fuels, representing a 90% decline between 2010 and 2024 from $0.417/kWh.
China and India reported below-average LCOEs of $0.033/kWh and $0.038/kWh for solar PV, respectively.
Onshore wind was the cheapest renewable source, averaging $0.034/kWh and coming in 53% below fossil fuel costs. Cost savings also came from 582 GW of new renewable power capacity installations in 2024, says IRENA, avoiding fossil fuel use worth $57 billion. Solar led installations with 452.1 GW, or 77.8% of the total, followed by wind with 114.3 GW. At the end of 2024, the total global installed renewable capacity reached 4,443 GW (see IRENA: Global Renewable Energy Additions Hit 582 GW In 2024).
Thus, renewables continued to be the most cost-competitive option for new electricity generation last year. According to IRENA, 91% of newly commissioned utility-scale capacity delivered power at a lower cost than the cheapest, newly installed fossil fuel-based alternative last year.
Grid bottlenecks and financing gaps pose growing threats, especially in developing markets. IRENA Director-General Francesco La Camera said that the avoided fossil fuel costs in 2024 reached up to $467 billion, thanks to all operational renewable energy capacity.
However, it is the remarkable decline in the cost of electricity from utility-scale solar PV that IRENA calls one of the most compelling stories in the power generation sector. Cost declines have been reported not just in modules, but also in inverters. Together, both these components were responsible for 55% of this decline since 2010, contributing to several new solar markets flourishing globally.
Over this period, module costs declined by 46% while installation/EPC/development, as well as soft costs, reported a 14% decline each, reads the IRENA report Renewable Power Generation Costs in 2024.
For solar PV, the LCOE increased slightly last year, by 0.6%, which the report writers believe reflects the changing financial conditions across markets. Between 2010 and 2024, the global weighted average capacity factor for new, utility-scale solar PV went up from 15% to 17.4%. It attributes this increase in capacity factor to evolving inverter load ratios, a shift in average market irradiance, and expanded use of trackers due to increased adoption of bifacial technologies, among others.
