Renewable Power Generation Costs in 2023
About this book
Renewable Power Generation Costs in 2023 International Renewable Energy Agency (IRENA) en Renewable Power Generation Costs in 2023, published by the International Renewable Energy Agency (IRENA) in September 2024, is the latest edition of IRENA's authoritative annual tracking report on the costs of utility-scale renewable electricity generation technologies worldwide. The report serves a vital function in the energy policy landscape by providing independent, data-driven evidence of the economics of renewables, enabling governments, developers, financial institutions, and regulators to make informed decisions. The 2023 data edition documents a year in which the cost competitiveness of renewables consolidated significantly, even as global supply chains normalized following the inflationary pressures of 2021-2022, and as fossil fuel prices retreated somewhat from their crisis-era peaks.
The overarching finding of the report is that renewable power generation has become, unambiguously and decisively, the most cost-competitive source of new electricity generation capacity in most of the world. The data for 2023 confirms and deepens the cost revolution that has been underway since roughly 2010, when solar photovoltaics (PV) were considered expensive niche technologies and onshore wind was competitive only in the best resource locations. Over the intervening thirteen years, the economics of energy generation have been fundamentally transformed.
Solar PV stands at the center of this transformation. The global weighted average levelized cost of energy (LCOE) for newly commissioned, utility-scale solar PV projects declined by 12% between 2022 and 2023, reaching USD 0.044 per kilowatt-hour (kWh). To put this in historical context: solar PV module prices fell by approximately 93% between December 2009 and December 2023, and the LCOE of solar PV has declined by roughly 90% since 2010.
In 2010, solar PV was 414% more expensive than the cheapest fossil fuel-fired generation alternative; by 2023, it was 56% less expensive than the global weighted average cost of fossil fuel-fired electricity. This inversion represents one of the most dramatic cost collapses in the history of energy technology, driven by learning-curve effects, economies of scale in manufacturing, improvements in module efficiency, and reductions in installation and soft costs. The 2023 data also shows that cost reductions were not limited to solar PV modules alone.
Between 2018 and 2023, soft costs fell by approximately 59%, balance-of-system hardware by 39%, and installation costs by 36%. This broader diffusion of cost reduction across the entire value chain signals that solar PV cost competitiveness is structurally embedded and not dependent on a single component improvement. Onshore wind also maintained strong cost competitiveness in 2023.
The global weighted average LCOE for newly commissioned onshore wind fell by 3% to USD 0.033/kWh, making it — alongside solar PV — one of the cheapest sources of electricity in most markets. The long-term improvement is equally striking: in 2010, onshore wind LCOE was 95% above the lowest fossil fuel-fired generation cost; by 2023, it was 35% below the global weighted average fossil fuel cost. Offshore wind presents a more nuanced picture.
After a period of significant cost increases in 2022 driven by supply chain inflation, higher steel and cable costs, and project delays, offshore wind costs declined by 7% in 2023, with the global weighted average LCOE reaching approximately USD 0.075/kWh. Critically, offshore wind crossed a historic threshold in 2023: having been 126% more expensive than the weighted average fossil fuel cost in 2010, it is now 25% less expensive. Offshore wind capacity additions reached 11 GW in 2023, a 27% increase over 2022, with China accounting for 65% of global offshore installations.
For concentrating solar power (CSP), geothermal energy, and bioenergy, the 2023 report also documents continued cost stabilization and, in several cases, declining costs, reinforcing the diversity of the renewable technology portfolio available to decarbonize electricity systems across different geographies and resource endowments. The report provides specific data on major markets. China and India reported solar PV LCOEs of USD 0.033/kWh and USD 0.038/kWh respectively, below the global average.
The United States, Europe, and other markets are converging toward similar low-cost levels, though specific costs continue to vary by resource quality, market maturity, financing conditions, and regulatory environment. A significant systemic finding concerns the cumulative economic value of the renewable buildout. IRENA estimates that the renewable power capacity deployed globally since 2000 saved approximately USD 409 billion in fuel costs to the electricity sector in 2023 alone.
This figure illustrates not only the direct economic benefit of low-cost renewables but also the macroeconomic importance of accelerating deployment — every additional gigawatt of renewable capacity installed locks in future fuel cost savings while simultaneously reducing emissions. The 2023 edition also addresses the policy implications of the cost data with clarity: economic barriers to renewable energy deployment in most markets have been decisively overcome. The remaining obstacles are predominantly structural — permitting backlogs, grid connection queues, insufficient transmission infrastructure, financing constraints in developing economies, and policy uncertainty.
Addressing these barriers, rather than the cost competitiveness of the technologies themselves, is now the primary challenge for scaling renewable deployment to levels consistent with climate targets.