Introduction
According to a recent report by the International Renewable Energy Agency (IRENA), renewable energy projects that came online in 2025 helped avoid an estimated cost of $480 billion in fossil fuels worldwide. This occurred because more than 90% of the public-scale renewable energy capacity installed in 2025 generated electricity at a lower cost than the cheapest fossil fuel alternative for new projects.
Cost Advantage of Renewables
The cost advantage of renewables over fossil fuels continued to increase in 2025. Solar photovoltaic energy maintained the same cost as 2024, at $44 per megawatt-hour (MWh), while wind energy became even more competitive. The cost of onshore wind energy fell 4%, to $33/MWh, and the cost of offshore wind energy decreased 3%, to $78/MWh.
Economic Benefits of Renewables
The economic benefits of renewables go far beyond generation costs. In 20 of the major economies evaluated in the report, responsible for about 80% of global renewable energy generation, it is estimated that in 2025, renewable energy avoided the purchase of fossil fuels worth $377 billion.
Geographic Distribution of Economic Benefits
The geographic distribution of economic benefits closely reflects the global distribution of renewable energy capacity. China alone avoided spending $177 billion, reflecting the scale of its generating park. The United States ranked second in avoided fossil fuel costs, with $35 billion. Brazil followed closely, with $32 billion in avoided costs.
Conclusion
The decline in renewable energy costs generates a powerful economic dividend. For countries that still heavily rely on fossil fuels, each additional megawatt of renewable energy strengthens economic protection against fuel price volatility, protecting consumers, businesses, and public finances from higher costs.
Source / Reference
Source: ClimaInfo