Keypoints
- A new report by the International Renewable Energy Agency finds “firm” renewable power is now cost-competitive with fossil fuels, and cheaper in some regions
- Falling battery costs are reducing the extra cost required to make solar and wind reliable
- The agency introduces Firm Levelised Cost of Electricity (F-LCOE) to measure the cost of 24/7 clean power
- Hybrid solar and storage projects are increasingly matching fossil plants on cost and deployment speed
- China is setting the global cost benchmark for firm renewable electricity
Main story
The International Renewable Energy Agency has released a report pointing to a shift in global energy economics, as renewable power becomes cheaper and more reliable.
The study, 24/7 Renewables: The Economics of Firm Solar and Wind, shows that combining solar and battery storage can deliver continuous electricity, often referred to as “firm” power, at competitive prices.
In high solar resource regions, the cost of firm renewable electricity has fallen to roughly $54 to $82 per megawatt-hour in 2025. This brings it in line with, and in some cases below, the cost of new fossil fuel generation, particularly coal and gas plants.
The report highlights that this cost includes the “firming premium”, the additional investment required for battery storage and extra generation capacity to ensure electricity is available around the clock.
Rapid declines in technology costs are driving the shift. Since 2010, solar costs have dropped by 87%, while battery storage costs have fallen by more than 90%, making it more affordable to store and dispatch renewable energy when needed.
China currently represents the lowest-cost market for firm renewable electricity, with some projects delivering power below $100 per megawatt-hour even at high reliability levels.
The report also finds that hybrid renewable systems are beginning to provide stable electricity supply. Their faster construction timelines, often one to two years, give them an advantage in meeting growing demand from data centres and artificial intelligence.
The issues
- Cost competitiveness depends on geography, with the best results in high solar and wind regions
- Achieving high reliability levels increases costs due to higher storage needs
- Many electricity grids are not yet designed to handle large volumes of hybrid renewable power
- Market structures in several countries do not fully reward reliability or storage
What’s being said
- IRENA says hybrid renewable systems can deliver electricity below fossil fuel benchmarks in favourable conditions
- The agency notes that firm renewables are insulated from fossil fuel price volatility
- Researchers highlight that combining solar and wind reduces reliability challenges
- The report says firm renewables are a project-level solution and not a replacement for system flexibility
What’s next
- Firm renewable costs are projected to fall by around 30% by 2030
- The best-performing projects could deliver electricity below $50 per megawatt-hour by 2035
- Policymakers are expected to adjust market rules to value reliability and storage
- Investment is likely to shift toward hybrid renewable systems
Bottom line
Firm renewable energy is closing the gap with fossil fuels on cost and reliability, signalling a shift in power markets, especially in regions with strong solar and wind resources.
