Renewable energy pays off, new UN report proves

Ten years after the adoption of the Paris Agreement, UN experts have prepared a report on the progress of the energy transition and its economic realities. It turns out that renewable energy sources are emerging and growing at an impressive rate, and contrary to the warnings of skeptics, its financial viability is very high. However, this does not mean that the world can rest on its laurels.

Sun and wind cost less and less

For years, renewable energy was considered too expensive to be viable. However, experts point out that the cost of PV installations since the 1960s has fallen by 80-90 percent each decade, while the price of fossil fuels remains highly volatile and dependent on the political situation. Thanks to technological advances, the supply of components for PV installations already clearly exceeds demand.

Solar and wind energy are currently the cheapest RES. The authors of the report note that in 2023. 96 percent of new PV installations and onshore wind farms had lower energy production costs than new coal and gas-fired power plants. In 2024, the average global cost of solar energy was 41 percent lower, and wind energy even 53 percent lower than the cost of obtaining the same amount of energy from new fossil-fuel power plants.

Importantly for the economic calculus of RES investment, solar and onshore wind farms are built in 1-3 years, while the development of a new coal or gas power plant is at least 5 years, and a nuclear plant is 10-15.

Renewable energy is taking the world by storm

Declining costs have made solar and wind the fastest-growing energy sources in the history of the globe. In 2024, new RES installations accounted for 92.5 percent of the world’s total new energy capacity and were responsible for 74 percent of the overall increase in energy production. The UN report shows that between 2015 and 2024, their annual capacity increased by 140 percent (2,600 GW), while fossil-fuel-based energy capacity increased by only 16 percent (640 GW) during that period.

Currently, the total global capacity of RES installations is almost as much as that of traditional power plants, a kind of turning point in the history of the Earth. Its importance is also underscored by the number of electric vehicles (EVs) sold, which has increased by 3,300 percent since 2015, with more than 17 million electrics purchased worldwide in 2025, accounting for more than 20 percent of the market.

Economic potential of RES

Renewable energy is not just a way to reduce emissions and supply communities with electricity. According to the report’s authors, an entire economic sector is growing around RES installations, generating jobs and additional GDP. Annual global investment in clean energy in 2024 was more than $2 trillion. A year earlier, the sector provided employment for 34.8 million people, of which 16.2 million jobs were closely related to renewable energy.

The global economy has gained $320 billion thanks to RES, equivalent to 10% of global GDP. According to UN experts, already in 40 countries of the world economic growth is no longer positively correlated with the level of greenhouse gas emissions.

The repercussions of these changes are far-reaching. In many regions of the world, renewable energy translates into increased security and coverage of energy supply and lower electricity prices. This is important especially in the context of strong fluctuations in the price and supply of fossil fuels closely linked to the global political situation. The war in Ukraine alone has led to an energy crisis that negatively affects the economic situation of many sectors and businesses.

Eighty percent of people who still do not have access to electricity live in rural areas. This is where renewable energy may be most needed. By offering flexible solutions, such as small-scale PV installations and off-grid power plants, a first step can be taken toward reducing poverty levels and pollution in developing countries, while improving food security and the quality of health care.

Fossil fuels are still too much

According to the report’s authors, despite these positive reports, the extinguishing of dirty energy is still too slow and uneven. China is investing the most in renewable energy, with as much as 41 percent of the world’s RES capacity by the end of 2024. Another 39 percent is located in OECD countries, and 10 percent in Brazil and India. In Africa, however, the rate is only 1.5 percent, despite the fact that the potential of renewable energy sources here exceeds the projected demand for energy by 2040. It is in Africa that the majority of people without access to electricity live (85 percent globally).

If one takes into account these disparities, the still limited use of RES-based technologies and the insufficient growth of energy efficiency in end-use sectors, the changes appear to be clearly insufficient. The extraction of fossil fuels continues to be expanded, and their share in the global energy mix has decreased from 83 to 80 percent between 2015 and 2024, which is not an impressive result.

How can governments support the energy transition?

The report’s authors make a number of recommendations to promote the spread of renewable energy. They are addressed to representatives of state authorities responsible for regulating the energy market and include:

• Reducing subsidies for fossil fuel extraction;
• Elimination of legal incompatibilities hindering the development of new investments in RES;
• Effective implementation of emissions pricing systems;
• Investing in the expansion and modernization of energy networks;
• Development of long-term national energy strategies.

Figures compiled by UN experts show that there are at least 3,000 GW of projects awaiting grid development – so far frozen due to insufficient transmission infrastructure.

In order to meet the goals of the Paris Agreement and keep the increase in global average temperature below 1.5°C, spending on RES must increase 5-7 times by 2030. In 5 years they should reach $1.4-1.9 trillion per year, while by 2035 they should reach more than $2 trillion per year. Such growth, however, requires lowering the cost of investment capital, which is still more than 2 times higher in developing countries for PV than in Western economies.

International financial institutions and the private sector, not just governments, must also get involved in the renewable energy effort. According to UN experts, further energy transition must take into account the needs of sectors such as data centers and artificial intelligence, while keeping social justice in mind.

---

In the article, I used:

United Nations. Seizing the moment of opportunity: Supercharging the new energy era of renewables, efficiency, and electrification. New York. (2025)