Renewables are Cutting Down Power Prices Globally: Report

The analysis argues that the countries have an opportunity to build affordable electricity systems, with the cost of wind and solar storage coming down. 

Renewable energy, like wind and solar, is the cheapest source for electricity generation despite claims that technologies are pushing power prices, according to an analysis by Zero Carbon Analytics.

The report cited that nine out of ten new grid-scale renewable energy projects generated electricity at a lower cost than the cheapest new fossil fuel-fired alternative. It said that onshore wind is the cheapest source of new electrical energy globally. 

Power from new onshore wind farms is 53% cheaper than the most affordable fossil fuel-based alternatives, while renewables coupled with battery storage are increasingly approaching cost parity with fossil fuel-based generation in key markets, said the report, citing a report by the International Renewable Energy Agency (IRENA).

The report said that despite the cost-effectiveness of renewables, US President Donald Trump and Kemi Badenoch, Conservative Party leader in the UK, have claimed in their speeches that renewables and decarbonisation are driving up the cost of electricity. 

Data Shows Decline in Electricity Prices Across Nations

The report said in the US, most states with higher-than-average shares of wind and solar in their electricity generation mix have below-average household power prices. This includes the three states where variable renewables made up over 50% of the mix in the first nine months of 2025 – namely Iowa, South Dakota, and New Mexico.

A similar pattern was also observed in the EU, where the energy transition is at a more advanced stage. Most EU countries with above-average shares of wind and solar have below-average household power prices, including Denmark, which currently leads the world in the shift to variable renewables, according to the report. 

The report stated that in India, the energy transition is still at the early stages, despite a recent surge in installations. Coal still accounts for nearly three-quarters (73.6%) of total power output as of 2024, the report said, citing a report by Ember. 

In this market, there is no clear relationship between renewables and power prices, and many states still have negligible contributions from wind and solar in their generation mix. However, in Rajasthan, where the renewables market is more developed, the average price that distribution utilities pay for electricity is below the national median, according to the report. 

According to the report, Australia presented a complex case, where Queensland, the national laggard in renewable energy adoption, had the lowest wholesale power prices in the third quarter of 2025, while renewables-leader South Australia had the highest. However, the report attributed this disparity to South Australia’s “illiquid and highly concentrated market for ‘on-demand’ electricity”. This made hedging spot market prices costly.  The report suggested these costs could decrease once a new transmission link with New South Wales is fully operationalised in 2027. 

Difficult to Quantify Renewable Adoption and the Cost

The report found electricity prices are influenced by many factors making it hard to measure the link between renewable energy adoption and end-user costs. However, with the rapid decline in the cost of wind solar and battery storage, the analysis suggested nations have a chance to create more resilient and affordable electricity systems through suitable policy frameworks.

About The Author

Editorial Team

A team of handpicked and dedicated writers committed to fact check each climate-related statement. Go to the roots and intent of each policy implemented, internationally and at home to help you understand climate better

See author's posts