In a report, the group said the average cost of solar photovoltaics is set to fall by as much as 59 per cent, offshore wind by 35 per cent and onshore wind by 26 per cent by 2025.
The group said that, with the right regulatory and policy frameworks in place, solar and wind technologies will unlock “significant additional cost reductions” by 2025 and beyond.
Irena director-general Adnan Amin said: “We have already seen dramatic cost decreases in solar and wind in recent years and this report shows that prices will continue to drop, thanks to different technology and market drivers.
“Given that solar and wind are already the cheapest source of new generation capacity in many markets around the world, this further cost reduction will broaden that trend and strengthen the compelling business case to switch from fossil fuels to renewables.”
Prices for solar PV modules and wind turbines have fallen by 80 per cent, and between 30 and 40 per cent respectively, since 2009, and cost reductions to 2025 will depend increasingly on balance of system costs, technology innovations, operations and maintenance costs, and quality project management, causing Irena to call for policy to reduce costs in these areas.
“Historically, cost has been cited as one of the primary barriers to switching from fossil-based energy sources to renewable energy sources, but the narrative has now changed,” added Amin.
“To continue driving the energy transition, we must now shift policy focus to support areas that will result in even greater cost declines and thus maximise the tremendous economic opportunity at hand.”