• Solar photovoltaic costs rose slightly in 2024, marking a break in a decade-long downward trend.

• Rising prices of modules, logistics, and financing, along with slower technological progress, drive this cost stabilization.

• Despite the slowdown, solar power remains the cheapest renewable energy in most markets, especially in Africa.

Solar energy continues to lead the expansion of renewable energies worldwide. The International Renewable Energy Agency (IRENA) reported in March that solar accounted for the largest share of new clean energy added last year, exceeding 415 GW.

However, solar photovoltaic (PV) costs stopped falling in 2024 after a decade of steady decline. IRENA’s new report, Renewable Power Generation Costs in 2024, released on 22 July, shows that the average levelised cost of electricity (LCOE) for large-scale solar projects reached $57 per megawatt-hour (MWh) this year. This reflects a slight 0.6% increase compared to the previous year.

IRENA attributes this modest cost rise to ongoing tensions in global supply chains. The agency points to higher prices for solar modules, increased logistics costs, and more expensive financing as key factors. Moreover, technological improvements, which drove earlier cost reductions, have now slowed down.

Despite this cost stabilization, IRENA confirms solar PV remains the most competitive renewable electricity source in most markets. In Africa, recent tenders have achieved LCOEs below $40 per MWh, demonstrating strong competitiveness. Still, these low costs depend heavily on favorable local financing and stable public policies.

IRENA warns that the current pause in cost declines may only be temporary. It expects the expansion of new industrial capacity, particularly in China, along with efficiency innovations, to drive future price reductions.

Meanwhile, the Lawrence Berkeley National Laboratory (LBNL) reports a similar trend in the United States, where LCOEs for 2023 solar projects rose slightly to $46 per MWh before tax incentives. This suggests that automatic cost cuts are reaching a limit in mature solar markets.

Furthermore, the United Nations Environment Programme (UNEP) highlights that higher financing costs in low- and middle-income countries are slowing renewable energy investments, despite cheaper technology availability.

This article was initially published in French by Abdel-Latif Boureima

Edited in English by Ange Jason Quenum