A new report from the International Renewable Energy Agency (IRENA) has predicted a significant fall in the cost of generating renewable energy.

Increasing economies of scale, more competitive supply chains and further technological improvements are expected to drive down the cost of renewables.

The cost of electricity producing by solar and wind power technologies could fall by at least 26% and as much as 59% between 2015 and 2025, if the right policies are put in place.

The global-weighted average cost of electricity could fall by 26% from onshore wind, by 35% from offshore wind, by at least 37% from concentrating solar power (CSP) technologies, and by 59% from solar photovoltaics (PV) by 2025, the report calculated.

Reduce transaction costs

“Governments need to be proactive in terms of setting the policy framework in such a way as to minimise transaction costs,” the report said.

“Streamlined, yet comprehensive administrative procedures and approval processes based on pre-agreed national guidelines can help reduce project development costs and uncertainty for project developers.

“Much can be learned from the sharing of best practice, yet this is an area where, with some exceptions, little collaboration takes place.”

> Download the report