Clean energy can provide reliable, around-the-clock electricity at prices that rival fossil fuels, as the war on Iran forces Europe to re-think its reliance.
A new report from the International Renewable Energy Agency (IRENA) found that when solar and wind power are combined with battery storage, they can already compete with new coal plants on cost. In many parts of the world, this mix of renewables and storage can even undercut new gas power.
The findings challenge one of the fossil fuel industry’s longest-running arguments against renewables: that they cannot provide reliable, 24/7 electricity when the sun isn’t shining or the wind isn’t blowing.
Can renewables now outcompete fossil fuels?
According to IRENA, the answer is yes.
The report examined so-called “firm” renewable systems – combinations of solar panels, wind farms and battery storage capable of providing round-the-clock electricity.
In regions with strong sunlight and wind resources, solar power paired with batteries now costs between about €50 and €75 per megawatt-hour, the report found.
That compares with about €60 to €75 per megawatt-hour for new coal plants in China and more than €88 globally for new gas power.
A steep drop in battery prices has helped drive the change. Since 2010, the cost of battery storage has fallen by 93 per cent, according to IRENA, while solar panel costs dropped by 87 per cent and onshore wind costs by 55 per cent.
The agency says combining wind, solar and batteries can also reduce exposure to geopolitical shocks, such as Iran’s stranglehold on the Strait of Hormuz, a vital fossil fuel chokepoint that carries around one fifth (I think) of global oil supplies.
Europe is already seeing the impact
The report comes at a particularly relevant moment. Europe is still facing fossil fuel price shocks linked to Russia’s invasion of Ukraine and renewed instability around the US-Israel conflict in the Middle East.
Advocacy group Positive Money recently found that renewables helped cut electricity prices in some European countries by almost 25 per cent between 2023 and 2025.
Another report revealed that consumers in Denmark, Finland, France, Sweden and Slovakia could save up to €8.5 billion on energy bills this year because of their cleaner electricity mixes, while countries still more reliant on fossil fuels face significantly higher costs.
Solar alone saved Europe €3 billion in March by reducing its gas imports. An analysis by SolarPower EUrope says total savings could exceed €67 billion if gas prices remain high,
The renewables argument is changing
For years, critics argued that solar and wind power could never fully replace fossil fuels because they depend on weather conditions.
According to IRENA, battery storage is changing that calculus.
Batteries can store electricity generated during sunny or windy periods and release it later when demand rises or supply drops, reducing the need for backup plants run on fossil fuels.
IRENA says their costs will continue falling over the next decade, too, potentially making round-the-clock renewable power far more attractive for energy-hungry industries such as AI and data centres.
By 2035, some large-scale solar-and-battery projects could deliver continuous electricity for less than €45 per megawatt-hour in the best-performing regions.
“The long-standing argument that renewables lack reliability no longer holds,” Francesco La Camera, director general of IRENA, said in a statement.
Germany sees rise in battery storage system capacity in first quarter
Photo: Jan Woitas/dpa
Germany saw two-thirds more battery storage systems installed in the first quarter of 2026 compared to the previous year, industry figures showed on Sunday.
The German Solar Industry Association (BSW-Solar) said around 2 million kilowatt-hours, or two gigawatt-hours, of new storage capacity came online between January and March.
This brought the total battery storage capacity to around 28 gigawatt-hours, spread across 2.5 million installations.
More than half of the new capacity added in the first quarter – over one gigawatt-hour – was accounted for by large-scale storage systems with capacities exceeding one megawatt-hour. This was almost four times the figure from the previous year.
In the domestic storage segment, with capacities of 5 to 20 kilowatt-hours, expansion stagnated at around 0.74 gigawatts, however.
In purely mathematical terms, the total installed capacity corresponds to the average daily electricity consumption of around 3 million households in Germany, according to BSW-Solar. This capacity could be used to offset weather-related fluctuations in the production of solar and wind power.
However, BSW-Solar’s managing director Carsten Körnig is concerned about the current legislative plans from the Economy Ministry.
"Battery storage must not be disadvantaged compared to gas-fired power stations in upcoming power plant auctions due to unsuitable tender criteria," he said.
Instead, storage should be specifically promoted. It is "a key component of a cost-effective, resilient and climate-neutral energy system," Körnig argued.
(c) 2026 dpa Deutsche Presse Agentur GmbH
Construction of new solar power plants in Germany slowing
Photo: Bernd Thissen/dpa
Fewer new solar power systems are being built in Germany, with newly installed capacity down 6% in the first quarter year-on-year, according to calculations by the German Solar Industry Association (BSW-Solar) based on data from the Federal Network Agency.
The total maximum capacity was around 3.5 gigawatts.
The decline was particularly sharp in the residential sector. Peak capacity in the home segment dropped by 21% to 0.85 gigawatts. In the commercial rooftop segment, which features larger systems, the decline was even steeper at 33% to 0.6 gigawatts.
Even the comparatively small and inexpensive "balcony power plants," small solar panels whose output is limited to 800 watts, showed signs of slowing down, with new installations declining 6% to 0.09 gigawatts.
Strong growth in ground-mounted systems cushioned the overall drop. These are usually fewer but larger installations. Capacity of newly installed systems in this segment rose 20% to 1.97 gigawatts.
BSW-Solar warned against further cuts to subsidies. The association expects for demand to pick up in the coming weeks as a result of the recent energy crisis and in anticipation of possible subsidy cuts. But this does not replace reliable investment conditions, said BSW boss Carsten Körnig.
The energy crisis is demonstrating how important it is to make Germany less dependent on expensive energy imports through to quickly expand renewable energy and storage, said Körnig. "Anyone who hits the brakes on solar energy now is harming the business climate and curbing the most popular means of keeping energy prices down for citizens."
(c) 2026 dpa Deutsche Presse Agentur GmbH
