Renewable energy has become the most cost-effective way to generate electric power for hundreds of millions of people worldwide who are not on the grid, according to the International Renewable Energy Agency (IRENA).

In a new policy brief, IRENA also states that renewable energy has also become the least-cost option for extending grid supply in areas with suitable resources, such as sun and wind.

It says that the findings serve as a wake-up call to policy-makers around the world.

“A renewable revolution is underway,” says Dolf Gielen, IRENA’s Innovation Director. “Recent years have seen consistent, sometimes dramatic, falls in the cost of electricity from renewables – making it the cheapest option off-grid, and even on-grid in places with plentiful resources.”

“The message is clear: renewable energy today is often the cheapest option to meet rising demand for electricity – even without subsidies. It is also healthier, and better for the environment. A renewable energy future is now bankable, and there are further cost reductions to come.”

According to IRENA, biomass power generation has become competitive wherever low-cost agricultural or forestry waste is available, with the most competitive projects producing electricity for as little as $0.06/kWh. Concentrating solar power, in which mirrors focus light over a large area into a central generator, has seen costs drop to as little as $0.14/kWh. It also says that solar photovoltaics (PV) technology is set to achieve grid parity with residential electricity tariffs in many parts of the world.

PV costs typically range from $0.16 to 0.36/kWh. In addition, the most competitive onshore wind power sites can deliver electricity costs at as little as $0.04/kWh, says IRENA.