In 2025, the world witnessed one of the most significant shifts in its energy landscape since the dawn of industrial electricity , a surge in renewable energy capacity and investment that could mark the turning point in the global fight against climate change. But behind the headline numbers lie deeper stories of uneven progress, ambitious targets, and mounting challenges.

Global renewable energy capacity rose by 585 gigawatts (GW) in 2024 , a record increase representing an annual growth rate of 15.1%.  This massive expansion pushed total installed renewable capacity worldwide to approximately 4,448 GW.

Even more striking: the 585 GW addition accounted for 92.5% of all net new power capacity added globally last year.  In other words, for nearly every new watt of electricity added anywhere in the world, more than 90% came from solar, wind, hydro or other renewables.

At the core of the boom is solar : solar photovoltaics (PV) alone accounted for over three‑quarters of the new capacity.  Wind energy followed, with a substantial share of the rest.

Meanwhile, global investment in renewable energy hit a record high of US$ 807 billion in 2024.  This comprised investments in solar PV, wind (on- and offshore), bioenergy, grids, battery storage, and other clean‑energy infrastructure.

The implications of these numbers go beyond another “green milestone.” They signal a structural shift in the energy economy , one that could shape business decisions, government policy, and sustainability frameworks for decades.

First: renewables are no longer “alternative” energy: they’re the engine of new generation capacity worldwide. When over 90% of new capacity is clean energy, every new industrial park, data center, or urban development built today will likely rely heavily on renewables. This transforms the investment logic for businesses: energy-intensive operations might now plan around clean‑power availability rather than fossil‑based risk.

Second: the cost‑competitiveness of renewables is steadily improving. As more capacity comes online, solar and wind generation costs have dropped, making clean energy not only environmentally attractive but also economically viable. For many countries, especially emerging economies this means they can leapfrog dirty energy with affordable renewables, rather than retrofit legacy systems.

Third: the rapid build‑out and investment , especially in regions like Asia could catalyze entire green industries: manufacturing, grid infrastructure, energy storage, green hydrogen, EV‑charging networks. If managed well, this could drive jobs, innovation and sustainable growth.

Most of the capacity increase in 2024 was concentrated in certain regions. Asia, particularly countries like China contributed a dominant share.  Many regions, especially developing economies in parts of Africa, Latin America, and small island states, continue to lag.

That geographic disparity threatens to entrench what some analysts call an “energy‑equity divide”, where countries with capital, technology and infrastructure rapidly shift to renewables, while poorer regions are left with aging fossil‑fuel grids and rising energy insecurity.

Moreover, despite the record numbers ,the world is still not on track to meet the aggressive targets required for meaningful climate impact. The goal of tripling global renewable capacity by 2030 now appears increasingly distant. Based on current progress, we would need to sustain an annual growth rate significantly higher than 15.1%  closer to 16.6% year‑on‑year until 2030 , to meet that target. (IRENA) Falling short would jeopardize efforts under the Paris Agreement and climate‑stabilization pathways.

There’s also the “hidden waste problem”  even as renewables expand, waste and material‑use remain staggering. One 2025 global circularity report found that only 6.9% of the 106 billion tonnes of materials consumed annually worldwide come from recycled sources. (circle-economy.com) That suggests even as energy becomes green, consumption patterns remain fundamentally linear: produce, consume, discard.

This signals a disconnect. We may be generating electricity more sustainably but consumption of materials, goods, and resources continues on the old track. Unless bundled with circular‑economy practices, the energy transition risks being only half of a sustainable future.

Another structural challenge: investment and capacity expansion have outpaced the ability of many countries’ infrastructure , grids, transmission, storage, and distribution , to absorb and make efficient use of intermittent renewables. As one recent global energy analysis warns, while renewables will become the largest source of electricity globally by 2030, variability in wind/solar output and delays in grid expansion could dampen their impact. (IEA)

Global renewable energy

For businesses, this means planning energy supply remains uncertain in many regions. For policymakers, it demands urgent investment in storage, smart grids, and regulatory frameworks to manage demand, supply fluctuations, and ensure equitable access.

Despite these headwinds, the momentum has triggered real changes on the ground. In 2025’s early months, investment flows show no sign of slowing. In fact, the first half of 2025 recorded a surge: during that period, clean‑energy investment hit an estimated US$ 386 billion , a 10% increase over the same period in the previous year. (The Renewable Energy Institute)

That suggests a growing confidence among investors , not just in solar/wind projects, but in broader energy‑transition infrastructure: grids, storage, supply‑chain, and associated technologies.

For developing economies, this could be transformative. Access to capital + demand for clean energy + lower technology costs = potential boom in green infrastructure and jobs. The ripple effects could touch manufacturing, construction, logistics, transport, and urban planning.

Take for example a hypothetical growth scenario: if an emerging economy commits to scaling renewables while simultaneously investing in circular‑economy measures (waste recycling, material reuse, product‑as‑service models), it could achieve a dual dividend , low‑carbon energy plus reduced resource extraction. That’s not just sustainability , that’s resilience.

But success will depend on vision and execution. Governments must provide stable policies, incentives, and regulatory clarity. Private enterprises need to embed circularity and sustainability in their business models. Civil society must push for transparency, accountability, and equitable distribution of green‑transition benefits.