Renewable power accounted for 85.6% of all new energy capacity installed worldwide last year, according to a report released Wednesday by the International Renewable Energy Agency (IRENA), a UN body. Renewables now make up a record 49.4% of the world’s energy capacity, up from 46.3% in 2024.

That record-breaking streak has largely come down to plummeting costs for solar panels and wind turbines, the leading forms of clean power generation. These items have grown so cheap on a global scale that a UN analysis last year concluded over 90% of new renewable energy projects are now cheaper than alternative fossil-fuel-dependent sources.

Countries may now have an incentive other than economics to go green. The conflict in the Middle East has exposed how reliant global oil and gas supply is on certain choke points, including the Strait of Hormuz. The waterway has been under Iranian blockade for the past month, locking around 20% of the world’s oil and gas supply out of global markets. For Iran, the strait represents strategic leverage, but for the rest of the world, it is a reminder of the risk inherent to relying on an energy source produced in a relatively small number of countries.

“A more decentralized energy system, with a growing share of renewables and more market players, is structurally more resilient,” Francesco La Camera, IRENA’s director-general, said in a statement. “Countries that invested in the energy transition are weathering this crisis with less economic damage, as they boost energy security, resilience, and competitiveness.”

A safer source

One of the big arguments for more renewable energy in recent years has been that while petroleum and natural gas reserves are contained to specific regions—with geography playing a large role in determining who produces and purchases energy—wind and sunlight are everywhere. Declining costs for renewables combined with their power sources’ ubiquity mean that solar and wind alone could take care of the entire planet’s energy demand 100 times over, according to a 2021 analysis by Carbon Tracker, a think tank. 

Much of that opportunity is present in poorer countries that currently import fossil fuels to generate the bulk of their energy needs. Africa, for instance, accounts for 39% of global renewable potential, according to Carbon Tracker, because of the continent’s huge solar and wind capabilities.

The current supply crunch has been primarily felt in Asia, the recipient of almost 90% of oil and gas that normally passes through the Strait of Hormuz. Facing fuel shortages, governments from Bangladesh to Vietnam have called for stricter energy conservation measures, including working from home and limiting air conditioning usage. 

These are also countries that have already seen a rapid rise in electrification since the war began. Electric car and motorcycle interest has soared in Southeast Asia in particular, and several countries have even begun reconsidering their nuclear power plans in the wake of the conflict. Europeans have similarly rushed to install more solar panels and heat pumps, and purchase electric vehicles, in the month since the conflict began.

Locking in demand

To be sure, wind and solar power remains hobbled by weather conditions, with capacity weaker when the sun goes down or the wind dies out. While battery technology is rapidly improving, countries with a large renewables share in their energy mix can still be saddled with high electricity costs. In Spain, for example, where solar, wind, and hydroelectric power feature more prominently than in other European countries, electricity costs have remained relatively low. But experts have pointed out that prices could rise come summer when hydropower capacity starts dwindling, and will likely have to be replaced by more natural gas.

The reliability of renewables is also limited by their supply chains. The critical components used to build solar panels and battery technology have their own choke points. China is one of the biggest actors in clean energy manufacturing, and if it chooses to prioritize its domestic market or leverage its position in trade negotiations, the renewables market can suffer. This month, the country scrapped export incentives involving solar panels, a move that is already expected to raise costs for solar energy infrastructure abroad.

But the crisis in the Middle East is regardless pushing governments in the same direction markets have been signaling for years, and energy experts are already writing in a boost to renewables as countries consider their alternatives. 

“I expect one of the responses to this crisis will be an acceleration of renewables. Not only because they are helping to reduce emissions, but also, they are a homegrown domestic energy source,” Fatih Birol, executive director of the International Energy Agency, said during a speech last week.