Solar power has become a more affordable starting option than fossil fuels because it now requires less money upfront to build and benefits from lower interest rates for loans. According to the authors of the newly released report, this shift means it is now fossil fuels, not renewable energy, that place a heavier financial burden on developing countries trying to build new power systems.
“Solar alone is now competitive with fossil power on a pure capital expenditure (capex) basis, and solar-plus-storage is expected to follow by around 2030.” The report further notes that “financing for solar projects (cost of capital) is cheaper than for fossil fuels” in most emerging economies.
In the past, building a solar farm was much more expensive than building a coal or gas plant, even if the solar farm saved money later by not needing to buy fuel. This has changed because the physical costs of solar equipment have dropped so significantly that they are now cheaper to buy and install than fossil fuel machinery. Additionally, because investors now see solar as a safer and more reliable bet, they charge lower interest rates on the money borrowed to start these projects, making the entire setup process more affordable from day one.
The report “The electric fast-track for emerging markets” was published globally by energy think tank Ember, in partnership with the Climate Vulnerable Forum, on 2 April 2026. Authored by a team including Daan Walter and Sam Butler-Sloss, the analysis details how developing nations can bypass fossil fuel reliance through scalable and affordable electric technologies.
